April 2019 Issue

Volume 9 : Issue 4

TM

www.HRProfessionalsMagazine.com

Preview of

2019 ALSHRM

Top 10

OFCCP

Conference & Expo

In Birmingham May 14-15

Predictions for 2019

Attorney-Client Privilege for Organizations

Mental Health Research &

Outcomes

Kentucky Supreme Court Decision on Arbitration as a Condition of Employment

Teri Roper,

SHRM-CP, PHR Chair of 2019

ARSHRM

Conference & Expo

International Presence.

Local Knowledge.

EMPLOYERS AND LAWYERS, WORKING TOGETHER Ogletree Deakins is one of the largest labor and employment law firms representing management in all types of employment-related legal matters. The firm has more than 850 lawyers located in 53 offices across the United States and in Europe, Canada, and Mexico.

www.ogletree.com BIRMINGHAM OFFICE

JACKSON OFFICE

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420 20th Street North Suite 1900 Birmingham, AL 35203 205.328.1900

207 West Jackson Street Suite 200 Ridgeland, MS 39157 601.360.8444

International Place, Tower II 6410 Poplar Avenue Suite 300 Memphis, TN 38119 901.767.6160

Online HR Certification Classes

Bringing Human Resources & Management Expertise to You

57

million

workers are in the gig economy. www.HRProfessionalsMagazine.com Editor

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

The Thompson HR Firm, LLC Art Direction

Park Avenue Design

Contributing Writers

Austin Baker Jill Berger Maddie Bradin Bruce E. Buchanan William Carmichael Harvey Deutschendorf Billy S. Fawcett Brad Federman Rosalee Fiorello Murray L. Harber Jonathon O. Harris Marty Heller Shelby Howlett Jay Inman Michelle Kaemmerling Kelly S. Majdan Lisa A. Marino Tim Orellano Heidi Pruett Cammie Scott Tom Scott Courtney Taylor Christian Valiulis 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. ©2019 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

Top Educational Programs for HR Professionals

Industry News

4 note from the editor 5 Profile: Teri Roper, SHRM-CP, PHR, Chair of 2019 Conference & Expo 16 Strong Culture and Values: Required, not Optional 22 The Age of Employment Turnover 24 Getting to Know the Legislation that Affects Your Background Screening 26 Expanding the Pipeline for Talent Development and Recruitment 30 Is the Gig Economy Affecting Your Bottom Line?

36 A Strategy for Strategy 42 Book Look: Reinventing Jobs – A 4-Step Approach for Allying Automation to Work 45 Engagement as a Driver of Culture 54 7 Reasons Leaders Should Boost Their Emotional Intelligence

13 WGU Bachelor’s or Master’s Degree Fully Aligned with SHRM’s HR Curriculum 19 Athens State University is Your Best Path to a Successful Career in Business 21 Vanderbilt Peabody College Organizational Leadership Performance (LOP) Master’s Degree Program 51 University of Memphis – the Only AACSB Accredited Academic Training in HR Management in the Memphis Metropolitan Area

Employee Benefits

10 Weight Loss vs. Fat Loss 28 PCORI: Mental Health Research and Outcomes 38 The Dreaded 401(K) Refund: Corrective Distributions 40 Marriott’s Former Health Benefits Executive Reflects On How Purchasers Can Drive Value

14 Appointed for Life, Not Eternity 18 The Attorney-Client Privilege for Organizations: Broader Than You Think 20 Unions Face More Headwinds…the NLRB Prohibits Unions from Forcing Non-Members to Pay for Lobbying Activities 25 Cross, Gunter, Witherspoon & Galchus, P.C. Seminars 30 Affirmative Action Predictions for 2019 32 Legal Protections for Transgender Employees 43 BPJ Announces the Newest Member of the Firm 46 Arbitration as a Condition of Employment in Kentucky 47 Littler’s Labor of Love Event in Memphis February 21 48 USDOL Releases Proposed Overtime Rule 2.0 52 Did Trump Properties Knowingly Hire Undocumented Workers?

4 Online SHRM Certification Exam Prep Class Begins April 24 6 Preview of ARSHRM 2019 HR Conference & Expo in Hot Springs April 3-5 8 Preview of 2019 ALSHRM Conference & Expo in Birmingham May 14-15 9 Memories from the 2018 ALSHRM Conference & Expo 12 WTSHRM 9th Annual Human Resources & Employment Law Spring Conference in Jackson May 1 49 Preview of 35th Annual KYSHRM Conference in Louisville August 28-30 50 Highlights of the SHRM-Memphis HR Excellence Awards February 26

May 2019 issue features highlights from the SHRM Employment Law & Legislative Conference in Washington, D.C., the SHRM Talent Conference in Nashville, and highlights from the ARSHRM Conference & Expo in Hot Springs, plus Employment Law and Employee Benefits Updates Deadline to reserve space April 15 www.HRProfessionalsMagazine.com

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a note from the editor

A

April is such an exciting month because we are honored to be official media sponsors of four excellent HR conferences. The first one is the 2019 ARSHRM Conference & Expo April 3-5 in Hot Springs. There are 37 professional development opportunities and 15.75 hours CE. From there we will be covering the 2019 SHRM Talent Conference April 8-10 in Nashville. You can earn 14+ PDCs. On April 26 the TN SHRM Strategic Leadership Conference will also be in Nashville. Lastly, the Tennessee Personnel Management Conference is April 24-26 in Memphis. The theme of the conference is, “Thriving and Surviving in Turbulent Times: The Secrets of Human Resources Success”. If you work for the public sector, this conference is for you.

We are looking forward to three exciting conferences in May beginning with the WTSHRM Spring Conference in Jackson on May 1. The 2019 MidSouth Total Rewards Conference is in Nashville May 9-10. Next will be the 2019 ALSHRM State Conference & Expo May 15-16 in Birmingham. So May will also be an exciting month for HR conferences!

We had the honor of being an official media sponsor for the 2019 SHRM Employment Law & Legislative Conference March 18-20 in Washington, DC. We will bring you highlights from this conference in our May issue. In addition, we will have highlights from the SHRM-Atlanta SOAHR Conference March 25-27. Please check out our Facebook Live videos from each of these conferences at www.facebook.com/ hrprofessionalsmagazine.

Our April complimentary webinar sponsored by Data Facts will be April 23 at 2 PM CDT. The topic will be “An Update on the SHRM Employment Law & Legislative Conference.” Mark your calendar for 2 PM CDT and join us! You will earn 1.00 SHRM PDC ad 1.00 HRCI recertification credit.

Happy conferencing to all!

cynthia@hrprosmagazine.com @cythomps on Twitter

Presents

Affordable Online SHRM-CP® | SHRM-SCP® Certification Exam Prep Class Online classes begin April 24, 2019 and will meet twice per week for 12 weeks on Monday and Thursday evenings from 6:00 PM to 7:30 PM.

SHRM Learning System® Participant Materials

The total cost of the SHRM-CP® | SHRM-SCP® Online Certification Exam Prep Class is $995 You may pay by PayPal, credit card or check.

Spring Exam Window May 1 – July 15, 2019 For more information visit shrmcertification.org

Deadline to register is April 17 Contact cynthia@hrprosmagazine.com OR visit our website at www.hrprofessionalsmagazine.com

About the instructor: Cynthia Y. Thompson is Principal and Founder of The Thompson HR Firm, LLC, a human resources consulting company in Memphis, TN. She is a senior human resources executive with more than twenty years of human resources experience concentrated in publicly traded companies. She is also the Publisher | Editor of HR Professionals Magazine, an HR trade publication distributed to HR professionals in Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, and Tennessee.

The mission of the publication is to inform and educate HR professionals. Cynthia has an MBA and is certified as a Senior Professional in Human Resources by SHRM and HRCI. Cynthia is a faculty member at Christian Brothers University in Memphis teaching Human Resource Management. Cynthia also teaches online HR Certification Exam Prep Courses for HRCI and SHRM. She is a sought-after speaker on HR Strategic Leadership.

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TeriROPER on the cover

Teri Roper, SHRM-CP, PHR Chair of 2019 ARSHRM Conference & Expo Teri Roper is the Chair of the 2019 ARSHRM Conference & Expo. While this is her first time to chair the conference, she has served on many previous conference committees. Teri has served on the state conference committee as Door Prize Chair, Sponsorship Chair, Programs Chair, and Finance Chair.

Teri is a current member of the Central Arkansas Human Resources Association (CAHRA) and of SHRM where she serves as a general board member and Chair of the SHRM Foundation committee. She has held past board member positions for CAHRA including Vice President of Administration and general board member. She has also served on the ELLA Conference Committee and CAHRA’s Supervisor Forum committee.

Teri has shared her expertise in the talent acquisition field with attendees at the CAHRAArkansas Democrat Gazette Semi-Annual Career Fair where she volunteered to review resumes, served on discussion panels for topics such as “Dress for Success” and “Interviewing Tips.” Teri is passionate about giving back and previously volunteered for CAHRA’s Workforce Readiness Committee and given presentations before school groups and Girl Scout troops.

Teri is Human Resources Manager with Arkansas Blue Cross and Blue Shield in Little Rock, where she has responsibility for talent acquisition, affirmative action and compliance. Previously, she worked in franchise servicing where she served as a consultant to franchisees building benefits and compensation packages for management and front-line staff. Teri has a passion for employment law and compliance and is eager to assist fellow human resources professionals and business owners.

Teri is a graduate of Arkansas State University – Beebe and John Brown University where she graduated with distinction earning a bachelor’s degree in organizational management. She earned her PHR in 2013 and her SHRM-CP in 2015. 

www.HRProfessionalsMagazine.com

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37 PROFESSIONAL DEVELOPMENT OPPORTUNITIES 15.75 HOURS CE OVER 400 ATTENDEES OVER 80 EXHIBITORS NETWORKING OPPORTUNITIES RECEPTIONS & LIVE MUSIC SHRM STUDENT COMPETITION SHRM FOUNDATION FUNDRAISER ULTIMATE NIGHT AT THE MOVIES FEARLESS FOOD FIGHT $1500 GRAND PRIZE GIVEAWAY

Alabama SHRM is excited to announce our 2 Day conference scheduled for Alabama SHRM is excited to announce our 2 Day conference scheduled for May 14th - 15th at the BJCC in Birmingham, AL. Our team has lined up May 14th - 15th at the BJCC in Birmingham, AL. Our team has lined up some excellent speakers who are bringing relevant content to our audience some excellent speakers who are bringing relevant content to our audience on Performance Management, Employee Engagement, Recruiting, on Performance Management, Employee Engagement, Recruiting, Corporate Culture, Diversity & Inclusion and more!

Corporate Culture, Diversity & Inclusion and more!

Day 1 1:00 p.m. - 5:15 Sessions Day 1 5:15 p.m. - 6:15 p.m. Marketplace Happy Hour 1:00 p.m. - 5:15 p.m. Sessions Day 2 5:15 p.m. - 6:15 p.m. Marketplace Happy Hour 8:00 a.m. - 4:30 p.m.

DayOptions 2 Multiple Pricing Available: 8:00 a.m.

- 4:30 p.m.

Early -bird Conference Registration $325 through Feb 28th Early-bird Corporate Registration (5 attendees) $1462.50 through and Feb 28th For more information to register visit Student Rate: $99 https://www.alshrm.org/2019-conference-information For more information and to register visit https://www.alshrm.org/2019Content is being submitted for 10 re-certification credits with conference-information SHRM and HRCI Content is being submitted for 10 re-certification credits with SHRM and HRCI 8

www.HRProfessionalsMagazine.com

Memories from ALSHRM 2018 Conference

www.HRProfessionalsMagazine.com

9

WEIGHT LOSS

VS.

FAT LOSS

By HEIDI PRUETT

I recently read a blog posted by InBody and I wanted to share it with you since it really drives home the importance of body composition when it comes to maintaining weight loss.

there that will help you achieve fat loss – some better than others – the good ones boil down to essentially the same thing: reducing energy in from food while increasing energy out via exercise/activity (a caloric deficit) so that your body is forced to make up for the missing energy by breaking down your body tissues, including body fat.”

(quoted from InBody blog) “About a year ago, a new study on long-term weight loss and metabolism was published in the journal Obesity. Studies are published in scientific journals all the time with little, if any, public attention. However, this one was different. This one was about former contestants on The Biggest Loser. The study involved 14 of the show’s contestants and looked at their body composition at three different times: before the show, after the show (after completing a 30-week weight loss program), and 6 years after the show.

I wanted the blog to shed some light on why I see many people struggle to lose weight. As a health coach, it is my job to help my clients live healthier, more complete lives. There are many aspects to wellness, but a healthy weight plays an important role in physical, medical and mental health. I recently had a client who was frustrated that she had not lost any weight and she was exercising, eating right and feeling better. As part of her evaluation, we checked her body composition. After reviewing the results, we found that she had lost 4% of her body fat while gaining 5 pounds of muscle. Her weight hadn’t changed, but what it was comprised of had changed drastically.

She had been ready to give up on her new habits, but after seeing that they really were working, she was more committed than ever.

Strikingly, the Biggest Loser contestants had regained an average of 90 pounds after 6 years, nearly reversing all the incredible weight loss they achieved while on the show. According to the study and the dozens of articles that reported on it, the reason for the weight gain was that the extreme weight loss had permanently throttled their metabolisms, meaning that in the 6 years following the show, when they were eating an amount of food they believed to be appropriate for their new body weights, they started gaining fat again. Stories like this can make some people get discouraged and think negatively: “See! Weight loss is impossible!” “If they can’t keep the weight off, even after they worked with professionals, how can I hope to keep it off?” “I’m just doomed to be fat and there’s nothing I can do about it!”

This is understandable: Seeing people regain their weight after achieving their goals in a very public setting can be extremely disheartening for people struggling to meet their own weight loss goals. However, the unhappy result of the Biggest Loser contestants regaining their weight has one positive outcome: it underscores everything that is wrong with the way we think about improving health when we measure our results in terms of “weight loss” and not in terms of “fat loss.”

Don’t be discouraged by the doom and gloom you’re hearing about destroyed metabolisms and inevitable weight regain. Maintaining your weight loss is not impossible. There is a reason why the Biggest Loser contestants failed to keep their weight off, and you can learn from their experience to ensure that it doesn’t happen to you.

What Happens When You Lose Weight The first thing to understand is that when you lose weight, you’re generally not just losing body fat: you’re making changes to each component of your body composition. This includes, along with body fat, Lean Body Mass and Body Water. When you lose weight, you don’t necessarily get to control how much of each you lose (but you can have an influence on what’s lost.) How does weight loss actually happen?

While there are virtually hundreds of diets and exercise programs out 10

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Have you ever been frustrated that you are exercising, eating right and not losing weight? Have you noticed that your clothes fit better, but that the number on the scale stays the same? You may have made more progress than you think. In today’s world with all the scientific advancements, why are we still focusing on BMI as an indicator of obesity? BMI was developed in the 1830s by a mathematician to give a quick and easy way to measure the degree of obesity of the general population and to assist the government in allocating resources.

It was never meant to be used to determine obesity for individuals.

BMI (body mass index) is a ratio of your height as compared to your weight. It does not account for how much of your weight is muscle, bone, fat or water. In order to get a better picture of your health, we recommend using body composition to get a more complete analysis of your weight. Body composition scales can break down your weight into specific data that will help you understand your health and what you need to do to improve it. Body composition focuses on: Fat Percentage (healthy percentages are broken down by age and gender) Muscle Mass (how much of your total weight is muscle) Total Body Water (lets you know if you are hydrated or dehydrated) Visceral Fat (the hidden fat around your organs that can lead to heart disease and diabetes) Basal Metabolic Rate – BMR (the number of calories your body burns to sustain life) ** BMR gives you a reference point to decide how many calories you can consume to lose or maintain your current weight.

Heidi Pruett, RN, BSN, CCM, Director of Wellbeing, HealthMed, Inc. heidi@healthmedinc.com www.healthmedinc.com

RETURN ON INVESTMENT.

RETURN ON INDIVIDUAL. At HealthMed, we provide solutions that encourage, educate and empower individuals to take responsibility for their own health and lifestyle choices while also providing a return on your investment.

HealthMed’s core strengths are its experience, the dedication of a friendly, professional team passionate to succeed and the ability to adapt to the unique culture of its customers. Our mission is to create value for those we serve:

Receive the encouragement you need to actively manage your health by understanding your risk for disease and the importance of lifestyle choices on improving and maintaining your overall health.

Realize the value of a healthy workforce by knowing what areas of risk exist and support your employees with the tools to improve their health.

Keep your employees healthy and productive! Informed employees will make smarter lifestyle choices.

Respond to the needs of the community by sharing the aspiration to live a healthy life in a healthy community.

HealthMed provides the health and wellness services to help change communities to improve quality of life and community health.

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Join us for an informative day where we will explore totally rad HR compliance topics including:

Not Happen’en! Marijuana and the Workplace – How do recent changes in the law affect employer policies and alter employer legal obligations toward their employees?

Like a Totally Better Employer Handbook – In 2019 what policies and language should employers include in their handbooks and what should they avoid?

Gnarly Employment Case Studies – An interactive discussion of recent employment law cases and the application of relevant concepts and HR strategies.

HR at the Drive-In – Back by popular demand! A survey of HR issues depicted in film and television incorporating strategies that are applicable to real-world workplace challenges.

Lunch is provided. Explore our impressive showcase of HR-related exhibitors. Great door prizes.

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, April 25, 2019. Register early as seating is limited.

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Appointed For Life,

Not For Eternity

BY BILLY S. FAWCETT

T

HE U.S. SUPREME COURT issued

En Banc Decision

an interesting unanimous opinion on

Typically, an appeal is held before a panel of three judges. However, after the panel issues an opinion, a party can request a rehearing en banc. Circuits generally only hear cases en banc when the case deals with an important issue like interpreting new law, overturning its own precedent, or if the appellate opinion might conflict with statutory law. In many circuits, an en banc hearing is a hearing before all of the appellate judges in the circuit.

However, the Ninth Circuit Court of Appeals is by far the busiest Appellate Circuit in the nation, having over 10,000 pending appeals (with the next closest Circuit having only 6,000 pending appeals). So, a hearing in front of all of the appellate judges in the Ninth Circuit would be nearly impossible logistically, and oral arguments would be utter pandemonium. To avoid this, the Ninth Circuit, along with other larger circuits, does not have to use all of its judges when sitting en banc. Instead, the Ninth Circuit hears cases en banc with eleven judges.

February 25, 2019, in which it vacated a landmark 9th Circuit decision, Yovino v. Rizo, where the Ninth Circuit

ruled that salary history is not an affirmative defense to an Equal Pay Act violation. The Court essentially avoided ruling on the underlying issues and instead found that a deceased judge cannot issue opinions, even if he wrote the opinion before he died.

In Yovino v. Rizo, formerly a landmark case, the Ninth Circuit decided that employers cannot use salary history as a legitimate non-discriminatory reason for paying female employees less than similarly situated male employees. The case began when the Fresno County Office of Education hired Aileen Rizo as a math consultant. Despite her extensive experience, the only consideration made by the Fresno County Office of Education in determining her salary was her salary at her most recent employer, which it used to place candidates into “steps.” This methodology was its standard practice and, ironically, was designed and adopted to avoid gender discrimination and equal pay lawsuits.

Rizo learned later that similarly situated male colleagues had been hired at higher steps than her. Rizo then filed a lawsuit in the Eastern District of California.

The district court denied the Fresno County Office of Education’s motion for summary judgment, following recent Tenth and Eleventh Circuit decisions, while cleverly avoid a precedential 9th Circuit case from the early 1980s. In doing so, the district court noted that using only previous salary as a method for determining salary would perpetuate the wage gap. The Fresno County Office of Education appealed.

A three-judge panel for the Ninth Circuit vacated the lower court’s decision. Using the Ninth Circuit precedent that the district court was able to avoid, it ruled that the Fresno County Office of Education’s reliance solely on prior salary could be a legitimate non-discriminatory business decision, and, importantly, that solely relying on previous salary is not de-facto gender discrimination. Rizo then asked for an en banc rehearing.

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In the Yovino case, the en banc panel overturned the three-judge panel’s decision and instead ruled in favor of the plaintiff. Judge Stephen Reinhard wrote the majority opinion for the en banc panel. Sadly, Judge Reinhardt died eleven days before the opinion was formally entered. Before his death, he participated fully in the case and finished writing the decision. The Ninth Circuit thought that because of this, it could publish the decision as written, even after Judge Reinhard passed away. The school district appealed that decision to the U.S. Supreme Court.

The U.S. Supreme Court’s Decision The U.S. Supreme Court ruled not on the issue of salary history as a form of wage discrimination, but rather on whether a judge can posthumously issue an opinion. In other words, instead of deciding this case on the merits, the Supreme Court found an interesting, albeit important, reason to remand the case back to the lower courts. Many legal scholars are frustrated with the Court’s decision to remand the case without ruling on the merits, as there is a split among the circuits regarding the issue of whether employers might face liability for setting salary based on an applicant’s salary history.

The U.S. Supreme Court ruled that Judge Reinhardt could not sign onto an opinion after his death. It held that “federal Judges are appointed for life, not eternity.” It relied on well-established precedent that a judge must have the “power to participate” in the decision at the time it was rendered. So, even though he wrote the majority opinion, Judge Reinhardt was obviously not able to participate at the time the decision was issued.

While the precedent that no judge should be able to rule from the grave makes sense, the decision seems somewhat unfair because the judge

completed the opinion while still alive. The Court addressed this when it pointed out that there is a general principle that a judge can change his mind up until the decision is entered. The Court also mentioned, as somewhat of an aside, that the five other votes supporting Judge Reinhardt’s opinion were concurrences, which means while they agreed with the decision, they agreed for different reasons.

Because Judge Reinhardt’s vote does not count, it leaves a 5-5 tie with no majority opinion, but rather four different opinions reaching the same conclusion. This means that the en banc decision is not binding on the Ninth Circuit. Therefore, all of the notoriety about this landmark ruling is for naught, as employers are once again free to consider previous salaries when determining what to pay their employees.

Going Forward Employers in the Ninth Circuit have surely faced a rollercoaster of emotions over the past several months regarding this decision.

An en banc court reversed a nearly forty-year old precedent when it decided that it was inappropriate to consider salary history when setting an employee’s salary. Then the U.S. Supreme Court nullified that decision because of the death of the judge who authored the majority opinion.

Now employers sit in an awkward position. The en banc decision showed that the Ninth Circuit would likely prevent employers from using previous salary history as a defense to paying women less than men, and the Supreme Court did not really stop the

Ninth Circuit from ruling in that manner. Rather, the Supreme Court decision likely will only delay the Ninth Circuit in finding that salary history cannot be used to justify paying women less than men.

Of course, there are no guarantees that the Ninth Circuit will ultimately rule in this way. While President Trump may not be able to accomplish his mission of turning the most liberal circuit in the country conservative, within the coming months, roughly one third of the active judges in the Ninth Circuit will be conservative. Under a liberal president, or if President Trump had not been able to nominate so many judges, it would be a foregone conclusion that the Ninth Circuit would grant a rehearing to a case similar to Yovino and issue a very similar ruling to the Yovino decision.

However, considering that the Ninth Circuit has very recently had an infusion of new conservative blood, the odds of the Ninth Circuit ruling en banc again that previous salary cannot be the sole consideration for determining salary have decreased. The decision was already close in that it was 6-5, and of the six in the majority, there were four separate concurrences, and no judge joined the majority opinion in its entirety. Indeed, the Ninth Circuit might not prohibit employers from using past salaries as a defense against wage discrimination until the Supreme Court tackles this issue, which it will likely do within a few years, as the split between circuits has recently become more pronounced.

Billy S. Fawcett, Attorney Martenson Hasbrouck & Simon LLP bfawcett@martensonlaw.com www.martensonlaw.com

Martenson, Hasbrouck & Simon LLP focuses its practice

ADVICE THAT WORKS.

on labor and employment defense and business litigation.

Our reputation for excellence has been earned through our dedication to providing innovative solutions to the most difficult problems at an exceptional value. We have forged long-lasting relationships with our clients through our tenacity, skill, and accessibility.

Based in Atlanta, in the heart of Buckhead, with two additional offices in California, we have developed a highly flexible representation model that enables us to serve clients of all sizes, across all regions of the country.

Contact Marty Martenson at (404) 909-8100

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15

STRONG CULTURE AND VALUES:

Required, Not Optional

By BRAD FEDERMAN and COURTNEY TAYLOR

Culture and values have been around for years. Leaders and scholars have debated their importance and spent millions of dollars carefully crafting definitions and statements. Cultures and values have been seen as a fad with investments in posters and placards. But the truth is, they have never been more important in today’s world.

control approach will not work with this new generation of employees.

They do not like bureaucracy and need to be included along the way.

Like most generations, taking orders is not their thing. However, this generation will pack up their things and leave if they are not treated as a valued colleague.

COMMAND AND CONTROL IS DEAD

On top of that, while a multigenerational workforce has excellent potential, there are differences in values, communication styles and work habits vary among generations. Various perspectives are incredibly valuable to any company when it works. One of the best ways to leverage those differences is to appreciate the diversity and find the commonalities. An environment of shared values and distinct culture fosters collaboration and a partnership within the organization.

Did you know, our workplaces used to be modeled after the military?

During a time when we did not have voluntary armed forces. Countless people in the military did not want to be there, and the assignments were not glamorous. In that context, a command and control approach was needed. However, we are now at a time when our workplaces and our workforce is uniquely different.

CHANGE

DIVERSITY/GLOBALISM

Clock speed is the speed at which a microprocessor performs commands. We have spent years increasing the clock speed of our devices. However, we now use the same types of approaches to our productivity efforts as a whole. We have to launch products faster than ever. We must shorten research cycles and testing for new drugs.

Respond more quickly, or even in real time, to our customers. What took years is now taking months. What took months now takes days.

What took days now takes hours. And what took hours now takes seconds. Because we have shortened cycles in our business, we also take on more at any given time. The rate of change we encounter and the sheer amount has just exploded.

We are now working in companies that look more like international cities. I have sat around conference tables that look like the United Nations. A diverse workforce has the power to strengthen a company and connect it to its customers. When handled poorly, a diverse workforce can also create conflict, harassment claims and more. When you grow up in rural Indiana and work with people from Bombay, Chizhou, Lora del Río and Melbourne, the opportunity for miscommunication and conflict is massive. Each person’s life experience brings different traditions and norms. When a company adopts shared values and culture, it helps everyone find common ground quickly. It serves as the glue that holds everything and everyone together. Diversity and inclusion should not be limited to how employees are treated and perceived based on compliance issues, but rather permeate the internal and external culture within the company allowing it to become diverse, inclusive and global.

As companies continue to grow, the structure of the past must disappear.

Hierarchies be damned. Command and control dropped. Otherwise, we slow our businesses down, create bottlenecks and lose out to competition. Employees must embrace change through an entrepreneurial spirit. Entrepreneurship is a mindset, not a position. Employees with an entrepreneurial spirit want to learn, experiment, and partner and those adaptable people embrace change as an opportunity for growth.

Innovative and creative thinking generate leads and create opportunities. More and more companies can thrive in today’s market because their culture encourages enthusiasm, vision, and problem-solving skills that are essential to entrepreneurial success.

GENERATIONAL DIFFERENCES A new generation has been entering the workforce. A digitally savvy generation that has a desire to make a difference. They grew up with platforms that allowed them to express themselves, make choices and even create customized products. Millennials and Generation Z know they have many work options and have vast networks they can recruit in seconds to influence people, companies and more. A command and 16

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SPAN OF CONTROL A span of control refers to the number of people someone manages.

As we try to flatten our organizations to make them less formal and more nimble, the span of control in organizations has grown. A larger span of control also creates cost savings. The only problem is managers can no longer manage effectively. It often feels overwhelming especially for those that cannot let go. Managers suffer themselves and destroy morale and productivity when they need to control things, provide structure, and micro-manage. They also serve as a bottleneck. Managers must become coaches and leaders. These leaders must strategize to make sure employees can work independently with less supervision. Creating shared values and culture provides that compass for employees.

Employees can use the values and culture to guide their behavior and decisions. Guidance along with an aligned strategy or company direction is the platform for flatter more dispersed organizations.

NETWORKS One of the main reasons we can flatten our organizations has to do with technology. Most technology available today is collaborative and mimics networks rather than hierarchies. Many organizations struggle with this change. Companies put in arbitrary rules for access, limited usage, and try to control who gets to collaborate. Organizations that adopt the new way of work take down barriers. They even allow collaboration with people outside of their organization. After all, good ideas come from everywhere. These changes make personal connections even more important and influential. These technological and relationship networks give advantages to companies in terms of recruiting, innovations, efficiencies and more, but it has also wreaked havoc on the command and control structure. The only way to lead in the era of networks instead of ladders is to rely on shared values and norms.

CHANGING NORMS

product or service. For the community at large, these organizational tools share your organizations' value beyond providing jobs. A strong culture and a set of shared values become part of your brand.

Shared values and a strong culture are no longer a fad. No longer optional. The most essential component for a successful company is to have a culture based on a shared set of beliefs that support the business strategy and structure. When companies have a strong culture and values, employees can navigate effectively in a diverse, global, multigenerational workforce, become an agent for change, and tap into their leadership opportunities by living the organization’s values and culture authentically. For organizations, a strong culture and shared values are the tools that not only build success but adapt to today’s very unique workplace. All of the trends and forces at work have buried the command and control structure. Don’t let your managers try and bring it back from the grave; otherwise, they will bury your organizations along with it.

#METOO. Anti-bullying. Casual dress or even no dress code at all.

Flex time. No assigned office space. Work from home when you want policies. Norms. Rules. What norms? Corporate standards are changing and in some cases, dying. I know sales people that either strategically set appointments up by dress code or travel with multiple outfits so they can fit in when they arrive at a client’s place of business. A clearly defined culture and a set of shared values transcend the challenges of changing norms and encompasses the most important norms a company can have. If correctly built and maintained, a strong culture and shared values are lived and not just espoused. For employees, they understand why they were hired, why certain people are promoted and more. For customers, they know what they are buying beyond just a

STRENGTHENING BRANDS

Brad Federman, Chief Operating Officer F&H Solutions Group bfederman@fhsolutionsgroup.com www.fhsolutionsgroup.com

Courtney Taylor, Talent Management Consultant F&H Solutions Group ctaylor@f&hsolutionsgroup.com www.f&hsolutionsgroup.com

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17

The Attorney-Client Privilege For Organizations:

Broader Than You Think?

BY ROSALIA FIORELLO

It is increasingly common for businesses to use outside consultants, independent contractors and other third-party nonemployees to develop and manage their business. These third parties often operate in the same manner as employees of the business and possess information the business’ attorneys would not otherwise have if it were not for the nonemployee. The issue is whether the attorney-client privilege protects these communications between a corporation’s legal counsel and a third-party nonemployee of the corporation.

The Tennessee Supreme Court recently addressed this issue in Dialysis Clinic, Inc. v. Medley, No. M2017-01352-SC-R11-CV, 2019 Tenn.

LEXIS 17 (Jan. 25, 2019) and held the attorney-client privilege applies to communications between an entity’s legal counsel and a third-party nonemployee of the entity if (1) the nonparty is the functional equivalent of the entity’s employee; (2) when the communications relate to the subject matter of legal counsel’s representation of the entity; and, (3) the communications were made with the intention that they would be kept confidential.

Generally, the idea of privilege is this: communications between a client and the attorney are confidential. Privilege protects the attorney and client from being compelled to disclose confidential communications between them made for the purpose of furnishing or obtaining legal advice or assistance. It is best to check your local laws in order to determine the precise definition of “privilege” for your state.

In Tennessee, privilege is protected by the language of the following statute: No attorney, solicitor or counselor shall be permitted, in giving testimony against a client or person who consulted the attorney, solicitor or counselor professionally, to disclose any communication made to the attorney, solicitor or counselor as such by such person during the pendency of the suit, before or afterward, to the person's injury.

T.C.A. § 23-3-105 (2018).

Whether privilege applies to a communication differs slightly in each state. In Tennessee, it is “question, topic and case specific.” Bryan v. State, 848 S.W.2d 72, 80 (Tenn. Crim. App. 1992) (citing Johnson v. Patterson, 81 Tenn. 626, 649 (1884)). It is important to note the attorney client does not protect communications between attorneys and clients that take place in the presence of a third party or are divulged to a third party. Hazlett v. Bryant, 241 S.W.2d 121, 123 (Tenn. 1951.) In other words, the attorney-client privilege can be broken by a third party.

The facts of Dialysis Clinics, Inc. v. Kevin Medley et al. are relatively straight forward. Dialysis Clinic Inc. owned and operated dialysis centers.

They owned and leased various commercial properties to third parties 18

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but had no in-house knowledge about or experience in the management of commercial rental properties. Therefore, Dialysis Clinic Inc. entered into a property management contract with XMi to manage several of their commercial properties. Under their property management agreement, XMi acted as Dialysis Clinic’s agent on an exclusive basis to manage and operate the properties. The scope of XMi’s work included negotiating lease renewals and amendments; collecting rents and dues; canceling or terminating leases upon Dialysis Clinic’s direction; and instituting, prosecuting, and defending all actions involving the leases and their properties. XMi handled all day to day operations and tenant relations and regularly communicated with Dialysis Clinic about those matters. XMi also communicated with Dialysis Clinic’s in house and outside attorney about the properties because in XMi’s role as a property manager, it had information about the properties that Dialysis Clinic did not have.

In October 2014, Dialysis Clinic filed unlawful detainer suits for three of its properties in Davidson County. The Defendant, Kevin Medley LLC, served a subpoena on XMi and requested documents related to the properties in question be turned over. These documents consisted of emails between XMi and Dialysis Clinic’s in-house and outside counsel. Dialysis Clinic argued the emails were protected by the attorney client privilege. The case made its way to the Tennessee Supreme Court, who turned to other jurisdictions for guidance on the issue.

In the 8th Circuit, the Bieter court observed that although the information an attorney needs to represent a client will in most cases be available from the client’s employees, there will also be nonemployees whose relationship to the client suggests that they will possess the very sort of information that privilege envisions. In re Bieter Co 16 F.3d 292, 937-938 (8th Cir. 1994). In Bieter, an independent contractor worked as a consultant to a partnership on a commercial development. The independent contractor worked to procure tenants and acted as the representative to the partnership with architects, other consultants and the partnership’s attorneys. His interactions were extensive and included meetings and correspondence with the attorneys. The Bieter court held that the attorney client privilege applied because the independent contractor had been involved daily with the partnership’s principals, and the court found that the independent contractor likely possessed information that no one else possessed.

The Tennessee Supreme Court also reviewed the 9th Circuit Court of Appeals decision in United States v. Graft, 610 F.3d 1148 (9th Cir. 2010).

Graft was a criminal case involving an insurance company accused of fraud. The owner of the company was prohibited under a cease and desist order from being employed by an insurance company, and therefore he denied that he was a director, officer, or employee of the company but claimed instead he was an outside consultant. The Graft court found the

owner was the functional equivalent of a company employee because he was the company’s agent with authority to communicate with its attorneys about legal matters. Under a separate test, the Graft court found the company’s owner in his individual capacity, as opposed to his role as a functional employee, was not represented by the company’s attorneys, and thus he had no personal attorney-client privilege over his communication with the company’s attorneys.

In Pennsylvania, a pharmaceutical consulting firm was held to be the functional equivalent of an employee of a pharmaceutical company based on the firm’s role in the development and implementation of a brand maturation plan, including administrative tasks and business strategy as well as involving the in legal and regulatory issues.

In re Flonase Antitrust Litigation, 879 F. Supp. 2d 455 (E.D. Pa 2012).

In Maryland, a federal district court held a landscaping company, hired to address citations issued to a landowner by the county, was the functional equivalent of an employee of the landowner. Huggins v.

Price Georgy’s Cnty., No. AW-07-825, 2008 WL 11336503, at *4 (D. Md. Sept. 25, 2008).

has; whether the nonemployee is authorized by the entity to communicate with its attorneys on matters within the nonemployee’s scope of work to facilitate the attorney’s representation of the entity; and whether the nonemployee’s communications with the entity’s attorneys are treated as confidential. If the Court determines the nonemployee’s communications qualify for the attorney-client privilege because the nonemployee is the functional equivalent of an employee outlined above, the Court will then use the standard already in place in Tennessee to determine whether the privilege attaches to the communication.

Applying its new analysis in Dialysis Clinic, the Tennessee Supreme Court held the attorney-client privilege applied to communications between Dialysis Clinic’s legal counsel and XMi. The Court found XMi acted as a functional equivalent. Further, Court found communications between XMi and legal counsel for Dialysis Clinic related to the subject matter of counsel’s representation of Dialysis Clinic’s and were made with the intention that the communications would be kept confidential.

The Tennessee Supreme Court formulated its own analysis in determining, under the totality of the circumstances, whether a third-party nonemployee is the functional equivalent of an entity’s employee whose communications with the entity’s attorneys are protected by the thirdparty privilege. The analysis consisted of two prongs.

What does this mean for your company? More communications between in-house or outside counsel, third party contractors, brokers, consultants, public relation or marketing firms, or any other third-party nonemployee may be protected. Check to see whether your state uses a form of the “functional equivalent” analysis along with a review of what defines privilege in your state.

First, the Court considers the following non-exclusive factors: whether the nonemployee performs a specific role on behalf of the entity; whether the nonemployee acts as a representative of the entity in interactions with other people or other entities; whether, as a result of performing its role, the nonemployee possesses information no one else

Wimberly Lawson Wright Daves & Jones, PLLC

Nashville, Tennessee office rfiorello@wimberlylawson.com

Rosalia Fiorello, Associate

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19

Unions Face More Headwinds…

The NLRB Prohibits Unions from Forcing Non-Members to Pay for Lobby Activities

In

a long-awaited decision, United Nurses & Allied Professionals (Kent Hospital), issued on March 1, 2019, the National Labor Relations Board (NLRB) ruled that a private-sector union may not require nonmember objectors (also known as Beck objectors) to pay for its political lobbying expenses because lobbying falls outside the union’s “representational function.” The Board also held that a union must provide

verification to Beck objectors that union dues expenditures are independently audited to assure them the financial information—including how much is spent on lobbying activities—is reliable. With an ever-increasing number of employees re-examining whether to be union members, the Board’s decision empowers individual employees to exercise their right to have their dues money spent only for legitimate representational purposes.

The Board’s decision in United Nurses stems from Communications Workers of America v. Beck, 487 U.S. 735 (1988), where the Supreme Court said workers subject to a union security clause or dues checkoff provision may forego union membership but that the union may still legally charge nonmember objectors for the costs of collective bargaining, contract administration, and grievance adjustment—in other words only activities “reasonably employed to implement or effectuate the duties of the union.” In the context of lobbying costs, NLRB judges have applied the Beck standard on a case-by-case basis.

Now, 30 years after Beck, the Board in United Nurses confronted whether unions’ use of nonmember dues and fees to pay for its political work is improper and violates its duty of fair representation.

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By JONATHAN O. HARRIS

Background While working at a hospital in Rhode Island, Jeanette Geary invoked her Beck rights, resigning her membership in the union and objecting to the assessment of dues and fees for activities unrelated to collective bargaining, contract administration, or grievance adjustment. The union provided Geary with a reduced dues calculation and charts setting forth the major categories of expenses for the union, both internationally and locally. The union also asserted that an auditor independently verified the expenses. According to the chart, a portion of the expenses went to lobbying efforts, specifically for various bills before the Rhode Island and Vermont state legislatures. Geary filed an unfair labor practice charge with the Board seeking an auditor’s verification that the union was not using her fees against her wishes for political purposes.

Is Political Lobbying Part of a Union’s Representational Function?

According to the Board, although lobbying activities “may in general relate to terms of employment or may incidentally affect collective bargaining,” lobbying is not part of the union’s collective bargaining duties.

As a result, unions may not force nonmember Beck objectors to fund political lobbying efforts. The Board observed: We believe that relevant Supreme Court and lower court precedent compels holding lobbying costs are not chargeable as incurred during the union’s performance of statutory duties as the objectors’ exclusive

bargaining agent . . . Lobbying activity is not a representational function simply because the proposed legislation involves a matter that may also be the subject of collective bargaining.

In other words, a union violates its duty of fair representation under the National Labor Relations Act (NLRA) if it charges nonmember objectors fees that include lobbying expenses because such fees are not necessary to perform its representative functions.

Independent Verification That Union Expenses Have Been Audited Additionally, the United Nurses Board held that a union is required to provide Beck objectors with independent verification of an audit of its chargeable and nonchargeable expenses (i.e., categories objectors’ fees can and cannot go toward). It is no longer sufficient for a union to provide assurances to nonmember objectors that an auditor has reviewed the union expenses; instead, “private-sector unions subject to the ‘basic considerations of fairness’ inherent in the statutory duty of fair representation are required to provide Beck objectors verification that the financial information disclosed to them has been independently verified by an auditor.”

Finally, the Board applied both the lobbying expense and the audit verification holding retroactively, requiring as part of the remedy that the union reimburse all similarly situated employees the amount of dues collected for lobbying activities, with interest, and to provide appropriate verification of its expenses.

Key Takeaway for Employers The Board’s decision puts the issue of nonmember Beck objectors’ rights to have a say in how their dues money is spent front and center and follows a trend of recent cases expanding similar individual employee rights in the public sector.

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Nonmember employees now have greater access to, and verification of, union financial information and how their dues money is spent. Unions not only have to disclose detailed financial information when workers subject to a union security clause or dues checkoff provision exercise their Beck rights, but they must also provide individual employees with verification that the union’s financial information has been independently audited.

Unions are not shy about using employee dues to attempt to influence political actors and public policy. As a result of United Nurses, it is likely that Beck objectors and employees everywhere will reevaluate whether they want their hard-earned dues money spent on organized labor’s political lobbying activates. Employees may not agree with their union leaders in Washington D.C. on everything and now have the right to carefully determine for themselves whether such activities are an appropriate use of their money. The Board’s decision in United Nurses could significantly impact the continued financial viability of private-sector unions and their ability to engage in lobbying and political activities.

Jonathan O. Harris, Office Managing Shareholder Ogletree Deakins – Nashville office jon.harris@ogletreedeakins.com www.ogletree.com

At Vanderbilt Peabody College, we believe that fostering the greater good is a critical component of any worthy effort. That's why we equip our students with the skills, knowledge, and experiences to carve out more than just a successful career path.

Peabody’s Leadership and Organizational Performance (LOP) master’s degree program trains professionals who can generate positive change in the workplace and beyond. The program’s evidence-based approach to strategy, decisions, solutions and evaluation creates leaders who are ready to change their field, their community, and the world.

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21

The Age of

Employment Turnover There is an intense struggle for talent among employers in America today. The dramatic shift in the labor market over the past decade has created an employee retention crisis. In May 2018, there were 6.6 million job openings in the United States and an unemployment rate of 3.8 percent — an 18-year low, according to the U.S. Department of Labor.1 The ADP Research Institute® (ADP RI) report, Revelations From Workforce Turnover. A Closer Look Through Predictive Analytics,2 says employee turnover is averaging 60 percent annually in the United States, with even greater rates seen in industries such as construction and leisure/hospitality.

Increased rates of employee turnover have been propagated through mobilization, the Glassdoor generation and the normalization of job-hopping. These factors, in combination with today’s booming economy, have made the retention of talent an organizational priority.

The ADP Research Institute: Revelations From Workforce Turnover The shift of prioritizing employee retention is not without merit. High levels of employee turnover and job vacancy rates can hinder a business’s ability to increase margins, optimize efficiency, grow revenue, drive employee performance and engagement, increase sales and new business growth, affect product and service quality, and remain competitive in the marketplace.

Across the past 30 years, the median tenure of each age group has held fairly steady, with some slight tenure decreases in the 45-54 and 55-64 age groups. In 2016, the median tenure of millennials — then ages 20-35 — mirrored or even exceeded the median tenure rates seen in previous generations, as reported by the Department of Labor in 2002, 2014 and 2016.

For employers looking to reduce turnover, it’s important to recognize the dynamics of age on tenure, to understand the wants of your employees at different stages of their careers and to incorporate all considerations into a compelling and authentic Employer Value Proposition (EVP).

EVP is the reason a quality employee would want to work for a business. This impacts talent attraction, engagement and retention.

It encompasses a broad range of employer offerings including — but not limited to — pay, benefits and total rewards, organizational culture, career growth and development, recognition, job purpose and even societal influence by the employer. A successful EVP will enable an organization to get the most from their talent, and is a large part of the complex puzzle of employee retention.

Replay our ReImagine Series webcast4 on Creating a Multi-Generational Employee Retention Strategy to learn more about the impacts of age and EVP on employee retention, and how to incorporate these considerations effectively into your employee retention strategy.

The millennial generation, in particular, has been stigmatized as job-hoppers. Seventy-five percent of millennials believe job-hopping can be good for their careers, staffing firm Robert Half3 found — that’s 16 percent higher than people ages 35-54 and 24 percent higher than people ages 55 and older. The U.S. Department of Labor data demonstrates, however, that the generational stereotype itself is unwarranted and the nature of their turnover is attributable more to age than the dynamics of their generation.

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1. https://www.bls.gov/cps/ 2. “Revelations from Workforce Turnover. A Closer Look Through Predictive Analytics,” ADP Research Institute, 2018.

3. “Should You Job Hop?” Robert Half, April 4, 2018.

4. “Creating a Multi-Generational Employee Retention Strategy,” (Webcast), www.adp.com/resources/events, September 19, 2018.

ADP, the ADP logo, and Always Designing for People are trademarks of ADP, LLC.

What are you #Working For? The things we work for define us.

At ADP we’re designing a better way to work, so you can achieve what you’re working for.

Discover HR, Talent, Benefits & Payroll, informed by data and designed for people. Learn more at design.adp.com

Getting to Know the Legislation that Affects Your Background Screening Most of today’s companies utilize some sort of background screening process before making a hiring decision. Criminal searches, driving record searches, reference checks, employment and education verifications, assessment testing, credit checks, and drug screening all fall under the “background screening” umbrella.

Screening an applicant’s background provides an employer several benefits. It offers a more complete picture of the candidate, verifies the validity of what they may have claimed in their resume and the interview, and identifies problem attitudes and behaviors that could be harmful to a workplace.

While background screening definitely has an important place in the hiring process, the process needs to be handled in a fair and compliant manner. In recent years, there have been a couple of regulation trends geared toward making certain employers aren’t using them in a discriminatory manner.

The first one is…

Ban the Box Laws The “ban the box” movement began to give those with criminal histories a fair chance to be viewed by their education and experience, rather than being passed over because they were a convicted felon.

The argument behind this trend is that when convicted criminals cannot find jobs they are more likely to re-offend. According to a recent article by Phillip Rondeau: Every year, 650,000 people in the United States leave prison to re-enter society, and they often find themselves shut out of opportunities to make an honest living. They have difficulty reintegrating into their communities and many end up back behind bars. This cycle leaves families and communities damaged and imposes substantial costs on taxpayers.

Reliable employment is one of the most important factors for successful re-entry, yet is more difficult for having a criminal record. People with a record have consistently lower earning potential and higher unemployment rates than others, and this contributes to recidivism.

Ban the box laws were passed to address this issue.

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States and Cities with Ban the Box laws Today, 33 states, the District of Columbia, and 150 cities and counties have passed a version of ban the box laws.

How does Ban the Box legislation affect your background screening process?

First off, employers don’t need to avoid criminal record searches all together. It’s just time to be more careful.

• Do away with “blanket” policies.

Companies must step away from “we don’t hire anyone with a criminal record” stances. This standpoint can be viewed as discriminatory and get you sued.

• Consider the job before screening. It’s relevant to know if someone applying for a cashier job has an embezzling conviction however, such a charge doesn’t need to influence someone looking to land a janitor position.

• Move your screening to later in the process. Instead of requiring it on the application at the beginning of the process, this gives you a chance to view the person’s qualifications and fit before you know of a criminal history.

The second legislation trend that is affecting background screening is…

Limiting the Use of Credit Checks in Background Screening Today, over a dozen states and cities have banned or restricted using a candidate’s credit history to determine whether to extend a job offer.

Since the last recession, using credit history in background screening has been scrutinized closely. Yes, there are certain jobs that require a strong credit check, but those are a small percentage of positions. Using an applicant’s credit history in the background screening process can be seen as discriminatory and irrelevant and pose an obstacle that prevents them from securing a job.

Limiting the use of a person’s credit history as part of their background check helps those with past credit problems, or those where their credit has nothing to do with the job they are seeking, to become employed.

How does Credit Check legislation affect your background screening process?

By MADDIE BRADIN

As with the Ban the Box laws, HR doesn’t need to scratch using credit checks on job candidates for everyone. They just need to approach it thoughtfully.

• Only use a person’s credit history as part of their background check if it’s relevant to the position. For example, if the employee will be handling large sums of money, have access to sensitive consumer information, trade secrets, or have the authority to sign transactions on behalf of the company.

• Create a written plan. If your organization will use credit checks for employment decisions in any capacity, write out the procedure. What type of positions will you consider credit history? When will you use it in the process? What issues stemming from a person’s credit report show will sway you to not hire them?

Laying this all out in advance helps protect you from a discriminatory lawsuit down the road.

Important note! Always stay abreast of the current and upcoming laws governing both Ban the Box and limiting credit history use in employment decisions. Edit your background screening policies accordingly.

HR is tasked with hiring the people who will perform that best and be a good fit within the company’s culture. It’s a big job! Background screening is a key element in making certain new employees are qualified for the position and are a safe addition to the workplace.

The recent trends of limiting certain ways to screen job applicants should not deter HR from using background screening. Now is the time to review your current screening process to ensure it’s used in a relevant and fair manner, and it complies with your state’s laws.

Doing this will maximize the effectiveness of your process and minimize the chances of making a bad hire.

This article is not intended as legal advice, only as a general guide. If you have questions regarding the applicability of these laws in the state(s) where your company does business, you should contact your state department of labor.

Maddie Bradin, National Account Executive Data Facts, Inc. mbradin@datafacts.com www.datafacts.com

Expanding the Pipeline for Talent Development & Recruitment

By AUSTIN BAKER

With unemployment at an all-time low and “job hopping,” a common phenomenon, recruiters are running into more and more issues finding the right talent and retaining them for years to come. Approximately three quarters (72.8%) of recruiters are struggling to find relevant candidates. Even after finding those candidates, 40% of employees surveyed said they planned on changing jobs in 2018. With those alarming statistics, it is no surprise that employers have been focusing more and more of their resources on talent management.

A unique approach that expands job pipelines outside of everyday recruitment involves a more intimate approach to the hiring process – one that involves nurturing talent.

As Elder Craig Cardon said best “We must develop the capacity to SEE people not as they are present, but as they may become.” Organizations in Memphis haven taken tremendous strides with talent development initiatives with focuses on: mentoring, direct-hiring practices, and community assistance channels.

MILE – Nurture Through Mentorship The Memphis Institute for Leadership Education (MILE) is a program within the Fogelman College of Business and Economics designed to provide additional leadership education for business students. Its specific mission is to prepare FCBE students to be future leaders in the city of Memphis through leadership development programs and mentorship.

Many local corporations including International Paper, FedEx, First TN, Hilton, CBIZ, The Peabody, State Systems, Bryce, Dixon Hughes Goodman, Baptist, State Systems, MasterIT, and countless other organizations have sent mentors for many years throughout MILE’s existence. Many consider MILE to be very important with regards to internal leadership development, talent attraction, and providing pre-internship support of their talent strategies.

More than 2,000 people have been touched by MILE with former students continuously becoming the next generation of teachers. Developing a direct link from employers to students before they graduate, provides those employers an upper hand when those students graduate and begin their search for entry-level positions into their careers. The one-on-one mentoring relationships allow for individual attention to students' career aspirations, professional development, and networking needs. In turn, the mentor and their organization receive enhanced brand recognition, talent loyalty, and in some cases a direct hire.

The mentor relationship developed in the MILE program builds the pipelines for mentors to garner interest, develop skills, and directly network with students ready to enter the professional field.

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FedEx On-Campus Call Center – Nurture Through Pre-Employment Opportunities In late 2017, FedEx unveiled that they will be opening a new call center directly in the University of Memphis campus. In this call center, undergraduates work about 20 hours a week at $15 an hour in the time between their classes. This call center provides employees a salary and schedule that allows them to focus on their classes, while receiving a living wage at the same time.

Rob Carter, FedEx executive vice president and chief information officer, said the venture helps fulfill the potential of the FedEx Institute of Technology.

“It was part of the dream that it would be in fact a center of innovation that would cause cool new models and cool new ways of doing things to burst onto the scene and to be a point of pride for the university and FedEx and our city,” Carter said.

“It’s clearly a win for FedEx, our opportunity to connect with this bright new generation of digital natives that understand technology to their core, ideally suited to handling some of our technical support calls,” Carter said. “It’s a wonderful win for our company because it also prepares these students to better enter the workforce and potentially enter our workforce."

This unique initiative creates a workforce pipeline for entities like FedEx or any other partner that the university has. The students will become familiar with the company, receive real job training, and comprehensively become a part of the culture. This initiative creates well-paying jobs in a professional environment for students on campus and gives them the relevant experiences to better prepare them for a career beyond the University of Memphis. Students participating in these jobs build on the first step of a relationship with the employer, as well as already understanding their culture, operations, and mission.

The Goodwill Excel Center – Nurture Through Community Assistance Programs Finding positions that pay competitive wages often require two prerequisites, at minimum: a high school degree, and some sort of skillset or certification. In Memphis, there is an astronomical pool of candidates that have neither of those. There are 131,000 adults in Shelby County without a high school diploma and 2,000 high school drop-outs in Memphis each year.

The Excel Center’s sole mission is to fight those statistics. The Excel Center is the first free, public charter high school in Tennessee that

provides adults ages 17-50 the opportunity to earn their high school diploma, complete an in-demand professional certification, and begin post-secondary education.

Obtaining a high school diploma can make the difference between getting a job and getting the job that employees want. With the additional education and training available at the Excel Center, students will be able to enter the job market more quickly, command a higher salary, and turn a job into a long-term, sustainable career.

Developing a presence within these institutions allows companies to garner the positions that are generally harder to fill and require certificates such as forklift drivers, operations managers, building safety professionals, and many more. The individuals graduating these programs found the initiative to finish school and develop themselves for better opportunities. Year after year, the number of students and graduates of these programs have increased, with 395 students to have graduated from the most recent class. As the pool of these graduates grow, employers will have more local resources to turn to in filling the harder to find positions.

Final Thoughts With the emergence of unique talent management initiatives such as the ones mentioned above, employers are able to expand their mono-centric talent pipeline to opportunities outside of direct applicants. Talent nurturing has created avenues of unique initiatives employers can implement to make their organization stand out. Cultivating leadership and nurturing talent demonstrates to individuals that they are valued. While some may take a hand’s off approach, the best leaders take active interest in developing leaders. In this way, the emergence of new leaders from within the ranks becomes an indicator of high engagement and a culture of consistent improvement, while also enabling the organization to grow and evolve.

Austin Baker, President HRO-Partners

Austin Baker is the President of HRO Partners, a human resources consulting and benefit administration and enrollment firm as well as a National Enrollment Partner Member representing the largest boutique, full service insurance and enrollment firms in the country. A veteran of more than 16 years in the human resources and insurance & benefits industry, Baker is responsible for managing a multifaceted human resources consulting company with public workforce programs and services focused on companies in the southeastern United States. Austin is a frequent speaker on a variety of leadership and benefit topics representing thought leadership and innovative practices in the HR industry. 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, www.linkedin. com/in/jaustinbaker or twitter.com/jaustinbaker. hro-partners.com company/hro-partners

hropartners @hropartners

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PCORI: Mental Health Research and Outcomes

By LISA A. MARINO

National tragedies have heightened mental and behavioral health awareness. It is has become increasingly evident that individuals with serious mental health illnesses often struggle to receive proper mental healthcare in order to produce optimal care outcomes. One such struggle is the limitations placed on mental health benefits stipulated in most healthcare policies. The most publicized mental healthcare reform to address this issue is the Mental Health Parity and Addiction and Equity Act (MHPAEA) originally passed in 2008 and amended in 2010 by the Affordable Care Act. Another portion of the Affordable Care Act, the Patient-Centered Outcomes Research Institute (PCORI), an independent nonprofit, nongovernmental organization in Washington, DC, was authorized by Congress in 2010 to close that gap.

In this study, the research team assigned 11 mental health centers by chance utilizing random assignment. The research team gave different forms of health and wellness support to patients with serious mental illness. All patients in the study worked with wellness coaches and all coaches received special training. They taught patients skills to help them manage their health and healthcare. Nurses helped patients get healthcare and improve their health and wellness. The nurses also advised the wellness coaches about working with the patients.

Self-directed patients got online or paper resources with information designed for them. Resources included worksheets and manuals to help them improve behaviors like eating healthy food and exercising. The team then compared nurse supported and self-directed outcomes.

The Patient-Centered Outcomes Research Trust Fund fee is a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans that helps to fund the Patient-Centered Outcomes Research Institute (PCORI). The fee applies to policy or plan years ending on or after Oct. 1, 2012, and before Oct. 1, 2019.

The amount of the PCORI fee is equal to the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount for the year. The applicable dollar amount is adjusted yearly to reflect inflation in National Health Expenditures, as determined by the Secretary of Health and Human Services. For policy and plan year ending on or after Oct. 1, 2018, and before Oct. 1, 2019, the applicable dollar amount is $2.45 per employee per year.

The results of this study indicated that the two types of extra support had about the same success in helping patients with serious mental illness. By the end of the study, patients in both groups reported increased involvement in their health care, doctor visits, quality of life and satisfaction with their care. They were also more likely to get routine and specialized physical health care when they needed it.

Patients in both groups reported that their mental health improved. At the same time however, they viewed their physical health as being worse.

Researchers interpreted the worsening health status as a consequence of patients’ improved understanding and acknowledgement of their health brought about by their increased engagement in preventive and maintenance care. The researchers felt that longer periods of observation would demonstrate a gradual improvement in physical health as patient engagement translated into better health behavior.

As of August 2018 PCORI had awarded $434 million to fund over 100 comparative clinical effectiveness research studies related to mental and behavioral health. PCORI will assist, through research, patients, clinicians, purchasers and policy-makers, in making informed health decisions by advancing the quality and relevance of evidence-based medicine. PCORI’s Evidence Synthesis Initiative takes that approach.

The program includes rigorous reviews of the best evidence available on topics of critical concern to patients and other healthcare stakeholders.

The goal is to synthesize all relevant completed studies on a particular clinical question in order to provide evidence that is stronger and more certain than the results of the individual studies.

We will focus on one such PCORI study entitled “Using Wellness Coaches and Extra Support to Improve the Health and Wellness of Adults with Serious Mental Illness”, which examines the evidence that people with serious mental illnesses like bipolar disorder or schizophrenia often do not receive optimal mental healthcare nor are they inclined to pursue physical healthcare. It has been established that individuals with serious mental illnesses struggle to receive care to address common chronic physical health problems since they often lack the capacity to communicate effectively, the ability to advocate for themselves, and the comfortability in a doctor patient setting when they are on their own.

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Ultimately care collaboration, resource integration and extra support is of paramount importance in optimizing mental, behavioral and physical healthcare outcomes. Similarly PCORI studies employing alternative extra support methods have yielded similar findings. Of utmost importance is disseminating and promoting the uptake of these research findings. The dissemination and promotion process is part of PCORI’s legal mandate to improve the quality and relevance of evidence available to help patients, caregivers, clinicians, employers, insurers, and policymakers make better-informed health decisions. Healthcare and community programs can and should use these results to help people with depression and serious mental health disorders for care optimization. This study is a tangible example of the value of PCORI and its positive impact on the lives of those affected by mental health issues.

Lisa A. Marino FLMI 1, ACS, HIAA Group Health Senior Underwriter Insurance Officer McGriff Insurance Services lmarino@mcgriffinsurance.com

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Is the Gig Economy Affecting Your Bottom Line?

By CHRISTIAN VALIULIS

In the days of low unemployment rates, competitive salaries, and a shortage of qualified workers, companies are battling for quality employees against a silent enemy. The increasingly popular gig economy is the arch nemesis you never knew you had. More commonly known as freelance or contract work, the gig economy is an emerging market where individuals can work multiple, small jobs compared to the traditional full-time permanent position.

According to Clutch’s 2018 Gig Economy Survey, nearly one in five employees are currently searching for a freelance opportunity while companies are losing valuable workers to the “be your own boss” and “work when I want to work” mentalities of the gig economy. Many employees feel unsatisfied with their current full-time position after years of stagnant pay and monotonous work. They want to explore their passions in a more flexible role, so they freelance without fear of losing their primary source of income. Businesses are more at risk of losing employees to the unstable environment of self-employment, with twenty-five percent of employees reporting their manager has no idea about their side jobs. Do you know how many of your employees are freelancing?

What’s At Risk 57 million U.S. workers are in the gig economy. Some researchers even project that half of the working U.S. population will move into freelance work within the next five years. That’s a hard, bitter pill to swallow and it’s naive to think these numbers aren’t impacting your workforce.

Think about your current turnover rate. The replacement cost of a lost employee is $15,000 per person for a worker earning a median salary of $45,000 a year, according to the Work Institute’s Retention Report. As turnover increases, customer satisfaction, organizational growth, and profitability suffer. Can your business afford to lose so much?

Clutch also reports that sixty-nine percent of employees outsource their skills to earn extra money. How can your company keep permanent workers without necessarily raising salaries? It starts with examining the employee experience and determining what retainment tactics your company can incorporate to combat increased turnover to gig work. Whether you offer extra PTO hours, create customized training plans, or schedule weekly check-ins, enhancing your employee experience will help safeguard your workforce from the gig economy.

Offer a “Buffet” of Benefits to Employees If your company can’t afford to increase salaries, consider incorporating alternative benefits and perks that cater to your employees. Get to know your employees and what’s important to them. Offering the standard benefits package plus a lower salary isn’t going to motivate workers to stay in their full-time role for an extended period of time. The gig economy has an attractive pull for those who enjoy flexible schedules or want to be their own boss. Adjusting your approach to employee benefits conveys the message that you’re listening to your workforce and are making an effort to keep them satisfied in their position.

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Start by reviewing what benefits or rewards are currently being offered to your employees. Then, survey your employees to find out what they think about their current benefits and the types of benefits options they would like to see implemented. If you conclude your benefits packages aren’t appealing enough, revamp your offerings to give employees more options when they earn a promotion or bonus. Consider these instances where you can beef up your benefits structure: • Alternatives to Monetary Bonuses: If your company is unable to provide monetary bonuses when a large company goal is met, consider rewarding employees with a list of perks like extra paid time off hours, a company-paid percentage of health insurance, or a paid wellness membership. Microsoft offers an annual $800 “Stay Fit” reimbursement to help cover the cost of gym and fitness memberships.

• Reward Employees for Work Anniversaries: Some companies can’t afford to raise salaries for employees each year, so you can provide special perks for significant work anniversaries like five or ten years of service. Employees who have remained loyal to the company for several years may deserve rewards like a vacation with company-paid travel, sabbaticals, or an increase in their favorite perk. Nike perks vary by position, experience, and location. They include benefits like paid sabbaticals, summer hours, and fitness discounts.

• Supporting Higher Education: Sixty-two percent of Americans over the age of 30 have student loan debt, so offering to pay a portion of your employees’ student loans may be a great option.

This perk could apply to the employee or their child earning a higher education. Taco Bell provides education benefits to all of its employees that include access to academic and financial aid coaches, as well as up to $5,250 a year in tuition assistance.

Communicate to your employees that they play an essential role in the success of the business by providing benefits they wouldn’t have in the gig economy. If you’re planning to offer a variety of employee benefits, allow your employees to choose which benefits they would like best.

Giving them the power to choose is an excellent indication of what’s most important to them and allows you to cultivate a more positive work environment. You can even use an online workforce management solution to create a quick and efficient benefits enrollment process.

Invest in Long-Term Training and Development It is a manager’s responsibility to discuss their employees’ current and future goals so they can carve out enriching career paths. Managers will know what skills and experiences are needed to move up in a role because they have likely gone through the same career development as well. Employees often start looking for alternative career options when their company isn’t committed to their long-term growth.

Invest in employee training by creating a tailored development plan for goal achievement. Talk to your employees one-on-one about what they want to accomplish, skills they wish to acquire, and what help they need to meet these goals. Cultivate employee growth with opportunities to attend conferences, participate in team retreats, or through continuing education.

Setting specific career development goals will assist you in creating a customized performance management plan.

Continuing education can easily be managed through affordable learning management platforms that offer a range of courses. An LMS allows your employees to learn at their own pace and is accessible from any device, making it easier for employees to work on their career path.

Get Real About Performance Management Without regular one-on-one conversations about performance and goal progressions, employees won’t be on the right track for role development.

Review your current performance management process to identify ways to improve.

A great place to start is conducting frequent performance reviews or meetings designed to create open communication with employees. Participating in weekly or biweekly check-ins creates a feedback loop allowing employees to make constructive changes to their work habits for improved performance. If an individual isn’t getting the mentorship and guidance they are looking for from their manager, they may seek it outside the company.

Both DocuSign and Adobe have abandoned the annual performance review, opting for continuous feedback with their employees. This approach gives employees the opportunity to talk candidly with their managers about

their career and progression path so they’re always aware of how they’re doing. As a result, DocuSign has seen an increase in employee retention and Adobe has seen a 30 percent decrease in turnover.

It’s important to track these valuable employee interactions and organize your performance management process. By using tools like a workforce management solution, you can analyze individual performance, refine goals, and optimize your career development strategy.

Keep Your Employees Happy As more workers jump on the gig economy bandwagon, businesses need to gather information about why employees are heading for the hills and what’s attracting them to specific roles. Conduct an audit of your company’s benefits offerings, career development opportunities, and performance review structure. From there, develop a strategy around these areas of the employee lifecycle by focusing on what your workers are looking to achieve in their current roles and beyond.

When you begin to understand why your employees are frustrated, you can create a plan of action that fosters retention. Once you begin offering a more fulfilling employee journey, you’ll see reduced turnover and increased profitability. Just remember, happy employees are your best defense against the gig economy.

Christian Valiulis, Chief Revenue Officer APS Payroll cvaliulis@apspayroll.com www.apspayroll.com

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Tim’s TOP

TEN

OFCCP

Affirmative Action Predictions for 2019 For those who watched the popular long running David Letterman late night show and enjoyed his famous and infamous Top Ten List, here is my version of Tim’s Top Ten list OFCCP Predictions for 2019.

This is a brief overview of the OFCCP initiatives and directives under OFCCP Director Craig Leen the most in twenty years. His changes are positive steps to work with employers and “no more fishing expeditions.”

Make no mistake OFCCP has not changed its mission to enforce nondiscrimination with more audits are coming. The directives are not law and are intended to give guidance to OFCCP compliance officers and gives insight in how the agency will handle audits and its focus. Details of these Directives can be found here: https://www.dol.gov/ofccp/regs/compliance/directives/dirindex.htm As David Letterman would say, “NUMBER TEN” OFCCP Director Craig Leen made very clear publicly, in private meetings and during listening sessions with employers, lawyers and consultants he is taking steps to improve transparency, cooperation, and communication. First, OFCCP Implemented 45-day scheduling delay from the time a Corporate Scheduling Announcement Letter (CSAL) letter is issued to provide contractors more time to prepare for audit and participate in OFCCP compliance assistance events. Second, the scheduling methodology and expectations was published and third, the agency for the first time is publishing the audit list of employers. Contractor selection for compliance evaluations is now on line. Here is the link: https://www.dol.gov/ofccp/foia/ foialibrary/index.html Now What: There is no excuse not to prepare a “dry” audit prior to receiving the notice. The list is updated 2-3 times a year. You are required to prepare the AAP to be in compliance regardless of whether you are on the audit list.

NUMBER NINE. Rule of Law. OFCCP does not make law and must follow what the law says. Contractors need to know how to comply under the law in advance, particularly with compensation reviews.

Now What: Understand and stay up to date on the regulations and laws. Politely push back should the agency use creativity to interpret or make law. Ensure the AAP is technically correct.

Ensure records to defend employment decisions are maintained, review any adverse impact analysis to determine the cause and prepare a proactive compensation analysis to uncover disparities.

NUMBER EIGHT. Leen put Deputy Director Marika Litras in charge of closing old audits over three years old. “Active Case Enforcement” (ACE) directive required deep-dive reviews in every audit, DIR 2019-01 returns to Active Case Management (ACM) that allows OFCCP to conduct more audits with quick, efficient analysis of applicants, hires, promotions and terminations data and analysis of the pay system to determine if there are any significant red flags with the goal to close the audit in 45 days.

Now What: Ensure the AAP is prepared and audit ready every day. Ensure record keeping particularly aligned with the internet applicant rule and accurate dispositions are in place. 90% of all financial settlement findings are applicant/hiring violations due to poor record keeping to defend decisions.

Are all job seekers properly dispositioned based on the stage they were in based on the Internet Applicant Rule? Have all job opening been listed with the state employment service with a few exceptions? Is there adverse impact? These are but a few areas to assess in the preparation of the AAP. NUMBER SEVEN: Compensation is a major focus area for OFCCP. DIR 2018-05 rescinded Directive 307 but kept some of the controversial 32

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By TIM ORELLANO

features including pooled regressions, pay analysis groups (PAGs), analyzing multiple years of compensation data together with a focus on statistical data and empirical evidence. This means that OFCCP will evaluate both quantitative and qualitative information. OFCCP defines similarly-situated employees as those who would be expected to be paid the same based on job similarity (tasks performed, skills required, effort, responsibility, working conditions and complexity) and objective factors such as minimum qualifications or certifications.

The agency will always conduct analysis by job group and will merge other job groups they believe are similar to make their regression tool work.

Now What: Conduct proactive attorney privileged pay equity analyses by an expert compensation analyst using the methodologies set forth in the Directive to mirror OFCCP’s expected analysis. Review job groups to group similarly situated jobs in sub groups that align with compensation, job functions and qualifications. Investigate unexplained differences in pay before the agency does it. OFCCP encourages contractors to develop Pay Analysis Groups (PAGs) which the agency will accept if “reasonable.” Be prepared to defend job groups, however, job groups are not generally the basis for a compensation system in the law and from my experience of an organization’s pay system. Stick to the position that compensation is tied to job titles not job groups.

NUMBER SIX: Director Leen believes in the spirit of compromise in working towards a solution to minimize time, costs and legal entanglements. DIR 2018-01 was issued to use Predetermination Notices (PDN). Should OFCCP allege discrimination findings, they will issue the PDN to work out a reasonable solution or remedy before sending a Notice of Violation (NOV). In the past, the NOV was issued up front. The PDN policy means OFCCP will issue a preliminary notice of findings before reaching any final conclusions. It affords the contractor 15 calendar days to respond and rebut the preliminary conclusions.

A new option in certain situations is Early Resolution Procedures under DIR 2019-02. Although some aspects of the new Early Resolution Procedures may be helpful, contractors need to consider the ramifications very carefully before agreeing to the new OFCCP’s Early Resolution Conciliation Agreement with Corporate-Wide Corrective Action (ERCA), especially for material violations alleging discrimination.

Now What: Employers should take advantage of the PDN to work towards a compromise to defend and explain how OFCCP’s conclusion may be in accurate. Always seek advice from a consultant and attorney during these negotiations. The new Early Resolution Procedures option could have unintended consequences because it will involve a Conciliation Agreement with Corporate-Wide Corrective Action (ERCA) and reporting for each establishment. Even though there is a five year audit moratorium for that particular establishment on future audits it does not provide a moratorium on other establishments.

NUMBER FIVE: Directive 2019-03 establishes opinion letters and an enhanced help desk. It should provide contractors with useful compliance assistance and has a searchable help desk for questions and answers or to submit questions for an opinion about certain situations.

Now What: We will wait a see how this new initiative works.

NUMBER FOUR: Mr. Leen expects there should be 100% compliance of an AAP, but knows many are not in compliance. A verification process to certify you have prepared your AAP is coming under Directive 2018-07.

OFCCP historically has only audited approximately 2-3% of government

contractor establishments each fiscal year (FY 2018 780 audits).

OFCCP is working on using the current System for Award Management (SAM) data base to require all contractors to certify compliance under penalty of perjury. OFCCP’s goal is to implement some form of certification compliance, spot checking, or a universal request for annual submission of AAP’s from all contractors. Expect OFCCP to utilize the current SAM process for potential “compliance checks” as verification and if not verified increased likelihood of selection for a full audit. It is expected that an annual Summary AAP will be submitted to certify contractor compliance.

Now What: Prepare an AAP timely and be ready. The AAP certification process is coming and will require certification annually with the goal to submit a summary of the AAP. NUMBER THREE: Religious Exemption: Directive 2018-03 instructs OFCCP staff to take into account recent U.S. Supreme Court decisions and White House Executive Orders that protect religious freedom. OFCCP staff are instructed not to pass judgment upon or presuppose the illegitimacy of religious beliefs and practices. Section 202 of E.O. 11246 does not apply to contractors that are religious corporations, associations, educational institutions, or society, with respect to the employment of individuals of a particular religion to perform work. The Supreme Court issued rulings in 2014, 2017, and 2018 that safeguard the broad freedoms and anti-discrimination protections that must be afforded religion-exercising organizations and individuals under the U.S. Constitution and federal law and to respect the right of religious people to practice their faith without fear of discrimination or retaliation by the federal government.

Now What: Watch for the audit list on the OFCCP website. Review the OFCCP launched the 503 Focused Review landing page. http://tinyurl. com/y3oenhhf It provides a sample of the Focused Review Scheduling Letter, the website also includes a list of employer best practices and resources as well as a set of FAQs. Can you provide the documentation to provide the information and data? Ensure accommodation practices are well documented especially evaluation of outreach and recruitment efforts, review of all employment practices, selection procedures for hires and promotions, compensation systems, and impact ratio results will ensure you are ready to meet the focused review challenge.

It will be a very busy year with 3,500 audits in 2019 and that is not counting those for last year’s scheduling list. OFCCP collected over $15 million in FY 2018. It will be higher this year. This cost does not include attorneys, consultants and loss of productivity and media disclosure.

While OFCCP is committed to transparency and employer collaboration, keep in mind they are an enforcement agency and your AAP can be an effective management tool or it can be a liability document and used against you that will cost the company time and money.

I hope my Top Ten list is informative and will help with the game changing initiatives. I encourage you to proactively take the Now What actions steps.

Tim Orellano, PHR, SHRM-CP President, the Human Resources Team timorellanohrteam@comcast.net www.thehumanresourcesteam.com

Now What: This does signal a change how the agency reviews religious accommodations during compliance evaluations. It may impact complaint investigations against certain employers which allege discrimination on the basis of religion or sexual orientation and gender identity. The DOL is expected to release proposed regulations, which would seek to codify the directive with specific rules, by the end of the year, followed by a required a public comment period. Stay tuned.

NUMBER TWO: Focus on Disability Rights-Protections and Veteran and Individuals with Disability (IWD). The agency is placing an emphasis on measuring the “effectiveness” of recruiting outreach and hiring of vets and IWD to see more progress that accommodates IWD in hiring because IWD unemployment is higher than any other category.

Now What: Conduct a thorough assessment of the “effectiveness” of outreach. No longer can you depend on just the listing of the opening with various sources – the “push out” of job openings. Now you must measure the “pull in” of applicants and hires.

An assessment will be part of an audit submission and is required in the AAP to measure the results in applicants and hires.

NUMBER ONE: Expect more audits. Director Craig Leen is increasing the number of audits from 780 in FY2018 to 3,500 in FY2019 to include 500 “Focused Reviews”. Focused Reviews will be on site at corporate headquarters and will target VEVRAA and Section 503 of the Rehabilitation Act. The directive’s description of Section 503 focused review, states” OFCCP would also seek to evaluate hiring and compensation data” in addition to its evaluation of accommodation practices to ensure individuals with disabilities are not being discriminated against in employment. The audit will include submission of the AAP. The review will include interviews with managers and employees, hiring and compensation data, and the handling of accommodation requests. The Focused Review audit Scheduling Letter is similar to #7- #14 of the current Itemized Listing and includes a focus on ADA policies.

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Legal Protections for Transgender Employees

T

By MICHELLE KAEMMERLING and SHELBY HOWLETT

he past few decades have brought significant changes to the federal government’s stance on what rights and protections are afforded to people who identify as lesbian, gay, bisexual or transgender—commonly referred to as the LGBT or LGBTQ community. In 2003, the Supreme Court struck down laws criminalizing same-sex intimacy and, in 2015, the Supreme Court ruled that the right to marry is guaranteed to same-sex couples.

During the Obama administration, federal agencies expanded the rights and protections given to individuals who were previously excluded due to their LGBT status. Yet, some of those positions are being revisited by the current administration, and there is disagreement in the courts as well.

One still unresolved question for the LGBT community is to what extent federal employment law protects transgender employees. A transgender individual is one who identifies with a different gender than the one assigned to them at birth. Gender identity is a person’s internal sense of being a man or a woman. For transgender people, the gender they were assigned at birth—based on their anatomy—and their own internal gender identity do not match. Federal courts and agencies are divided on whether federal anti-discrimination employment law extends to transgender employees.

Disagreement in the Courts Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against employees on the basis of sex and a number of other categories, but does not explicitly list sexual orientation or gender identity.

The question currently being litigated is whether the prohibition against discrimination on the basis of sex by definition includes discrimination on the basis of sexual orientation and gender identity.

While the United States Supreme Court has never addressed this question, it has held that discrimination based on gender stereotyping is a form of sex discrimination protected by Title VII. Accordingly, it is unlawful to take a negative employment action against a male employee because he acts effeminate or against a female employee because she is not “lady like.” For example, in the 1988 case Price Waterhouse v. Hopkins, a woman sued her former employer after she was denied partnership. The employee claimed that she was not promoted because she did not match the partners’ ideas of how a woman should act, speak or dress. Specifically, she alleged that the partners suggested that she walk, talk and dress more femininely, wear makeup, style her hair and wear jewelry. In this important case, our highest court ruled that this type of discrimination claim based on failure to conform with societal gender norms is actionable under Title VII. Such “sex stereotyping” claims can be brought by transgender employees who allege discrimination because they do not dress or act in conformity with societal expectations for their assigned sex. But the question of whether Title VII also prohibits discrimination on the basis of sexual orientation or gender identity is still unresolved. The Sixth Circuit, which encompasses Kentucky and Tennessee, has ruled that transgender employees are protected under Title VII because transgender discrimination is a type of sex discrimination. (EEOC v. R.G. & G.R. Harris Funeral Homes, Inc.) Conversely, the Eleventh Circuit, which encompasses Georgia and Alabama, maintains that Title VII’s ban on sex discrimination does not extend to transgender discrimination. (Glenn v. Brumby) 34

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Because of the uncertainty about whether transgender discrimination is prohibited by Title VII, many hope that the Supreme Court will weigh in. A case that presents the issue has been appealed to the Supreme Court but, at the time of publication, it appears unlikely that the Court will hear the case. It is important to note that although the state of federal law remains unclear, almost half of the states have employment civil rights laws that expressly prohibit discrimination based on sexual orientation and gender identity.

Conflicting Views Among Federal Agencies Both the Obama and Trump administrations brought major changes in the way federal agencies handle discrimination against transgender employees. Because of the different stances of the two most recent administrations, we currently do not have consistent positions on these issues even among federal agencies.

For example, the Equal Employment Opportunity Commission (EEOC)—which is the federal agency that oversees enforcement of Title VII—issued guidance during the Obama administration asserting that Title VII protects transgender employees from discrimination.

In 2016, the EEOC announced that it would accept, investigate and pursue charges from individuals alleging that they were discriminated against because of their transgender status or sexual orientation. As a result, the number of LGBT-based sex discrimination charges the EEOC resolved increased from 337 cases in 2013 to 1,649 cases in 2016. The EEOC maintains this position today and continues to pursue LGBT claims despite the Trump administration’s conflicting view. In 2017, the EEOC resolved 2,016 LGBT-based sex discrimination charges—its largest number to date. (https://www.eeoc.gov/eeoc/statistics/enforcement/lgbt_sex_based.cfm)

Unlike the EEOC, the Department of Justice (DOJ) reversed its position on transgender discrimination after President Trump took office. In October 2017, Attorney General Jeff Sessions directed the Department of Justice to take the position in court cases that transgender employees are not protected by Title VII, effectively reversing the Obama-era approach. In a memo sent to all United States attorneys, Sessions said that the department should take that position in all pending and future cases. (https://assets.documentcloud.org/documents/4067383/Attachment-2.pdf )

The Office of Personnel Management (OPM) also recently rolled back protection against transgender discrimination. OPM is the agency in charge of developing human resources policies for federal government employees. In November 2018, the Trump Administration removed guidance for federal agencies regarding transgender employees from the OPM website. The OPM also released a memo stating that agencies are only required to change the gender or name of an employee’s personnel file after receiving legal documentation. This is contrary to the OPM’s previous position, which noted that legal change can be difficult and that agencies should allow an employee to change their name without legal documentation. OPM also removed guidance instructing managers to use the name and pronouns that employees request. Despite this guidance, the memo stated that discrimination against federal employees based on gender identity is still prohibited.

Restroom Access

Compliance and Best Practices

In 2015, the Occupational Safety and Health Administration (OSHA) released a best practices guide to restroom access for transgender workers.

The core principle of the guide is that “all employees, including transgender employees, should have access to restrooms that correspond to their gender identity.” OSHA suggests that the best policy is to allow an employee to determine the most appropriate and safest restroom to use. OSHA also suggests providing optional single-occupancy, gender-neutral restroom facilities and multiple-occupant, gender neutral restroom facilities with lockable single occupant stalls. However, an employer should not require transgender employees to use single occupancy restrooms. The EEOC’s position on restroom access for transgender employees is essentially the same as OHSA’s.

Given the uncertainty in many aspects of employment law relating to transgender employees, employers should ensure they are in compliance with the laws providing the most generous protections. For example, OSHA and EEOC have issued clear guidance on restroom access. And, the Supreme Court has held that all employees are entitled to work in environments free of sex stereotyping. Also keep in mind that, in many states, transgender employees are protected from discrimination at work as a matter of state law. As a best practice, companies should train their workforce to be sensitive to issues impacting transgender workers. For example, managers should be trained to use the pronoun of the gender with which a transgender employee identifies. Because the applicability of certain legal protections to transgender employees is unsettled, employers who err on the side of treating gender identity as a protected class will minimize their legal risk and are likely to see other benefits associated with having an inclusive workplace.

The Military Another area where transgender discrimination policies are in flux is the United States military. In July 2017, President Trump announced a policy via Twitter that bans transgender persons from serving in the military, with limited exceptions. The policy was officially announced in a statement by then-Secretary of Defense James Mattis in 2018. There is an exception to the policy for transgender people who already serve in the military openly or new members who are willing to identify with the gender they were assigned at birth. The policy was promptly challenged in federal court and several courts ordered nationwide injunctions. In January 2019, the United States Supreme Court lifted two preliminary injunctions out of California and Washington State, intending to allow the ban to take effect while the lower courts hear additional arguments. However, the Supreme Court’s decision did not address a third injunction from a case in Maryland, so a nationwide injunction is still in place at the time of publication. It will likely be years before there is a final decision on the legality of the military’s transgender ban.

Michelle Kaemmerling Partner, Labor & Employment Team Leader Wright Lindsey Jennings mkaemmerling@wlj.com www.WLJ.com

Shelby Howlett Law Clerk Wright Lindsey Jennings showlett@wlj.com www.WLJ.com

We use our best tools to make your job run smoothly and efficiently.

FordHarrison is a labor & employment defense law firm with 28 offices, including three affiliate firms, and is the sole member of the global employment law firm alliance, Ius Laboris. Guided by the FH Promise, FordHarrison delivers the highest quality legal service and communication to our clients. www.fordharrison.com

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v

A STRATEGY for Strategy

By CAMMIE SCOTT

Professionals often hear things such as:

• You need to be more strategic in your thinking.

It is a scheme or plan comprised of activities that are designed to deliver a unique mix of value. It is choosing to perform activities that will give you a competitive advantage, such as: doing activities differently, or performing activities that rivals are not doing, or in a way they are not doing them.

• It’s all about strategy.

Why is it Important?

But what is strategy? What does that mean and how can you use it to your advantage?

Although most people are not generals and most businesses are not involved in an active combat situation, we all want to have more, be more, and do more. Individuals and businesses alike face the challenge of limited resources. This is where strategy comes into play. Strategy involves setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions.

A strategy defines how you will achieve your goals with the resources you have available.

• Your strategy needs to be aligned with the strategy of the organization.

• What is your strategy for this situation?

What is it?

Strategy is a military term. It comes from the Greek word “stratiyeia” which is a combination of “stratos” or army and “ago” which means guiding, moving and leading armies.

It is the art of troop leader; office of general, command, or generalship. The word referred to the stratagem, plan or scheme intended to outwit an opponent or achieve a purpose.

Ancient generals used it to deploy their troops and defeat the enemy.

In the 18th century, it was translated into the Western language meaning a comprehensive way to try to pursue political ends, including the threat or actual use of force in a military interaction in which adversaries meet.

In today’s world, a strategy defines goals and how they are achieved within the limits of one’s resources. It is a high level plan to achieve one or more goals when conditions are uncertain.

The Business Dictionary defines strategy this way: 1. A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem 2. Th e art and science of planning and marshalling resources for their most efficient and effective use. The term is derived from the Greek work for generalship or leading an army. http://www.businessdictionary.com/ definition/strategy.html 36

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Strategy provides a framework for making decisions about how you will play the game of business and life. Daily you face decisions about capital investments, operational priorities, marketing efforts, hiring, firing, branding, and sales all while managing your own life goals, priorities, and to do list. The strategy guides your decision making process to ensure you don’t go in too many different directions, accomplish little, squander resources and profits, or suffer confusion and discontentment in your personal life.

Strategy versus Planning Although the words strategy and planning are often used interchangeably or together, they are not the same. There is a difference in a plan and a strategy.

PLANNING A plan lays out the actions needed to accomplish a task or goal. It is an arrangement, a pattern, a program or a scheme for a definite purpose. It is very concrete in nature and doesn’t allow for deviations. If Plan A doesn’t work, then you go to Plan B which is different from Plan A.

Plans are useful tools to keep you organized and on track. A plan provides a clear framework from which to build a sure direction to follow, with intermittent milestones to pass in order to reach an end goal. It gives confidence and stability. It increases transparency of work, leaves no room for assumptions and brings clarity to the actions that need to be done to accomplish the goal.

Types of plans include: • Contingency – What is our backup plan?

• Succession – Who will take over if a key person dies, becomes disabled, or retires?

• Operational – What is our process f or this?

• Sales – What will we sell, who will we sell it to and how will we sell it?

• Financial – How much do we want in profits and how will we get it?

STRATEGY A strategy is an idea used to accomplish a goal. It is very flexible and open for adaptation and change.

Strategy involves creativity, collaboration and innovation. It encourages openness and debate from every side. It embraces questions and out of the box ideas. It allows for a natural flow of thought and continual momentum that builds success principles. It can surprise, impress, progress and put you the track to becoming not only a competitor, but a winner in your industry.

Strategy doesn’t answer all the questions needed for implementation. That’s planning. Strategy sets the direction.

Planning plots the course.

Where Do You Get Strategy?

Strategy is about shaping the future. It can be planned or it can organically emerge from activity patterns as the organization competes and adapts to a changing set of circumstances.

Dr. Vladimir Kyint defines strategy as “a system of finding, formulating, and developing a doctrine that will ensure long-term success if followed faithfully.”

Today’s military relies heavily on complexity theory and game theory when they are developing their strategies. Complexity theory looks at the world as a complex system in which many components are interconnected and impact one another. For example, the collapse of the subprime mortgage market triggered the financial crisis of 2008 that led to collapse of Lehman Brothers and an international banking crisis. It was the snowflake that triggered the avalanche.

Game theory, in a technical sense, uses math to look at strategic interactions between rational decision makers. It is a method of strategic thinking where decisions are made by looking from different perspectives and anticipating possible actions and reactions.

The primary use of game theory is to describe and model how human populations will behave. For example, “What will the public perception be if we decide to outsource the work of a large group of employees and terminate their employment?”

It Starts with Really Good Questions You don’t need to be a statistician or an expert in string theory to be good at strategy, however you do need to be really good at asking questions. This often means you have to step out of your individual role in an organization and think about the organization as a whole.

Consider what core capabilities you will need to have to meet your business objectives. In other, words what resources (sales people, technical, buildings, supplies, expertise, etc.) do you need to accomplish the stated mission?

It Ends with a Plan

• What value do we create?

• What sets us apart?

• What are customers willing to pay for?

• What is your business model?

• How will we turn an idea into revenues?

• What core capabilities are needed?

• What is the timeline of the product launch?

These are only a few of the questions you will need to answer when developing a winning strategy. Think about what the organization will do to deliver value to customers, generate revenues, and increase profits. Strategy establishes the game you are playing and how you expect to win. It also defines what you don’t do and why you don’t do it. Strategy helps you identify products, services, and target markets.

It helps you establish the business model used to profitably create value.

Strategy and planning are two separate and distinct functions. Strategy is only part of the equation, it points the business in the right direction by clarifying what you want to do or accomplish. Planning is the second part. A plan says how and what you will do. Strategy combined with a plan gives the stakeholders focus. Focus leads to action and action leads to results.

Those who think govern those who labor.

Schedule some time to strategize. Think about what you want to accomplish in your personal life, your professional life, and in your organization. The ability to think clearly and strategize will set you apart from your peers, give you greater success in life, and advance your career to new levels.

Cammie Scott, President CK Harp & Associates cscott@ckharp.com www.ckharp.com

STRATEGIC PLANNING PARTNERS B US I NE S S S O LUT I O N S F O R A C H A N G I N G WO R L D • Hum a n Res o u rc e s A s s i s t a n c e • Tra i n i n g P ro g ra m s • E m p l oye e B e n e f i t Pro g ra m s • Lea d e r s h i p D eve l o p m e n t • Com p l i a n ce

2 816 N . Th o m p s o n S pr i n g dal e, A R 7 276 4 47 9 .7 5 0 .4 411 p 47 9 .7 5 0 .8 9 6 9 f www.c kh ar p.c o m

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The Dreaded 401(K) Refund:

Corrective Distributions

By KELLY S. MAJDAN

With tax season fresh on our minds, many hear the word “refund” and begin running down their imaginary wish list of ways to spend this extra money. However, when it comes to 401(k) refunds, or corrective distributions, there really is not much excitement experienced by those who receive them.

ACP TESTING ACP stands for actual contribution percentage test. It is similar to the ADP test, only it tests employer matching contributions. So, ACP only applies to companies that offer a company match. It compares the average percentage of matching contributions and after-tax employee contributions for HCEs versus NHCEs. The ACP test uses the same passing requirements as the ADP test, illustrated above. It is also possible that a plan can pass one and not the other.

Corrective distributions are a headache for plan sponsors and employees alike. Essentially, these refunds mean that your plan has failed testing, and tax-deferred money that key employees set aside for retirement must be returned to them. This is an issue for both you and your employees. In this article we will discuss what these tests are and suggest some things you can do to prevent refunds in future years.

TOP-HEAVY TEST The Top-Heavy test looks at how much HCEs contribute to the plan compared to everyone else. If HCE and Key Employee balances exceed 60% of the entire plan balance at the end of the plan year, the employer is required to make a corrective contribution that includes lost earnings to the non-key employees to be non-discriminatory. The contributions are generally about 3% of compensation.

HIGHLY COMPENSATED EMPLOYEES Your workforce is made up of two distinct employee demographics: highly compensated employees (HCEs) and non-highly compensated employees (NHCEs). An HCE is one who owns 5% or more of the company, is a direct family member of an owner, or earns more than $125,000 per year. NHCEs make up the remaining portion of your workforce.

WHAT IF A PLAN FAILS TESTING? 401(k) test failures are no fun for anyone. Swift action is required for employers and plan sponsors as refunds need to be given to the affected employees within 2 ½ months after the end of the plan year being tested (e.g. March 15th for 12/31 plan yearend). To correct plan failures, additional contributions may be required, or corrective distributions would need to be made. This means that a specified portion pre-tax savings be returned to owners and key employees in order to satisfy testing. These “refunds” will need to be included in their taxable income for the year in which the funds have been returned. Usually this is not a welcome check to be received and might come with a lot of questions. It is important to take corrective action on any plan testing failures, since failing to do so within a specified period will mean excess penalties and potential loss of tax-qualified status.

These two groups share a common goal of reaching retirement, and although HCEs may be able and willing to contribute more, your plan should be designed with both parties in mind. The IRS requires that both highly compensated plan participants and all other plan participants contribute to their 401(k) plans at similar rates.

UNDERSTANDING TESTING REQUIREMENTS If the idea of calculating and comparing percentages sends you down a path of traumatic flashbacks of math class, don’t worry. The goal here is to simplify and educate, not overwhelm. Once you have the basics down it gets easier to understand the implications of testing and what you can do to help alleviate any issues with refunds in the future.

CAN TESTING BE AVOIDED? ADP TESTING

The simple answer is yes, if the plan sponsor decides to take advantage of some plan design features that will allow a plan to automatically satisfy some of the required testing rules, which eliminate future refunds due to failed testing. A Safe Harbor Plan eliminates the need for non-discrimination testing altogether. These plans automatically pass ADP/ACP testing when certain contribution and participant notice requirements are met. To fulfill the requirements, employers must make one of the following contributions:

ADP stands for actual deferral percentage. This test compares the average salary deferral percentages of HCEs with the average salary deferral percentages of NHCEs. The ADP test applies to pre-tax and Roth elective deferrals. The purpose of this test is to ensure that all employees are benefitting from the plan. To pass ADP testing, the average contributions of HCEs must not exceed NHCE contribution by a factor of 1.25 or 2 percent as illustrated in the chart below:

Maximum Annual NHCE Contribution Rate

Maximum Annual HCE Contribution Rate

2% or less

➜ NHCE% x2

2-8%

➜ NHCE% +2

➜ NHCE% x1.25

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more than 8% www.HRProfessionalsMagazine.com

Basic Matching – The company matches 100% of all employee 401(k) contributions, up to 3% of their compensation, plus a 50% match of the next 2% of their compensation.

Enhanced Matching – The company matches at least 100% of all employee 401(k) contributions, up to 4% of their compensation (not to exceed 6% of compensation).

Non-Elective Contributions – The company can choose to make a non-elective contribution of not less than 3% of compensation to all eligible employees, regardless of whether they defer under the 401(k) arrangement. The 3% contribution must be set by the plan document and may provide that this contribution be made to only Non-Highly Compensated Employees. Utilizing the Non-Elective Contribution might be beneficial to a plan that also provides a weighted profitsharing contribution, since the 3% required contribution can be included as part of the profit-sharing calculations.

employer contributions, and all contributions are immediately vested.

Another factor to consider is distribution of employee communication.

Plan sponsors are responsible for notifying participants of their plan rights and obligations within 90 days of their plan eligibility date and 30-90 days before the start of each new plan year thereafter.

Other plan design options can also provide some help in reducing the amount of, or completely eliminating, refunds without giving up the advantages of the vesting of employer contributions. A plan may consider implementing automatic enrollment with automatic increases, look to utilize a stretch matching formula, or considered using prior year testing as a basis for testing. Each of these options come with other considerations that the plan sponsor needs to weigh based on their desired outcome for the plan participants and the employer contributions available to be made to the plan.

Qualified Automatic Contribution Arrangement or QACA Safe Harbor Match – The QACA safe harbor matching contribution formula is a 100% match on the first 1% of compensation deferred and a 50% match on deferrals between 1% and 6%;

Cabana LLC (dba “Cabana Asset Management” and “Cabana Retirement Solutions”), is an SEC registered investment adviser with offices in Fayetteville, AR, Little Rock, AR, Plano, TX, and Denver, CO. The firm only transacts business in states where it is properly registered or is exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. Additional information regarding Cabana, including its fees, can be found in Cabana’s Form ADV, Part 2. A copy of which is available upon request or online at https://www.adviserinfo.sec.gov/.

- A two-year cliff vesting schedule may be applied to QACA safe harbor contributions; and

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements and you should consult your attorney or tax advisor for guidance on your specific situation.

- Unless the participant elects otherwise, the deferral rate starts at no less than 3% and increases at least 1% annually to no less than 6% (with a maximum of 10%).

While these Safe Harbor plan design options allow owners and highly compensated employees to maximize deferrals, they do require specified

Kelly S. Majdan, AIF, QPFC, CRPS VP, Institutional Retirement Plans Cabana Retirement Solutions www.cabanaportfolio.com

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39

Marriott’s Former Health Benefits Executive Jill Berger Reflects On

How Purchasers Can Drive Value

J

ill Berger, the former VP of Benefits for Marriott International, has been managing health benefits for nearly 30 years at Fortune 500 companies including General Motors (GM) and Sears, Roebuck. She served on the boards of numerous national employer campaigns for health care quality and payment reform, including a stint as board chair of The Leapfrog Group, which she recently joined as senior advisor. Leapfrog is a national nonprofit started nearly 20 years ago by a group of large employers aiming to drive a movement for giant “leaps” forward in the quality and safety of American health care.

Employers across the country ask hospitals to voluntary submit important data to Leapfrog Hospital Survey, and then use that data to drive value.

Jill sat down with Tom Scott, Ph. D., director of the inaugural Health Plan Design and Health Informatics master’s degree program at the University of Lynchburg recently to discuss the challenges employers face today and how her new role at Leapfrog can help. Dr. Scott has a doctorate degree in quantitative analysis, is co-founder of Sonospine, LLC and spent the last six years in the health care industry. His online, one-year master’s program, which Al Lewis has deemed “unparalleled in higher education” involves a practical curriculum in which current and upcoming benefits advisors and HR directors put value-based health plan designs into practice. He believes this program will fill a void that exists in graduate education regarding value-based healthcare purchasing.

Scott: How can employers engage employees and encourage them to select safer hospitals?

Berger: Coming from a large employer, I think about employee engagement all the time. And the key to this is to make it as simple as possible. Hospitals can vary dramatically on quality and safety, even when they are in the same city. Employees need to know that they often have a choice when it comes to where to go for care.

In markets where they do not have a choice, they still need to be aware of the dangers that exist in hospitals. Even though risks exist in all hospitals, it is critically important to choose a hospital with a good track record. In addition to the publicly reported Leapfrog Hospital Survey data, employees can access Leapfrog Hospital Safety Grades. Both programs are free to consumers. The Hospital Safety Grade assigns a letter grade of A, B, C, D, or F to general acute care hospitals based on how well they protect patients from harm. Consumers can visit www.hospitalsafetygrade.org to see which hospitals near them are the safest. Leapfrog also has tools available for employers that are free to use. The Leapfrog Lives & Dollars Lost Calculator helps employers estimate the number of avoidable deaths among their covered lives as well as their annual spend due to medical errors in the hospital.

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Scott: How was The Leapfrog Group founded?

Berger: Leapfrog was started in response to a 1999 Institute of Medicine Report titled To Err is Human, which showed almost 100,000 people were dying annually of preventable medical errors in hospitals.

Large employers including Marriott, Boeing, FedEx, GM-- where I was at the time--and others wanted to find a way to ensure their employees were receiving the safest care in hospitals. Since To Err is Human was released, further studies have shown that the number of deaths due to errors is upwards of 200,000 annually. For a large employer, that could translate into one employee per month dying unnecessarily. These founding employers--or “Founding Frogs” as they proudly called themselves--recognized that addressing patient safety was an essential business need. I’m excited to be a part of The Leapfrog Group again to help employers address this ongoing challenge.

Scott: People often associate cost with quality in health care, but there is no connection between the two. How would you provide guidance to an employee or employer regarding defining value?

Berger: When I think of value, it means cost plus quality and safety. One of the programs we have at Leapfrog to help address the need for greater value in health care is the Leapfrog Value-Based Purchasing (VBP) Program which helps employers, health plans and other large purchasers find the highest value hospitals.

When mistakes happen in the hospital, employers pay the price in both lives and in dollars, but it’s not always obvious when you look at your claims.

The Leapfrog VBP Program uses data collected through the annual Leapfrog Hospital Survey which measures hospitals on safety, quality and efficiency. That data identifies hospitals that have attained top performance or made significant improvements from one year to the next. This program also provides a transparent and effective payment methodology to drive further improvement in hospitals, enabling employers to achieve the best care possible for employees.

Scott: How can employers use the Leapfrog VBP Program?

Berger: Employers can use the Leapfrog VBP Program to identify the highest value hospitals in their network, including those that have attained top performance or made significant improvement from one year to the next. Basically, it’s an expert-designed composite that allows employers to benchmark how hospitals are

doing compared to their peers. The composite is called a “Value Score” and it allows purchasers to rank hospitals and set benchmarks for financial awards or incentives, such as allocating the highest rewards to hospitals scoring in the top decile. If you are in a rural area with limited choice of hospitals, you might want to create contracting incentives for the local hospital, tying increases to the hospital’s decile ranking on the value score. The point is this makes it easier for employers to customize a program that really drives quality, without having to sift through enormous reams of data.

Scott: Do you feel confident that the data is collected accurately?

Berger: Yes, data accuracy is of upmost importance to Leapfrog and there are many ways we verify the data. First and foremost, the hospital’s CEO or their designee must complete an Affirmation of Accuracy for each section of the Survey. The Survey platform itself scans for potential data entry errors and alerts hospitals to inconsistencies prior to Survey submission. Throughout the Survey cycle, there is also a monthly data review, and Leapfrog randomly selects hospitals to submit documentation. There’s also onsite verification for a random selection of hospitals.

Scott: As bundled pricing, centers of excellence and travel medicine continue to grow, does Leapfrog envision itself getting data from outpatient and ambulatory facilities?

Berger: Yes. As a matter of fact, on April 1 we launched the inaugural Leapfrog Ambulatory Surgery Center (ASC) Survey and expect to see a good level of participation even

in our first year. We’re also starting to collect data from hospital outpatient departments. As you see more and more procedures performed in the outpatient setting, it is essential to gather this data which is not currently publicly available elsewhere. When we start reporting this data in 2020, we’re going to make it easy for consumers to compare ASCs and hospital outpatient departments side by side so that they can make an educated decision on where to receive their care.

Employers face a lot of challenges and rarely get credit for some of their truly remarkable achievements over the years. One of those achievements is creation of The Leapfrog Group. So, I’m excited to help build on that achievement and support purchaser leadership.

To learn more about the Leapfrog and the Leapfrog Value-Based Purchasing Program, as well as other tools available from Leapfrog, visit www.leapfroggroup.org. To contact Jill Berger and Dr. Scott, reach out at jberger@leapfroggroup.org and scott_tb@lynchburg.edu.

Jill Berger, Senior Advisor The Leapfrog Group jberger@leapfroggroup.org www.leapfroggroup.org

Tom Scott, Ph. D. University of Lynchburg Scott_tb@lynchburg.edu www.lynchburg.edu

One surgical site infection costs you $39,000 and you didn’t even know it.

When mistakes happen in the hospital, employers pay the price in lives and dollars. A study in JAMA found that employers paid, on average, $39,000 extra for every surgical site infection.

That’s just one example of hidden costs employers pay every day. Find out how employers are utilizing Leapfrog’s Value-Based Purchasing Program to identify the highest value hospitals.

Because unsafe care is no value at any price.

Put the Leapfrog Value-Based Purchasing Program to work for you http://www.leapfroggroup.org/VBP-Program info@leapfroggroup.org www.HRProfessionalsMagazine.com

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Reinventing JobsA 4-Step Approach for Allying Automation to Work

By WILLIAM CARMICHAEL

“If you are a leader wrestling with where, when, and how to apply automation in your organization, you’re in good company” begins Reinventing Jobs- A 4-Step Approach for Allying Automation to Work by Ravin Jesuthasan and John W. Boudreau. This innocuous opening establishes what for many is the formidable reality that work, our jobs, our way of life as we know it is constantly being reevaluated.

And like it or not, artificial intelligence (AI) is waiting in the wings. But simply asking which jobs or humans, for that matter, will be replaced by automation fails to take into account how work and automation will evolve.

This progression and its aftermath is what this excellent guide is all about.

Reinventing Jobs suggests that business leaders need a new set of tools to answer the questions that automation poses. Going beyond traditional concepts like “job,” our authors show us that regardless of industry, automation calls for a reexamination of what a job really is.

They show leaders how to determine variations of tasks within jobs and then how to reconstruct those elements into new and different combinations. They also make very clear that the ongoing debate about humans being replaced by machines is far from over. What we are left with then is the necessity for leaders to optimize what is known as human-automation combinations that are not only more efficient but generate higher returns on improved performance.

What Does the Future of Work Look Like?

Recently, an online news report detailed how a hospital utilized an automated video to give a terminal diagnosis to a patient. Even if this were true it gives us reason to pause. Simply because we have the technology to use does not mean we should use it! Here, Jesuthasan and Boudreau understand the moral and divisive elements that automation steers us into. Still, the reality is that technology and automation will not be denied. Therefore, leaders must adapt and overcome. But how?

Once the decision has been made to adopt automation and artificial intelligence technologies, leaders face difficult and persistent questions about how to implement that decision. Questions such as:

AI and Robotics Are Here. Now What?

Reinventing Jobs is not about robots or automatons or even highly functioning androids. Rather, our authors speak of automation as the pivotal future capability for leaders to “optimize human and automated work.” True, robotics does allow a reinvention of some industries but does this come at the price of human work? Case in point. Did the ATM completely remove bank tellers from the equation? The answer to this question is yes and no. As our authors describe, this ATM parable is a useful one for leaders, workers, and everyone else, “because it illustrates why the simplistic idea of technology replacing human workers is so misleading.” No one can argue that technology begets technology but it can be argued that this explosion of technology begets a zero-sum-game of sorts for every new technology requires maintaining and this takes people. More specifically, this takes dedicated skill and understanding, which we all know, still requires a human touch.

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- How, when, and where should we apply automation in our organization?

- If so, will it be a stark choice between humans vs. machines?

- How do we stay on top of these technological trends as work and automation continue to evolve?

As harmless as these questions appear, Reinventing Jobs is not for the faint of heart nor is a light read. It gets into issues like business process reengineering, identifying reskilling pathways for talent, aligning executive compensation to the new business realities, pivotal strategic goals, augmentation with cognitive automation, automation compatibility, and many more. Jesuthasan and Boudreau assert that the very nature of an organization will require rethinking, which means fundamental changes in the definition and execution of leadership. They also propose that everyone approach their own careers as a constant process of deconstruction and reinvention as advances in automation continue. I highly recommend this book for

those who are in industries already adopting technology and automation.

The biggest take-a-way for readers I believe is that AI will significantly disrupt and empower the global workforce. No it won’t happen all at once or in every industry or job but it will happen and leaders will need an automation strategy that realizes its benefits. Leaders also need a clear-eyed way to think about how these strategies will specifically affect their organization. So again, the right question isn’t which jobs are going to be replaced, but rather, what work will be redefined, and how? Reinventing Jobs gives an honest, eye-opening look at the future around us.

Structure and Layout Reinventing Jobs is structured into two main parts; Part One- Optimizing Work Automation and Part Two- Redefining the Organization, Leadership, and Workers. It is designed as a linear read that unfolds as readers make their way through it. As an example, Part One consists of a four-step process which lays out the stages for leadership to view job functions systematically. It explains how automation can or should be integrated.

Part Two comprises three components that emphasize the implications of automation upon individual jobs and the organization. It also contains groundbreaking primary research which provides enormous credibility. This is an informative and important read, and I highly recommend it.

Who Will Benefit Most from This Book?

Senior Leadership, Project Leaders, Supply Chain Management.

About the authors: Ravin Jesuthansan is Managing Director at Willis Towers Watson and a recognized global thought leader on the future of work. He is a senior member of the World Economic Forum’s Steering on Work and Employment and has been recognized as one of the 25 most influential consultants in the world. John Boudreau is Professor of Management Organization at the University of Southern California’s marshal School of Business and Research Director at the university’s Center for Effective Organizations.

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

BPJ Announces Newest Member of the Firm

Gary S. Peeples

Gary S. Peeples joined Burch, Porter & Johnson as an associate in 2014, and he concentrates his practice in labor and employment law. His labor and employment law practice includes advising employers on compliance with federal and state laws and defending employers in federal and state courts. Beyond his labor and employment law practice, Gary frequently represents businesses (as plaintiffs and defendants) in commercial litigation.

After obtaining a B.A. and an M.S. from the University of Illinois and graduating from Vanderbilt University Law School (Order of the Coif), Gary served as a law clerk to the Honorable Jon P. McCalla of the U.S. District Court for the Western District of Tennessee. He then worked as an associate in the labor and employment group at a global law firm in Chicago. Gary subsequently served as a law clerk to the Honorable Ronald Lee Gilman of the U.S. Court of Appeals for the Sixth Circuit.

Known for his excellent legal writing, Gary authored a merits-stage amicus brief in Frank v.

Gaos, which was argued before the Supreme Court of the United States in October 2018, following in the tradition of several other BPJ lawyers that have argued cases before the Court.

Gary has been active in helping non-profits in the educational setting, is an active member of the local chapter of Inn of Court and the Tennessee Bar Association, and in his free time enjoys playing basketball and reading non-fiction.

A TRADITION OF

Attorneys left to right: Lisa Krupicka, Tannera Gibson, Gary Peeples and Jennifer Hagerman

THINKING FORWARD

Being prepared for whatever comes next takes experience and vision. Our practical approach can help you stay one step ahead. Let the attorneys of Burch Porter & Johnson put our history of thinking forward to work for you.

B U R C H , P O RT E R & J O H N S O N , P L L C | 1 3 0 N O RT H C O U RT AV E N U E | M E M P H I S , T N 3 8 1 0 3 9 0 1 - 5 2 4 - 5 0 0 0 | B P J L AW. C O M

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43

Engagement as

a

Driver

of Culture

By MURRAY L. HARBER

S

Southern Farm Bureau Life Insurance Company has adopted a mission of improving employee engagement as part of its strategic vision for 2022. SFBLIC has a long history of providing a healthy and supportive workplace for its employees, agents, and business partners. In fact, they have been awarded Mississippi’s Healthiest Workplace for several years running. They have moved from a wellness approach to an overall wellbeing strategy to coincide with its engagement metric.

Employee engagement is a key lever to any business/organizational performance.

It has been defined as the emotional commitment of the employee to its employer and the goals of the organization. Research shows that when employees are not engaged their quality and quantity of work is reduced. Companies all across the globe have been working to improve employee engagement as employees are the key to making a business operate. As HR Professionals, employee engagement has been our business or a long time where in the past we have been seen as the “police” of the organization, however the tide is turning towards facilitating talent development of individuals and teams.

The Gallup Experience The strategic visioning team at SFBLI selected the Gallup organization’s approach to employee engagement. Various SFBLI team members attended Gallup training and workshops to learn more about the evaluation process and training systems.

SFBLI launched the initiative in 2017 where they began with employee surveys which reflected an overall engagement score of 55% compared to the national average of 33%. They set a goal of reaching 65% engagement by 2022. At the end of 2018, the survey results reflected an improvement to 74% where the national average was 34%, a drastic improvement. The aim now is to sustain and/ or continue these improvements.

The Gallup survey includes twelve questions which measures a variety of employees views of supervisor and organizational supports, recognition and growth opportunities, along with their commitment to the organizational mission. The Gallup organization has many resources for employers and organization who strive to learn more and improve the employee engagement and wellbeing of their workforce.

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Talent Development and Management Employee training and development has been a cornerstone in SFBLIC’s efforts to build and evolve their workforce and improve operational efficiencies. They have a culture which supports learning at all levels of the organization. Training supervisors and managers on how to promote and support employees health and wellbeing has been successful and this approach was expanded to employee engagement. Management can be either a barrier or facilitator in creating a supportive workplace climate and culture. The connection of work productivity and satisfaction is linked to the relationship an employee has with their supervisor which is why more employers are moving toward employee engagement efforts.

At the core of the Gallup process is identifying and training on an strength-based approach for employees, managers, and culture. SFBLIC has given tools and empowered its supervisors and managers to improve their own team scores by understanding the various strengths of their team members and finding opportunities for improvement.

These efforts has helped with personal performance and team cohesion throughout the organization. The culture continues to evolve in a positive direction especially with the addition of the younger generation with the older generations where work styles and expectations often conflict in the workplace.

“ Our efforts in employee engagement has shown improvement with our efforts in improving engagement and performance at all levels. We have integrated our approach over the past few years where we have a coordinated effort in internal communication, events & activities, and resources at SFBLIC. Our approach has been focused on training employees, superiors,

managers, and leaders of the company on the importance and value of being engaged at work and how it carries over into our non-work life.

An employee who is truly engaged in and committed to their work on a daily basis creates an awesome culture where everyone feels valued and appreciated for the work they are doing.”

MATT GINN, Manager, Corporate Communications, Training, and Health Promotion

Human Capital The Human Resources team has worked to build incentives in many areas to engage and support the human capitol within the organization. Historically, they have provided a great compensation package including salary, benefits, and years of service rewards. SFBLIC also offers a variety of internal supports including a subsidized onsite cafeteria, a free onsite clinic for health plan participants, and a LifeFit room which offers onsite fitness opportunities. SFBLIC health plan participants also have access to a voluntary health plan premium reduction offering for completing a series of steps. They are working to maximize their human capital by leveraging their onsite resources, sustaining a learning community, and supporting with team engagement budgets.

Attracting, engaging, developing, and retaining employees has and is a focus for SFBLIC. The employee engagement efforts build trust, efficiency of work which optimizes the performance of the workforce. Last year they created a new engagement policy and budget for departments which includes a $150 per person per year allocation. These funds can be used for a variety of activities including team meals, celebrations, flowers, gifts, and team building events. For example,

some departments have attended team building events at a local cooking school which allows team members to work together in creating a variety of food items. Other departments take their teams to lunch at local restaurants or bring in catering for team celebrations.

“ Employee engagement is an area which we are focused as part of our overall Human Capitol strategy. We want our employees engaged as it makes for a healthier, happier, and long-term stable workforce.”

JOYCE PLUNKETT, Vice President, Human Resources

Employee engagement is a term often thrown around, but SFBLIC is applying all the necessary components to maximize engagement of its human capitol. HR Professionals should learn from them and other great employer examples on how to implement with their own workforce.

Murray L. Harber, Executive Director Mississippi Business Group on Health mharber@msbgh.org www.msbgh.org

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employment that any employee or person seeking employment waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit to which the employee or person seeking employment would otherwise be entitled under any provision of the Kentucky Revised Statutes or any federal law.

Arbitration as a Condition of Employment in Kentucky

By JAY INMAN

The Kentucky Supreme Court’s September 27, 2018, decision in Northern Kentucky Area Development District v. Snyder, Case No. 2017SC-00277, has sparked considerable discussion about the Commonwealth’s stance towards arbitration as a condition of employment. As this article sets out, arbitration remains a strong and productive choice for employers in Kentucky.

The Snyder Decision Danielle Snyder worked for the Development District (NKADD), a government entity providing social programs to eight counties in Northern Kentucky, as an administrative purchasing agent. As a condition of her employment, she signed an agreement requiring arbitration of any employment dispute with NKADD. The agreement specifically stated, in bold type: “By accepting employment with the District, you will have accepted this Agreement under the Federal Arbitration Act, and it will be binding on claims relating to your employment.”

After NKADD terminated Ms. Snyder’s employment, she filed a whistleblower and wage and hour lawsuit in Boone Circuit Court.

NKADD moved to stay the proceedings and compel arbitration, which the court denied.

On appeal, the Kentucky Court of Appeals affirmed denial of the motion, concluding that NKADD never had authority to enter into the arbitration agreement. As to the FAA, the court of determined: “federal law does not preempt the authority of the Commonwealth to deny the authority of its [agencies] to enter into arbitration agreements.”

The Kentucky Supreme Court granted discretionary review to consider whether the FAA preempts KRS § 336.700(2), which reads: Notwithstanding any provision of the Kentucky Revised Statutes to the contrary, no employer shall require as a condition or precondition of 46

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The court first determined that the NKADD, as a state-created entity, acted beyond its authority in requiring an employee to arbitrate employment disputes as a condition of employment. Following that conclusion, the court considered “if the FAA nullifies this conclusion because of its preemptive effect on laws discriminating against arbitration.”

As to FAA preemption, the Kentucky Supreme Court turned to the United States Supreme Court’s decision in Kindred Nursing Centers Ltd. Partnership v. Clark and quoted the preemptive scope as follows: “The FAA thus preempts any state rule discriminating on its face against arbitration . . . And not only that: The Act also displaces any rule that covertly accomplishes the same objective by disfavoring contracts that (oh so coincidentally) have the defining features of arbitration agreements.”

The court determined that, under this standard, FAA preemption would not apply because KRS § 336.070(2) “does not actually attack, single out, or specifically discriminate against arbitration agreements.” That is, according to the court, because the statute applies more generally to bar conditioning employment on waiving, arbitrating, or diminishing any employment rights, FAA preemption is not implicated.

In reaching this decision, the Kentucky Supreme Court noted that employees and employers may continue voluntarily to enter into arbitration agreements that do not constitute conditions of employment.

Post-Snyder Debate and Actions The Kentucky Supreme Court utilized broad language, but placed its analysis in a narrow context that the FAA “does not mandate a contrary holding” than that Kentucky state agencies cannot condition employment on waiving, arbitrating, or diminishing employment rights. As a result, different constituencies have read, and championed, the decision, differently, as their needs and preferences require.

Post-Snyder arguments often fail to understand the status of the matter: • Snyder is not a final decision yet. NKADD filed a timely petition for rehearing, which has

now been fully briefed and stands ready for decision. The Supreme Court sent the briefing out for assignment on November 7, 2018, so a decision may come at any time.

•E ven if the Kentucky Supreme Court declines to rehear the case or amend its decision, NKADD has the opportunity to petition the United States Supreme Court to hear the matter. It is not a stretch that such a petition will be successful. Just a year prior, the United States Supreme Court granted a petition to review a Kentucky arbitration decision referenced above in Kindred Nursing Centers Ltd. Partnership v. Clark, vacated the Kentucky Supreme Court’s opinion, and remanded for entry of a new decision.

Importantly, the Kentucky legislature has begun work on a bill to address the issue. On February 14, 2019, Senate President Robert Stivers introduced Senate Bill 7, which makes plain that all employers may require arbitration as a condition of employment. After favorable reports from committees, the Bill passed the Senate on February 21, 2019, by a vote of 2610 and has been received in the House, where committees have reported favorably and a vote is anticipated any time. If the Bill reaches his desk, Governor Bevin is expected to sign it into law.

Even if nothing changes, Snyder should be read appropriately as restricting government agencies, not far beyond its scope to impact private employers as well. The notion that the Kentucky Supreme Court intended its decision about the arbitration provision of a government employer to contradict years of established precedent from the United States Supreme Court permitting private employers to require arbitration makes little sense.

Conclusion The Kentucky Supreme Court’s Snyder decision prompted a productive debate about arbitration in the workplace and compelled action by Kentucky legislators, as well as continued action

by NKADD and potential amici. While warning signals reasonably sounded at first, employers should take the long view, which reflects longstanding judicial and legislative endorsement of arbitration in Kentucky and, of course, well beyond. Arbitration continues to be a sound, effective choice for Kentucky employers.

Jay Inman is a shareholder in Littler Mendelson’s Lexington, Kentucky, office, where he frequently provides solutions for clients pertaining to the drafting and enforcement of arbitration agreements.

It’s a Labor of Love | Littler Lawyers Answer Your Most Burning Labor and Employment Questions Littler Memphis Office February 21, 2019 Speakers were Tanja L. Thompson, Memphis Office Managing Shareholder & Co-Chair, Traditional Labor Practice Group; and Matthew G. Gallagher, Associate, also from the Memphis office.

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US DOL Releases Proposed Overtime Rule 2.0

By MARTY HELLER

We have waited years to see where the U.S. Department of Labor would land with its much anticipated revised “overtime rule”—late yesterday, the agency delivered. The USDOL released its long-awaited proposed rule which, if adopted, would set the minimum salary threshold at $679 per week, annualizing to $35,308 per year. For now, the proposed rule does not include an automatic update provision (which many were concerned would simply serve to periodically inflate the threshold level), nor does it revise the duties test that accompanies the rule.

Once published in the Federal Register, the public will have 60 days to submit comments regarding, among other things, the proposed minimum salary threshold. What do you need to know about this breaking news?

Executive Summary: Proposed Rule in a Nutshell • The proposed minimum salary threshold would be raised from $455 to $679 per week ($35,308 per year, annualized).

• The proposed rule provides for one threshold regardless of exemption, industry, or locality, subject to a few exceptions that already exist.

• The additional total annual compensation requirement for the highly compensated employee exemption has a proposed entry level of $147,414 per year.

• No changes were proposed to the duties tests for the exemptions.

• No “automatic” updates were proposed.

• The unnecessary 90/10 approach with respect to certain non-discretionary pay has been teed up again.

Brief History of Overtime Rule Saga It seems like an eternity ago, but in May 2016, the USDOL (then a part of the Obama administration) released finalized rules that were designed to radically alter the federal compensation rules. The biggest changes in store for employers: the minimum salary threshold would be increasing to $913 per week (which would have annualized to $47,476, more than double the existing $23,660 annual threshold), and the amount would be “updated” every three years (meaning that it will likely increase with each “update”). The new minimum threshold was set to become effective on December 1, 2016, and the “updating” would begin on January 1, 2020.

But in a dramatic last-minute development, a federal judge in Texas blocked the overtime rule from taking effect just days before the December 1, 2016 implementation date, 48

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handing an eleventh-hour victory to employers across the country. Agreeing with arguments posed by concerned states and business groups, the judge issued a preliminary injunction preventing the rules from being implemented on a nationwide basis.

After Donald Trump was inaugurated and Alexander Acosta installed as head of the USDOL, the new USDOL leadership indicated that it would no longer advocate for the $913 per week proposal but would instead undertake further rulemaking to determine what the salary level should be. After the Texas court put the final nail in Overtime Rule 1.0’s coffin in August 2017 by striking down the rule once and for all, employers have been patiently awaiting a revised rule.

Will This Proposal Be the End of The Story?

It depends. The new proposal skirts some of the more problematic areas. The $679 per week threshold is in the ballpark of what everyone has been expected—and sounds a lot better to employers than $913. And while the proposal contains some of the same flaws as Overtime Rule 1.0, they generally are not the same kinds of concerns raised in lawsuits attacking the first proposal (at least with respect to private employers). And although several legal analysts have stated they expect litigation based on the lower figure, the basis for such anticipated litigation is unclear given that (1) the salary alone does not make someone exempt and (2) if a salary-basis requirement exists, it should be low enough (possibly lower) to prevent its overshadowing the duties tests.

Keeping Things in Perspective: This is A Notice of Proposed Rulemaking If we’ve learned anything from the saga that accompanied the release and subsequent controversy over Overtime Rule 1.0, it’s that this is a process. Many twists and turns might occur before this proposed rule is finalized. Do not run out tomorrow and make changes to your compensation structure based on what is simply a proposal. Instead, use this time to start evaluating what 2020 might look like for your compensation system if the USDOL’s proposal comes to fruition in its current form.

You’ve Been Through This Before Some employers conservatively made changes in 2016 in anticipation of the $913 per week threshold. If you fall in this camp, you are certainly ahead of the curve—especially because the final rule could set a minimum

threshold higher than $679 per week. Many other employers still have a leg up in that they undertook detailed analyses of their exemptclassified employees in 2016. If you did so, not only can you just tweak their review strategy, in many cases you will simply be confirming your prior findings when adopting the finalized changes.

Assume the Final Rule Will Come Sooner Rather than Later As recounted above, Overtime Rule 1.0 was a painfully long process for employers as they waited to see whether the final rule would be significantly different from the proposal in some way. Thankfully, there appears to be no hint of duties-changes being on the table with Overtime Rule 2.0. Moreover, although the USDOL will likely analyze the salary threshold on a more frequent basis going forward, we do not expect some form of the troublesome automatic “updates” to pop up in the final rule.

These distinctions should narrow the scope of the comments submitted by the general public, which should make the review period easier than previous efforts. Moreover, the USDOL should not need as much time to review the comments because they should be fairly similar to those filed in 2015, 2017, and shared in 2018 by Fisher Phillips and numerous others. And while some employers and other concerned entities might want more time to react to this latest proposal, the sooner we get the final rule, the less muddled any opposing efforts (such as last-minute legislative attempts or lawsuits) should be—especially in today’s contentious political atmosphere.

The Bottom Line While the proposed changes are just about what most have expected, thankfully the USDOL has had the sense to recognize that one threshold is sufficient to address its goals. The movement away from the improper “automatic” updates approach in Overtime Rule 2.0 is a welcome development.

Nonetheless, employers in certain localities or industries might contemplate submitting comments regarding the proposal, and you should coordinate with your Fisher Phillips attorney if you want to take this path.

Reprinted with permission from Fisher Phillips

Marty Heller, Attorney Fisher Phillips Atlanta Office mheller@fisherphillips.com www.fisherphillips.com

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Highlights from the 2019 SHRM-Memphis HR Excellence Awards at the Memphis Hilton

February 26, 2019

George Mabon HR Executive of the Year

Randy Lyles

Kathy Tuberville

National Guard Products, Inc.

Dr. Inetta F. Rogers

University of Memphis

Emerging Leader

Tamika Cole-Peck

Memphis Inter-Denominational Fellowship, Inc. (Recipient)

Kelly King

First Tennessee Bank

Tyler Stegall

Semmes-Murphy Clinic

Memphis HR Champion

Tori Black

Jason Hernandez

FedEx Services

FedEx Freight

HR Student of the Year

Jeff Weintraub Fisher Phillips

City of Memphis (Recipient)

Angela Moss

First Tennessee Bank (Recipient)

Lifetime Achievement Award Most Admired Organization in HR Adams Keegan, Inc. City of Memphis Guard National Products, Inc. University of Memphis-Fogelman College of Business and Economics First Tennessee Bank

Rebeca Velazquez

Stephanie Hendrix

Christian Brothers University University of Memphis (Recipient)

Cynthia Y. Thompson

HR Professionals Magazine (Recipient)

(Recipient)

Deneen Lester, HR Manager of the Salvation Army Kroc Center, was the emcee for the event.

Verlinda Henning, President of SHRM-Memphis, welcomes members and guests.

Lauren Price, daughter of the late John Daniel, CHRO of First George Mabon, presented the Horizon Corporation, was the keynote speaker. His topic was an George Mabon HR Executive of the Year Award. “Emerging Model of Leadership.�

David Estel, Strategic Alliance Manager with Data Facts, Inc. and John Daniel, CHRO of First Horizon.

Dr. Inetta Rogers, recipient of the George Mabon HR Executive of the Year Award, with the family of the late George Mabon.

Dr. Kurt Kraiger, Management Department Chair, at kurt.kraiger@memphis.edu.

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Did Trump Properties Knowingly Employ Undocumented Workers?

By BRUCE E. BUCHANAN

O

ver the past few months, Trump National Golf Clubs in Westchester, N.Y., Bedminster, N.J., Pine Hill, N.J., Montrose, N.J., and Hopewell Junction, N.Y. have been in the news for employing undocumented workers and thereafter terminating the workers after press coverage revealed their unauthorized employment. As an immigration compliance attorney, my first question is whether Trump properties knew or should have known (constructive knowledge) of their unauthorized work status.

Legal Standard Why does it make a difference whether Trump properties knew or should have known of the employees’ undocumented status? Because under the Immigration Reform and Control Act (IRCA), it is a violation to knowingly hire and/or employ undocumented workers.

If an employer unknowingly employs undocumented workers and terminates them upon receiving knowledge of their unauthorized status, it has not violated IRCA unless it decides to retain them after acquiring knowledge.

“ 52

Termination of Undocumented Employees Now back to the saga of Trump National Golf Clubs and its undocumented workers. Between December and February 2019, Trump National Golf Clubs fired over 20 undocumented workers. The terminations at the five Trump golf clubs appear to be as a result of internal I-9 audits that the Trump Organization is conducting at its properties across the country. Trump Organization, through Eric Trump, executive vice president of the Trump Organization, stated "We have tens of thousands of employees across our properties and have very strict hiring practices. If any employee submitted false documentation in an attempt to circumvent the law, they will be terminated immediately. We take this issue very seriously.”

One former employee, Victorina Morales, a housekeeper at Trump National Golf Club in Bedminster, began employment in 2013.

According to Morales, the club managers helped her obtain fake documents, including taking her photo for the documents in the laundry room. In December 2018, she discussed her undocumented status and abuse by her supervisor with the New York Times. Thereafter, she was terminated due to her undocumented status.

We have tens of thousands of employees across our properties and have very strict hiring practices. If any employee submitted false documentation in an attempt to circumvent the law, they will be terminated immediately. We take this issue very seriously.”

www.HRProfessionalsMagazine.com

Another former employee, Victor Reyes, a cook at the Pine Hill golf club, told the New York Times: “The manager called me and asked, ‘Victor, are you legal?’ I said, ‘No, I am not legal.’ It surprised me because I knew he knew that I was illegal. I have worked for him 16 years and then he asks me.” After Reyes’ admission, he and other workers were told their documents did not pass inspection after an internal I-9 audit and fired.

It should be noted the Trump golf club’s method, as described by Reyes, is not the proper way to conduct an internal I-9 audit. The best method is to first examine the documentation on file with the I-9 form, if the employer retained the documentation. If it appears to be fraudulent, an employee should be so notified and given the opportunity to present document(s) from the I-9 Lists of Acceptable Documents. If the employee cannot provide documentation to prove work authorization, the employee should then be discharged.

At the Westminster golf club, Margarita Cruz, an eight-year employee, tape-recorded her termination meeting with Deidre Rosen of the Trump Organization. Rosen read a prepared statement, which said the club had conducted an internal I-9 audit (or “interim” I-9 audit, as she stated), and concluded Ms. Cruz’s documents were fraudulent and she was terminated. Ms. Cruz was shocked because the Club knew her Social Security card, presented at hiring, was fake but took no action until press coverage.

What will happen to these terminated employees? They are subject to being detained by Immigration & Customs Enforcement (ICE) and placed into deportation proceedings. However, one immigration lawyer is trying to stop that.

David Leopold, an immigration lawyer at Ulmer & Berne, stated "If the terminated undocumented workers get removed from the U.S., that is obstruction of justice because these are witnesses and that's what we're talking about on Capitol Hill.” Several terminated undocumented workers met with Senators Cory Booker and Robert Menendez of New Jersey and several Congressmen about their plight.

They requested a congressional investigation into Trump Organization’s hiring practices and to be shielded from deportation. Leopold said as victims of federal crimes and/or material witnesses, the terminated workers are eligible for “continuous presence” to remain in the U.S. and long-term immigration relief, including T visa, U visa, or Deferred Action. Thus, they should not be deported.

Will tell as to whether the government seeks to take action against the Trump clubs.

Bruce E. Buchanan, Attorney Siskind Susser PC bbuchanan@visalaw.com www.visalaw.com

Analysis Based upon these stories, one may ask if Trump properties knowingly employed undocumented workers. As for Cruz, just because she gave the Trump club a fake Social Security card does not mean the club knew or should have known she was undocumented. The test is whether the document appears genuine and relates to that individual.

But Cruz says the club was aware of the fake documents. If they were, the Trump golf club knowingly employed her as undocumented.

However, if the club was not aware of the fake documentation, it appears the Trump club did not knowingly employee Cruz as an undocumented worker.

For those not involved in immigration compliance, you may think a fake document is easy to spot and employers know when they are accepting fake documents. False! I can easily spot a fake green card because I’m an immigration attorney who conducts many internal I-9 audits. However, most of my clients are not able to spot fake green cards because the green cards appear genuine. And remember that’s the test that an employer must use.

In the case of Morales, the Trump club knew of her undocumented status, if she is credited. Morales said club managers even helped her obtain fake documents. Thus, the club was aware of her undocumented status and it knowingly employed an undocumented worker.

The company and its club managers may be charged with violating the federal criminal conspiracy law concerning its employment of illegal aliens.

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As for Reyes, if his story is correct, the Trump club knowingly hired and employed an undocumented worker but it is unlikely any criminal law was broken. www.HRProfessionalsMagazine.com

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7 Reasons Leaders Should Boost Their Emotional Intelligence

By HARVEY DEUTSCHENDORF

It has been frequently said that people don’t leave their jobs, they leave their bosses. Years ago, people were promoted based on their knowledge and skills with little thought given to their ability to develop strong relationships with others in order to work effectively with them.

Whether you call them people skills, soft skills, emotional intelligence, the ability to communicate with, motivate and get the best from others around them has become a skill set that is increasingly being sought out for people who are in leadership positions. Hiring and developing this in leaders is crucial to the long-term success of any organization.

Here are 7 reasons for leaders to boost their emotional intelligence:

Increases Self-awareness Being aware of our emotions, how they affect us and how we come across to others is crucial to building any healthy relationship. Strong leaders will continue to develop themselves, be open to feedback and can be vulnerable when it is called for. This increases their ability to connect with others, build trust and get the most from others around them.

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Build Effective Relationships With Others One of the most common reasons cited for why people leave their jobs is that they feel unappreciated. Personal bias, inflated egos and selffocus are areas that the most successful leaders work hard to overcome.

Instead of taking things personally, emotionally intelligent leaders are able to see things from other’s perspective, allowing them to build the type of relationships that make people feel valued and appreciated.

Increases Communication and Listening Skills Many people complain that they are not heard and listened to in their workplace. Feeling like we are being heard is critical to building strong working relationships with others. It is at the heart of our need to be valued and appreciated. In most conversations, the person listening is thinking of a response instead of really trying to understand where the other person is coming from. Strong leaders develop the ability to listen to those around them and let them know that they have been heard. While they may not agree with a colleague or employee, making them feel they have been heard lets them know their opinions and ideas are valued and appreciated. When speaking with others, leaders with high EI are aware of the impact of their words, tone of voice and body language on them.

Increased Empathy The ability to understand and feel where others are coming from is one of the most important leadership skills. In every workplace people are constantly challenged by highly stressful situations both at work and outside. Death, illness in the family, divorce and relationship breakups and many other events have major impacts on our ability to function at work. Leaders strong in empathy are able to recognize and effectively navigate these situations that call for both caring for and supporting their people while at the same time ensuring that disruption at the organization is minimized. During difficult times, having strong empathic leaders can make the difference between a valued employee bonding more closely with the organization, or deciding that it is time to move on.

Builds Teamwork and Cooperation Strong leaders act as lubricants to smooth out and overcome the inevitable conflict, strife and resistance that happens when a group of people have to work together towards a common goal. They look for opportunities to encourage and praise others in the organization for their successes.

Even more importantly than how they react when things are going well, is how leaders respond when they aren’t. When things don’t work out as planned, leaders high in EI look for solutions and lessons that can

be learned instead of apportioning blame.

“Excellent leaders promote collaboration rather than unhealthy competition” says Judy Bell, President of Judy Bell Consulting. http://judybellconsulting.com/ Collaboration and brainstorming as a team bring healthy solutions to problems and hurdles.

“ Excellent leaders promote collaboration rather than unhealthy competition” says Judy Bell, President of Judy Bell Consulting. http://judybellconsulting.com/

odels Healthy M Emotional Management Leaders who are able to manage their emotions, set an example for the organization for what is appropriate, healthy and positive for the organization. Dr. Kathleen E. Allen, author of “Leading from the Roots” https://www.amazon. com/Kathleen-E.-Allen/e/B001K7VSPI, states “When a leader or an employee is not aware of their emotions and how they shape their behavior, they often behave in ways that drains the energy of others and wastes organizational time.” Leaders high in EI’s ability to connect and build positive relationships, will set a standard for others in their organization to emulate and work towards. This builds trust and creates a positive image of the company as a great place to work.

Articulates a Shared Vision for the Organization A healthy workplace spends less time and energy on conflict, backstabbing and destructive politics, which frees up time and energy that can be used to work towards shared goals.

Leaders who are able to articulate a vision that is shared by everyone will be spend more time on the work needed to grow the organization, rather than continuously putting out fires caused by infighting and disruption. When everyone is driven by a common shared cause, there is no need for micromanagement and close supervision. Employees will feel empowered to use their talents and gifts towards the united goal. “This is such an excellent point,” states Bell. "Infighting is such a waste of time and energy. This energy could be better used in actual productive ways to become better and stronger than the outside competition."

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.

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.

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