August 2016 isue

Volume 6 : Issue 8 TM

www.HRProfessionalsMagazine.com

Retirement Planning and Compliance

NLRB

Reinstates Liberal Standard

for Unionizing Temp Workers

Does Your

Investment Advisor

Measure Up?

Guide to

Top Investment Advisors and TPAs 2016

KYSHRM Conference in Louisville

Aug. 30 - Sept. 1

Scott

McGarvey,

SHRM-SCP, SPHR Chair-Elect

KYSHRM

ERISA Lessons

Learned from Tibble v. Edison

JUST PUT IT ON THE COMPANY CARD…NOBODY WILL NOTICE.

YOU’RE REALLY SHOWING OFF YOUR BEST ASSETS TODAY.

THEY’RE WORRIED ABOUT OVERTIME. I’M JUST WORKING OFF THE CLOCK.

I NEVER WEAR THE SAFETY GOGGLES. THEY LEAVE A MARK.

What you don’t hear can still hurt you.

The things employees say when you’re not around can cause legal troubles for you. Fisher Phillips provides practical solutions to workplace legal problems. This includes helping you find and fix these kinds of employee issues before they make their way from the water cooler to the courthouse.

1715 Aaron Brenner Drive • Suite 312 • Memphis, TN 38120 • 901.526.0431

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ORLANDO PHILADELPHIA PHOENIX PORTLAND SACRAMENTO SAN ANTONIO SAN DIEGO

SAN FRANCISCO SEATTLE TAMPA WASHINGTON, D.C.

Preview HR PROFESSIONALS Quarterly Seminars SAVE THE DATE

HR COMPENSATION FORUM What you really need to know to position yourself as Strategic HR Leader for your organization.

THIS FORUM IS IN PARTNERSHIP WITH SHRM-MEMPHIS

RON REYNOLDS,

CCP, VP Advisor, Lockton Companies

PRESENTING SPONSOR

JEFF WEINTRAUB,

Regional Managing Partner Fisher Phillips BREAKFAST SPONSOR

FRANK WEIGHTMAN, • SHORT AND LONG TERM INCENTIVE PRACTICES

Accredited Investment Fiduciary, Radian Partners

• DOL PROPOSED CHANGES TO OVERTIME REGULATIONS • HOW TO PREPARE FOR THE NEW EEO-1 PAY DATA REQUIREMENT • NLRB JOINT EMPLOYER ISSUES • NEW DOL FIDUCIARY RULE

MICHELLE HIGH,

Partner, Wyatt, Tarrant & Combs LLP

• PENSION PROTECTION ACT OF 2006 • REINVENTING PERFORMANCE MANAGEMENT

Join us on Tuesday, August 16 at

CYNTHIA Y. THOMPSON,

Principal and Founder of The Thompson HR Firm, LLC, and Publisher | Editor of HR Professionals Magazine

The Crescent Club Memphis

7:30 AM to 5:30 PM

TO REGISTER, GO TO SHRM-MEMPHIS.ORG COST: $98. PRE-REGISTRATION IS REQUIRED.

Breakfast and lunch included.

Wine and cheese reception at 4:30 Meet the speakers and get answers to your questions.

PRE-APPROVED FOR 7.00 SHRM AND HRCI RECERTIFICATION CREDITS

Presents

Online HRCI PHR | SPHR Certification Prep Class Online classes begin August 18 and will meet twice per week for 12 weeks on Monday and Thursday evenings from 6:00 PM to 7:30 PM.

HRCP 2016 Study Materials included: • Six Study Guides • Online practice exams for each Study Guide • 100s of Flashcards • HRCP materials that are among the most effective study guides available and are easy to read and understand The total cost of the HRCI PHR | SPHR Certification Prep Class is $900 You may pay by PayPal, credit card or check.

Money-Back Guarantee If you fail the exam, we will refund the cost of your study materials if you meet these two requirements: – Attend 80% of the scheduled online classes –S core 80% on all 14 HRCP practice quizzes during the program

Deadline to register is August 11 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, a human resources consulting company in Memphis. She is a senior human resources executive with more than twenty years of human resources experience concentrated in publicly traded companies. She is the Editor | Publisher of HR Professionals Magazine, an HR publication distributed to HR professionals in Tennessee, Mississippi, Arkansas, Kentucky and Georgia.

Cynthia has an MBA and is certified as a Senior Professional in Human Resources (SPHR) by the Human Resource Certification Institute and is also certified as a Senior Certified Professional by the Society for Human Resource Management. She is a faculty member at Christian Brothers University, Bethel University, and the University of Arkansas Global Campus.

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www.HRProfessionalsMagazine.com

Bringing Human Resources & Management Expertise to You

80% of employees

participate in group life insurance offered by their employer www.HRProfessionalsMagazine.com Editor

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

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

Park Avenue Design Contributing Writers

Bruce E. Buchanan Dale Conder, Jr. Harvey Deutschendorf Ed Fensholt Paula Hayes Jimmy Hinton Robbin Hutton Michelle Kaemmerling Jay Kiesewetter Lisa Krupicka Chris Menard Kerstin Nemac Tim Norwood Ricky Reynolds Blake Rogers Stephen D. Stamps Stacey L. Stewart Jennifer Taylor Board of Advisors

Austin Baker Jonathan C. Hancock Ross Harris Diane M. Heyman, SPHR John E. Megley III, PhD 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. ©2016 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.

See Page 35 for 2016 KYSHRM Conference Schedule

Features

5 note from the editor 7 Profile: Scott McGarvey, SHRM-SCP, SPHR, Chair-Elect KYSHRM 8 Highlights from the 2016 SHRM Annual Conference & Exposition 10 SHRM Foundation Releases Report on Increased Use of Workforce Analytics 11 SHRM Research Report on The New Talent Landscape 28 Is the New Gig Economy Opening Your Company Up to Risk?

30 Guide to Top Investment Advisors and TPAs 40 7 Things to Do When You Feel Overwhelmed at Work 42 Book Look: The HR Lawyer Within You

WEB EXCLUSIVES HTTP://HRProfessionalsMagazine.com /Exclusive

Employee Benefits

14 Marketplace Notices and Appeals: What, Why, When, and How? 16 State Sponsored Health Insurance Plans – A Change Worth Pursuing 24 Health and Welfare Plan Nondiscrimination Testing – Do Your Plans Comply?

32 Does Your Investment Advisor Measure Up? 36 ERISA Lessons Learned from Tibble v. Edison 38 Whole Life Offers a Whole Lot More

Employment Law

Next Issue

Emphasis on Payroll and Technology Preview of 2016 WAHRA Leadership Conference

12 More Bad News from the NLRB for Non-Union Employers Who Have Temps in Their Workplace 20 Firearms in the Workplace (Arkansas, Kentucky, Mississippi and Tennessee) 22 Managing Employee Absences in a Regulatory Thicket 26 Strategies for Effective (and Legal!) Succession Planning 44 Macy’s Among Three Employers Charged With Discriminating Against Work-Authorized Non-U.S. Citizens

Industry News

3 SHRM-Memphis HR Compensation Forum August 16 4 PHR | SPHR HRCI Certification Exam Prep Classes Begin August 16 13 Fisher Phillips and Greater Memphis Chamber Breakfast Series Seminar August 25 16 2016 TNSHRM State Conference in Memphis September 14-16 17 2016 SHRMGA Conference in August September 18-20 19 Wimberly Lawson 37th Annual Labor Relations & Employment Law Update Conference in Knoxville November 3-4 21 Talent Reality Workshop in Memphis August 30 21 EVOLVE – Ultimate Software HR Intensive Conference in Tulsa September 1 27 2016 ARSHRM Employment Law and Legislative Conference in Little Rock September 15-16 29 2016 GMEBC Board of Directors 45 MSCA Annual Total Rewards Seminar in Memphis August 18 46 2016 TSHHRA Annual State Conference in Brentwood August 25 www.HRProfessionalsMagazine.com

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a note from the Editor I am presenting “Financial Intelligence for HR Professionals” on August 30 from 12:30 - 2 PM. You will receive 1.5 HRCI business credits and SHRM PDCs for attending my session. Come by and see us at the KYSHRM State Council booth during the Conference!

(L-R) Tisch McDaniel, 2016-2017 SHRM-Memphis President, with Shelly Trent, SHRM Director of Field Services. Shelly was the speaker at the SHRM-Memphis July meeting. Her topic was “Workflex.”

I am so excited about this issue!

Our emphasis is on retirement planning and compliance. For many HR professionals this HR function is often challenging. You may partner with a third party administrator who advises and assists with compliance issues.

We have several informative articles to help you in your role as plan fiduciary. Be sure to catch Stephen Stamps excellent article, “Does Your Investment Advisor Measure Up?” Dale Conder, Jr. has provided a very timely analysis of the role of the fiduciary under ERISA in, “ERISA Lessons Learned from Tibble v. Edison.” The tax code requires nondiscrimination testing of both retirement plans and health and welfare plans. Stacey L. Stewart explains in her article, “Health and Welfare Plan Nondiscrimination Testing – Do Your Plans Comply?”

Fall is just around the corner and with it comes the SHRM State Conferences for Kentucky, Tennessee, and Georgia.

We are honored to be the official media sponsor for each of these conferences. We will kick off the fall season with the 32nd Annual KYSHRM Conference in Louisville August 30-September 1.

It’s going to be a busy September starting with the TNSHRM Conference in Memphis September 14-16. SHRM-Memphis, my home Chapter, is hosting the Conference this year. You will love the social event planned at the World’s Largest Bass Pro Shop at the Pyramid in historic Downtown Memphis! Early bird registration expires August 31st. The ARSHRM Employment Law and Legislative Conference in Little Rock is September 15-16. This is one of my all-time favorite conferences because you have the opportunity to hear some of Arkansas’ finest state legislators speak in addition to the excellent employment law attorneys in the state. We will end September with a bang in Augusta at the SHRMGA State Conference September 18-20. The theme is HR and Business Superheroes Unite. Looking forward to seeing SHRM VP of Government Affairs, Mike Aitken, at the Conference as he is a keynote speaker. Early Bird Registration ends August 31.

We are partnering with SHRM-Memphis for our next Strategic Leadership for HR Executives event, which will be an HR Compensation Forum at the Crescent Club on August 16. You will receive 7.00 HRCI and PDC credits.

Register online at shrm-mempis.org. Have you always wanted to be a PHR or SPHR? Now is your chance! We are offering our Online HRCI Certification Exam Prep Class beginning August 18. Registration ends August 11. Visit our website at www.hrprofessionalsmagazine.com to register. Our monthly complimentary webinar will be on August 21st. Mark you calendar and plan to attend! You will receive HRCI and SHRM credit. Watch your email for your invitation.

Happy conferencing!

Cynthia@hrprosmagazine.com Twitter @cythomps

Sign up for our RSS News Feed to receive up to the minute HR Alerts on changing legislation affecting our workforce. www.HRProfessionalsMagazine.com.

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www.HRProfessionalsMagazine.com

Scott on the cover

McGARVEY

SCOTT McGARVEY, CHAIR-ELECT KYSHRM, SHRM-SCP, SPHR Scott McGarvey’s career began in restaurant operations in 1988. After working for Wendy’s International for 5+ years, his restaurant group was purchased by Sinkula Investments, a franchise company. As this company evolved, Scott transitioned into a newly created Human Resource function. Being new to HR, he turned to the local SHRM chapter for guidance. Scott immediately began volunteering on a committee, served as multiple In addition, his volunteerism in HR led him to the Northern

committee chairs, and become the chapter President. These experiences helped supplement his development as an HR practitioner and helped build a strong network of peers.

Kentucky Workforce Investment

His stint as President of NKYSHRM exposed him to the state HR council, KYSHRM,

Board (NKWIB), where he

where in January 2016 he became the Chair-Elect for Kentucky. His work on the state

is in his second year as the

council includes organizing the annual training conference for all state volunteers and

Chair. This position supports

helping to support the needs of local chapters.

the needs of local business, through workforce initiatives.

After 20+ years in the restaurant industry, McGarvey decided to use his entrepreneurial

McGarvey is currently leading

aspirations to start a business that would allow him to continue his passion as an

a strategic planning initiative to more fully align the work of the NKWIB and Northern Kentucky Career Centers with current workforce needs. This

HR volunteer and maintain his relationships with HR professionals throughout his community and the state. He now owns and operates a franchise business, ARCpoint Labs of Florence, which provides occupational screening services and is part of a national network of locations. Scott’s passion is working with these same HR professionals to help support their workforce goals.

work directly impacts companies

Scott is a lifelong Kentucky resident, earning his bachelor’s degree from Transylvania

across an eight county region in

University and MBA from Thomas More College. He currently holds his SHRM-SCP

the northern part of Kentucky.

and SPHR. 

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Highlights

SHRM Banner welcomed members to Washington, DC.

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1 SHRM CEO Hank Jackson welcomes members to the 2016 conference. 2 Alan Mulally, former president and CEO of the Ford Motor Company; and Mike Rowe, host of “Dirty Jobs” on the Discovery Channel, were the opening general session speakers on Sunday.

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3 Paul Begala, political analyst and CNN commentator; and Tucker Carlson, co-host of “Fox and Friends Weekend” and editor-in-chief of The Daily Caller, spoke at the opening general session on Tuesday. 4 Amy Cuddy, PhD, social psychologist and professor at Harvard Business School, was the opening general session speaker on Monday.

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5 Sal Khan of The Khan Academy, was the keynote speaker for the closing general session on Wednesday. 6 Sally Roberts, director of SHRMGA State Council (center) at the Advocacy Rally on Tuesday.

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7 Mike Aitken, SHRM VP of Government Affairs, presented “T-Minus 90 Days and Counting to the General Election: the Washington Outlook .”

8 Dr. David Weil, administrator, Wage & Hour Division, Department of Labor (DOL), Washington, DC, spoke on “Agency Update: DOL’s Wage & Hour Issues and Employer Resources.” 9 SHRM Certification Lounge

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10 Vicki Lipnic, commissioner; and Chai Feldblum, commissioner, U.S. Equal Employment Opportunity (EEOC), Washington, DC, discussed the “EEOC’s Task Force on Harassment in the Workplace.” 11 Jonathan Segal, partner, Duane Morris, LLP, spoke on “12 Ways to Increase Gender Equality.” 12 Cathy Fyock, CSP, SHRM-SCP, Louisville, KY presented “Hallelujah! An Anthem for Purposeful Work.”

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13 Dr. Wayne Casio, chair of SHRM’s Certification Commission, presented an update at a press briefing on Sunday. 14 Greg Hare, managing shareholder for Ogletree Deakins, Atlanta, spoke on “Bad Egg” Employees: Don’t Let Them Make Your Organization Stink!” 15 Over 15,000 people attended the 2016 SHRM Annual Conference & Exposition.

www.HRProfessionalsMagazine.com

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Mark Schmit, Ph.D, SHRM-SCP executive director, SHRM Foundation

SHRM Foundation Releases Report on Increased Use of Workforce Analytics The use and influence of workforce analytics, also known as “big data” is experiencing a transformative revolution. Its growing impact on the future composition of the workforce, HR and talent management, and overall business strategy will be inevitable during the next five to 10 years.

New research from The Economist Intelligence Unit (EIU), sponsored by the SHRM Foundation and IBM, identifies key trends affecting the global workforce and work culture, along with challenges facing senior business leaders and HR management professionals.

The report, Use of Workforce Analytics for Competitive Advantage, was released at the SHRM 2016 Annual Conference & Exposition held in Washington, D.C. Key findings include: • Investment in workforce analytics is on the rise. Research conducted by the EIU suggests that the overwhelming majority of organizations will either begin using or increase their use of big data in HR over the coming years.

• The HR function is adapting to a more data-driven world, leading to the establishment of specialist teams and the recruitment of data-oriented personnel. HR professionals of the future will need to possess a combination of two skills — a head for analytics and the ability to present findings in a manner convincing to senior executives.

• Companies including 3M, Lowe’s, Google, Sysco and Nordstrom have remained competitive because of their ability to use data and analytics to better understand their workforce, maximize productivity and improve overall business performance.

• The sphere of predictive analytics (using data to identify the likelihood of future outcomes based on historical information) will likely attract increasing attention over the coming years. Two areas in particular where predictive analytics are being leveraged are employee retention and recruitment.

• From identifying workforce skills shortages to ethics and data privacy issues, many challenges still loom around the successful use and implementation of workforce analytics. The move to data-based decision-making might result in leadership obstacles, with some executives seeing the increased use of evidence as a direct contradiction to their personal judgment.

“Workforce analytics is transforming human capital strategy,” said Mark Schmit, executive director of the SHRM Foundation. “This new report can help HR and business leaders prepare for the future and leverage the power of analytics to generate important business insights.”

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Organizations seeking to effectively use workforce analytics will certainly encounter some obstacles.

Recommendations for overcoming these obstacles include: • Improving the analytical skills of the HR function.

• Ensuring that data are clean, organized and ready for analysis.

• Keeping projects focused on solving key business problems.

• Maintaining rigor (don’t confuse correlation and causation).

• Striking a balance (perfectionism is a drawback).

• Seeking small wins at first (they will lead to bigger ones).

• Establishing cross-functional cooperation for data gathering, storage and analysis.

• Reassuring staff that analytics is an aid to human decision-making, not a replacement.

• Understanding the legal and ethical complexities of employee monitoring.

The report is part of a three-year research series including validation reports, articles, videos and infographics that identify emerging trends on workforce issues.

For the full research report, videos and infographics, visit http://futurehrtrends.eiu.com.

Jen Schramm, MPhil, SHRM-SCP SHRM manager of workforce trends and forecasting

SHRM Research Report on The New Talent Landscape As employers experience increased challenges in hiring qualified appli-

• Reasons for a more difficult recruiting environment

cants, HR professionals will need to build strong cases for greater

include a small number of applicants, candidates without

investments in securing talent, according to the New Talent Landscape:

the needed work experience, competition from other

Recruiting Difficulty and Skills Shortages research report released June 21,

employers, candidates’ lack of technical skills and the

2016 during the SHRM Conference. More than one-half of HR profes-

local market not producing enough qualified candidates.

sionals surveyed reported some level of basic skills/knowledge deficits among job applicants, and 84 percent said applicants are lacking when it comes to applied skills.

• Leveraging social media was the most common strategy HR professionals reported using to deal with recruiting difficulty. However, the strategy that was reported to be the most effective was training existing employees to take on

The report’s findings indicate that HR professionals must gather information

hard-to-fill roles.

and data to support the most effective recruiting and hiring strategies in this competitive environment. “HR professionals from all industries report a

Despite the effectiveness of training, the report’s findings indicate

highly competitive market for talent, with recruiting difficulty reaching levels

that some HR professionals are faced with managing skills

not seen in years,” said Jen Schramm, manager of SHRM’s workforce

gaps without a training budget. Almost one-third of respon-

trends and forecasting program. “Meanwhile, they also report both

dents reported that their organizations had no training budgets.

basic and applied skills shortages among job candidates. This is putting

Meanwhile, 11 percent reported that their training budgets had

more emphasis on both the need for investing in employee training and

decreased in the last year.

education and in working in partnership with other leaders in business, education and government to improve the talent pipeline in

However, some organizations seem to be getting the message

their communities.”

that there is a need for training, with 39 percent of respondents reporting that their organizations had increased their training

Other findings in the report, which is based on survey responses from 3,314 SHRM members, include the following: • The health and social assistance and manufacturing industries report the highest levels of recruiting difficulty. For instance, 46 percent of respondents indicated that the most-difficult-to-recruitfor positions are in the high-skilled medical job categories.

budgets in the last 12 months. Meanwhile, 50 percent said budgets had remained unchanged.

To effectively manage the dual challenges of recruiting difficulty and skills shortages, HR professionals will need to work with their organizations’ leaders and others to invest in education and training as a way to address skills shortfalls, according to the report.

• Smaller organizations (those with 1 to 99 employees) reported having the most difficulty in filling full-time manager and skilled

The full report is available online at https://www.shrm.org/

trade positions.

research/surveyfindings/pages/talent-landscape.aspx www.HRProfessionalsMagazine.com

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More Bad News from the NLRB for Non-Union Employers Who Have Temps in Their Workforces

By JAY KIESEWETTER

It may feel like a new game, but it’s really just “Déjà Vu All Over Again!”

On

July 11, 2016, the National Labor Relations Board (NLRB) issued a landmark decision in the long-awaited Miller & Anderson, Inc. case. With this decision, the NLRB overturned the law governing whether contingent workers (agency “temps”) who work among the employer’s regular employees can be included in a bargaining unit, comprised primarily of those regular employees, without the consent of both employers. The NLRB held in Miller & Anderson that temps may now be included in combined bargaining units with the regular employees, regardless of whether their separate employers agree to their inclusion.

The only criteria for inclusion in such a combined bargaining unit is whether the temps meet the NLRB’s traditional community of interest test. This means that in many cases where temps are interspersed with regular employees in an employer’s workforce, they will now likely be eligible voters in an NLRB election involving an employer’s regular employees.

According to the state of the law in existence from 1990 to 2000 and since 2004, temps could not automatically be lumped into a bargaining unit that was primarily comprised of regular employees of the targeted employer. For temps to be included in such a bargaining unit, the NLRB required that both the user employer (i.e., the employer of the regular employees and the user of the temps) and the temporary agency employer (i.e., the temp supplier employer) had to consent to their inclusion.

Because both employers rarely, if ever, consented to include the temps, it was an extremely uncommon event for temps to be included in bargaining units. [Note: In 2000, the NLRB briefly departed from this established legal principle regarding temps in the case of M.B. Sturgis, Inc., which permitted the inclusion of temps in bargaining units. In 2004, the NLRB overruled Sturgis and returned to its original position in Oakwood Care Center. Miller & Anderson reversed Oakwood Care and reinstated the Sturgis approach.]

In Miller & Anderson, the NLRB evaluated the prerequisite of mutual consent of the two employers before including temps in a combined bargaining unit, and then tossed it out the window. Instead of requiring any type of employer consent, the NLRB said it will now allow temps to be included in a combined bargaining unit with the regular employees, as long as the jobs the temps perform share a community of interest with those of the employer’s regular employees. As a matter of illustration, this means that if the working conditions and supervision of the temps, the work rules that apply to the temps, and the types of jobs being performed by temps are similar to those of the regular employees, they probably will be included in the bargaining unit. Additionally, they will be eligible voters in an NLRB election, along with the employer’s regular employees. Thus, if the temps are working side-byside with regular employees on an assembly line, or they are performing the same warehousing duties as the regular employees, and they are subject to the same work rules and are supervised by the same supervisors of the employer, the NLRB will likely find that they share an appropriate community of interest with the regular employees and permit their inclusion in the same bargaining unit. This was the law of the land from 2000 to 2004 under the NLRB’s Sturgis decision. The NLRB’s decision in Miller & Anderson has returned us to the days of Sturgis.

The NLRB’s Miller & Anderson decision also creates the same confusion and uncertainty for employers who are required to bargain with combined units of temps and regular employees that the NLRB created in Sturgis, when the NLRB previously veered off course on this issue. Thus, if the union wins an election in a combined unit of temps and regular employees, both the user employer and the temporary agency supplier employer will share the bargaining obligation for the temps due to their joint employer status for those individuals. Each employer, however, only will be responsible for bargaining in good faith regarding the particular terms and conditions of the temps’ employment over which it has control.

With Miller & Anderson, (and apologies to Yogi Berra, the great philosopher and catcher) it’s really a case of “déjà vu all over again!”

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While Miller & Anderson presents a dramatic departure from well-established labor law principles, this result was not unexpected from the current NLRB. In August 2015, the NLRB signaled its intended destination when it issued the decision in Browning-Ferris, Industries. In that case, the NLRB found temps to be joint employees of the user employer, as well as the temporary agency supplier employer. The temps who were working at the Browning-Ferris facility did not share a community of interest with Browning-Ferris’ employees who worked in a different part of the facility, had different working conditions, performed different jobs, and were already represented by a union. However, the NLRB found that because Browning-Ferris was a joint employer with the temporary agency employer, the temps could create an appropriate separate bargaining unit at the Browning-Ferris facility. In Browning-Ferris, the NLRB went on to hold that, if the union won the election, each employer would be obligated to bargain in good faith with the union concerning the temps’ terms and conditions of employment, but only with regard to those terms and conditions over which each respective employer exercised control. In Miller & Anderson, the NLRB extended this split bargaining obligation to both employers when temps are included in a combined bargaining unit.

The Miller & Anderson decision also takes the NLRB’s Browning-Ferris joint employer analysis to the next unfortunate logical step. That is, temps who are intermingled with the regular employees (as opposed to working as a discrete group that is separate and distinct from the employer’s regular employees, as they were in Browning-Ferris) and who share a community of interest with those regular employees can be part of the regular employees’ bargaining unit. Thus, the temps would be eligible to vote in an NLRB election along with the employer’s regular employees, and an employer can no longer veto the combined temp and regular employee bargaining unit by simply withholding its consent.

This change in the law significantly alters the issues non-union employers must consider when using temps to fill-out its workforce or as a source of future regular employee hires. As we know, temps often have wage and benefit packages that are inferior to those of the regular employees.

Temps also generally have less job security than the regular employees with whom they work.

Often, the temps are terminated (i.e., sent back to their agency) without being provided a reason or having access to the employer’s dispute resolution program. Additionally, they frequently are the first to be laid off during times of business downturn.

Each of these elements, as well as the absence of other indicia of being part of the team (such as not having the same uniforms or t-shirts as regular employees, not being invited to employee meetings or company-employee events, not receiving the employer’s written communications at home, etc.) can erode morale among temps.

Poor morale can lead to feelings of negativity, anxiety, frustration and alienation. Not only can these feelings and attitudes impede job performance and levels of cooperation and commitment, but also they can make people receptive to a union organizer’s sales pitch. In the past, while perhaps not the best approach to running a high-performing business, treating temps as second-class citizens seldom jeopardized a facility’s union-free status. Clearly, those days are over.

Given the fact that temps may end up as voters in an NLRB election along with the regular employees, it is now incumbent upon a prudent non-union employer to rethink its approach to the use of temps. Many of the same economic and other employment considerations that employers routinely take into account for their regular employees should now apply to the temps as well. By ignoring the temps’ needs and expectations, an employer could be impeding their job performance and running the risk of creating a block of potential voters with negative attitudes toward the company, as well as a possible inclination to vote for union representation in an NLRB election.

For non-union employers wishing to maintain their union-free status, time is of the essence. If the employer already has temps in its workforce, it needs to promptly analyze the state of its current situation and develop an action plan to effectively address the issues of temp morale and inclusion. Or, perhaps management needs to reevaluate its entire approach to utilizing temps, including its rationale for having temps at all.

No doubt union organizers are already retooling their organizing tactics to take advantage of the new opportunities presented to them by the NLRB’s Miller & Anderson decision. For non-union employers, it may feel like a totally new game. But in fact, it really is just “déjà vu all over again!”

Jay Kiesewetter, Senior Counsel Fisher Phillips jkiesewetter@fisherphillips.com www.fisherphillips.com

Addressing the New DOL Overtime Pay Rules Are you prepared for the new Department of Labor Overtime Wage Rules?

A Fisher Phillips and Greater Memphis Chamber Breakfast Series Seminar

DATE & TIME August 25, 2016 8:00 a.m. to 10:00 a.m.

(Includes continental breakfast and Q&A session)

LOCATION Greater Memphis Chamber 22 N Front Street, Suite 200 Memphis, TN 38103

Join Fisher Phillips Memphis attorneys Courtney Leyes and Gabe McGaha, as they present on the new DOL overtime pay rules.

These rules will become effective on December 1, 2016.

The discussion will cover: • Where to begin evaluating the impact of these changes • Other exemptions that might apply • Alternative pay structures to consider • Converting to non-exempt status • Strategies for informing employees of status change Questions?

Contact Abby Tasman at atasman@fisherphillips.com.

Space is limited. * This program is approved for HRCI and SHRM Preferred credits; CLE accreditation pending

www.HRProfessionalsMagazine.com

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Marketplace Notices And Appeals: WHAT, WHY, WHEN AND HOW?

By ED FENSHOLT, JD

Federal authorities have at last begun

marketplaces.

Health insurance is considered “minimum value” if it has an actuarial value of at least 60 percent, meaning the insurance is designed to reimburse at least 60 percent of expected medical expenses.

The insurance is considered “affordable” if the employee-only rate does not cost the full-time employee more than 9.66 percent of his or her household income (basically, adjusted gross income). This percentage is adjusted annually for inflation.

The notices include both a warning and an invitation: a warning that the IRS may impose Affordable Care Act (ACA) employer mandate tax penalties on the employer and an invitation from the marketplace to appeal its award of subsidies to the employee.

How should employers respond? Should they respond at all? What’s at risk, if anything?

Several other state-based marketplaces, most notably the marketplaces in Vermont, Connecticut, Minnesota, and Washington, have been sending their own employer notices and inviting employers to appeal the grant of subsidies to employees, through those respective marketplaces’ unique appeal processes.

to issue notices from HealthCare.gov to employers. The notices identify for employers one or more employees who recently qualified for federally subsidized individual health insurance policies through HealthCare.gov or one of several state-operated online health insurance

Why the Notices?

Employers subject to the ACA’s employer mandate may be penalized if one of their full-time employees qualifies for subsidized individual coverage through an online marketplace, like HealthCare.gov. But an employee doesn’t qualify for subsidies, and therefore cannot trigger a penalty against the employer, if the employer has offered the employee minimum value and affordable health insurance (we’ll call this a “qualifying coverage offer”). This is true even if the employee declines the offer.

The problem at the root of these marketplace notices to employers is this: When employees apply for marketplace coverage and subsidies, some marketplace coverage applications don’t do a great job of explaining the employees’ ineligibility for subsidies if the employer has made the employees a qualifying coverage offer.

Federal authorities are sending these marketplace notices regarding employees who enrolled in subsidized individual coverage through HealthCare.gov or through a state- based marketplace in one of the following states: ❖ California

❖ Maryland

❖ Colorado

❖ Massachusetts

❖ D istrict of Columbia

❖ New York ❖ Vermont

❖ Kentucky 14

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Just as bad, the marketplaces, before awarding subsidies to the employees, don’t seek front-end verification from employers about what coverage they offered the employees. Many employees who sought subsidies actually received qualifying coverage offers from their employers but either misrepresented that fact on their marketplace applications or simply failed to understand what the applications were asking.

To the extent, then, that an employee is granted subsidies by a marketplace, the subsidies imply one of two things: (1) The employer failed to make a qualifying coverage offer and might be subject to a penalty, or (2) the employee misrepresented the employer’s coverage offer and should never have qualified for subsidies in the first place. The marketplace notices are designed to figure out whether either of those implications is accurate.

Why You, and Why Now? The ACA requires the marketplaces to notify the employer when an employee makes a claim for subsidies. The notice: ◆I dentifies the employee and notes that the employee identified the employer as his or her employer. ◆ Notes

that the marketplace recently awarded subsidies (health insurance premium tax credits) to the employee because the employee said he or she received no qualifying coverage offer from the employer. ◆W arns the employer that if it failed to offer the employee minimum value and affordable

coverage, it might be liable for an employer mandate tax penalty. ◆I nvites the employer to appeal the employee’s award of subsidies . . . in essence, to demonstrate that the employer did, in fact, make a qualifying coverage offer.

The employer has 90 days to respond, if it wants to respond.

To Respond or Not to Respond: Choosing to Not Appeal There are several reasons why an employer might choose to simply ignore a notice. The marketplaces, when sending their notices to employers, mostly want to know whether it’s true—as the employee said in his or her application—that the employer did not make a qualifying coverage offer to the employee. Thus, if the employer didn’t offer such coverage, there’s no compelling reason to appeal.

But what if there were legitimate reasons why the employer didn’t make a qualifying coverage offer, reasons that excuse the employer from any potential IRS penalty? Perhaps the employee: ◆W asn’t the employer’s employee at all, or at least not for some months out of the year. ◆W as part-time. ◆W as receiving coverage through a union health fund to which the employer contributed. ◆W as in a waiting period or an initial measurement period. ◆D idn’t receive a qualifying coverage offer but was enrolled in an employment- based plan, such as a skinny, “minimum essential coverage” plan not adequately robust to be considered minimum value (this is highly unlikely because the employee, if enrolled in an employer plan, likely won’t have sought additional medical coverage in a marketplace).

In each of these situations, the employer might not owe an employer mandate tax penalty. But is lodging an appeal with HealthCare.gov or another marketplace a good use of the employer’s time? Are the marketplaces the employer’s best forum in which to defend its failure to make a qualifying coverage offer? Perhaps more to the point, will winning an appeal with the marketplace prevent the IRS from later asking the employer to prove its coverage offer or its excuse for not making one?

More and more, we think the answer is no.

Remember that the marketplaces have no authority to levy penalties under the employer mandate.

Also, pulling together information to substantiate an appeal will take time and there’s a decent chance that in some cases the marketplace will not understand the many nuances under the employer mandate that excuse an employer’s failure to offer health insurance.

Finally—and this might be the most important point—it appears that winning a marketplace appeal won’t foreclose the IRS from later circling back to the employer anyway, asking it to prove its coverage offer or a reason for not having made one. That’s because even if the employer wins its appeal with the marketplace, the marketplace is still going to send the IRS a notice that the employee was awarded subsidies.

For example, if the marketplace awards subsidies

for January through August, the employer proves on appeal that it made a qualifying coverage offer, and the marketplace cancels the subsidies, the IRS is still going to get a notice from the marketplace (Form 1095-A) that it awarded subsidies to the employee. We suspect that will still leave the IRS wondering about the employer’s coverage offer, if any, and whether the employer’s report of its coverage offer or its excuse for not offering coverage (as reported on Form 1095-C, at least for full-time employees) was accurate.

In short, the marketplaces can do no harm to the employer. The IRS might actually be in the best position to understand and accept the employer’s explanation for not having made a qualifying coverage offer. And even if the employer wins its marketplace appeal, the IRS might demand the same proof later.

To Respond or Not to Respond: Choosing to Appeal Because the IRS has been tight-lipped about precisely how it will reconcile a marketplace’s Form 1095-A (showing subsidies awarded to an employee) with an employer’s Form 1095-C (perhaps showing a qualifying coverage offer to the employee), it’s difficult to say how much winning a marketplace appeal will buy the employer in avoiding addressing the same issues later with the IRS. But if winning a marketplace appeal may not pay worthwhile dividends for the employer, ironically it may pay dividends for the employee, even though winning the appeal may mean the employee loses his or her subsidies.

If the employee shouldn’t have received subsidies in the first place, the IRS is going to figure that out (it will receive a Form 1095-A from the marketplace, showing the award of subsidies, and a Form 1095-C from the employer, showing the employer’s qualifying coverage offer). When that happens, the IRS will look to claw back at least a portion of those subsidies from the employee. If the employer’s appeal can convince the marketplace to rescind inappropriate subsidies, the employer will be minimizing the amount that the IRS may later seek to claw back from the employee.

How to Respond If an employer decides to appeal, how does it do it? The appeal process differs a bit from marketplace to marketplace, but here are some general rules. Note that, for now, most of these appeals must be handled on paper; although, some marketplaces—unfortunately, not yet HealthCare.gov—are handling them electronically. ◆ Th e employer has 90 days to appeal, measured from the date on the notice. ◆ Th e employer must include a copy of the marketplace notice. ◆ The

employer must explain and prove the qualifying coverage offer, if it made one. The employer might also choose to explain why it did not need to make one (e.g., the employee wasn’t its employee, was part-time, was in a waiting period, etc.).

Generally speaking, most appeals should focus on the fact that the employer made a qualifying coverage offer even though the employee said it

didn’t. The reasons the employer might not have made an offer are not necessarily relevant to the marketplace, because they’re mostly concerned with whether the employee actually received a qualifying coverage offer and should not be receiving subsidies, not whether the employer is excused from penalties.

Nevertheless, some marketplace appeal forms actually include boxes to check that indicate the employee was not the employer’s employee or was not full-time.

The HealthCare.gov appeal form simply includes a large box (see the sample form below) in which the employer explains in a narrative fashion that it offered coverage. If the employer didn’t offer coverage and wants to explain why, it can do that as well. Here are common examples of explanations: ◆ “We

offered minimum value and affordable coverage that would have been effective on _________ had the employee elected it.” ◆“ This individual was never our employee,” or “This individual performed services for us but was an employee of ABC Staffing and never our employee.” ◆“ This employee was [a part-time employee] [in a waiting period] [in an initial measurement or initial measurement and administrative period].” ◆ “We

did not offer minimum value and affordable coverage to this employee, but the employee is a member of a collective bargaining unit and we are required by a collective bargaining or participation agreement to make contributions to a health fund providing such coverage to bargaining unit members.” ◆ “We

did not offer minimum value and affordable coverage to the employee, but the employee was enrolled in our group health plan providing minimum essential coverage for the period _________ to _________.”

The appeal, when submitted, should include adequate supporting documentation to demonstrate the qualifying coverage offer or, if the employer has chosen to provide the marketplace with an excuse for not offering coverage, such as the employee’s part-time status, documentation to support that excuse.

This documentation might include one or more of the following: ◆A declination of coverage, signed by the employee (an actual signed declination form is not necessary to establish that the coverage offer was made, but while it might be the most difficult proof to obtain, it is probably the best proof ). ◆A report produced by a benefits administration system showing that the employee received an invitation to enroll. ◆A copy of the enrollment packet provided to the employee. ◆A copy of the summary of benefits and coverage (the eight-page plan summary required by the ACA) for the plan or coverage option offered to the employee. This summary includes a statement regarding the minimum value nature of the plan or option. ◆A copy of the marketplace notice of coverage that the employer gave the employee. This

is the notice required under the Fair Labor Standards Act that explains the availability of marketplace coverage if the employer doesn’t offer adequate coverage. The notice, if fully completed by the employer, discloses aspects of the employer’s coverage offer and eligibility rules and includes representations about the offer’s affordability. Employers are required to supply this notice (although there’s no federal penalty for failing to do so) shortly after an employee is hired. The Department of Labor offers additional information on this notice. ◆A description of the employee’s share of the premium for coverage options offered to him or her. ◆P ayroll records showing the employee’s compensation (relevant to an affordability analysis) and/or hours (relevant to a full-time employee determination). ◆ If the marketplace inquiry happens to pertain to subsidies awarded in a prior year, the Form 1095-C provided to the IRS, reflecting information about the minimum value nature of a coverage offer and its affordability (if the employee was full-time for at least one month during the reporting year).

“I Lost on Appeal! I Am Doomed!”

Nope, not even a little bit. Remember that the marketplaces have no authority to penalize an employer. If the employer can’t convince the marketplace that the employer made a qualifying coverage offer to the employee or that it had a legitimate excuse for not making an offer, the employer lives to fight another day, over that same issue, with the IRS. As noted above, the IRS might actually be more reasonable to deal with. At least, it will be more knowledgeable about the legitimacy of the many excuses an employer may have for not having made a coverage offer to a full-time employee.

What Else Should Employers Be Thinking About?

We certainly understand employers’ visceral reaction to a notice from a governmental agency warning that the employer might be penalized and offering an opportunity to appeal. The natural reaction is, “Holy cow, let’s appeal and try to nip this in the bud!” But as we noted above, an appeal—even a successful appeal— may be of less value to the employer than the employee.

If an employer is inclined to play the appeal game, there are some administrative concerns.

For employers with multiple worksites, the employee will probably have identified (to the marketplace) his or her worksite address as the employer’s address even if the headquarters location or home office is different. Employers will want to ensure that corporate employees in the various field locations recognize these marketplace notices as they arrive and forward them to the appropriate personnel in the home office.

Brad Owens

Lockton’s Memphis Office 901 757 6901 bowens@lockton.com

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17

State Sponsored Health Insurance Plans – A Change Worth Pursuing

a high proportion of hourly-wage workers.

This employee wants comprehensive family medical benefit options at the lowest price possible, which often means a State Sponsored Insurance Plan.

Every HR manager in an expanded state should consider this - if your employees are eligible for the State Health Insurance Plan, but don’t enroll because it’s too complicated and time consuming to do on their own, why wouldn’t you become an advocate for them and add this service? By assisting eligible employees get into this type of plan, you provide them with broader coverage, reduced medical expenses, and increased take home pay – all for no to very low premium. Equally important, the shift provides the employer with immediate savings by removing that employee’s insurance and healthcare expense out of the company’s budget.

Among the major findings of the report are as follows: • 78% of those who obtained coverage because of the expansion said they had not been able to afford health care prior to expansion and their enrollment.

• Two-thirds of newly covered adults say they are better off now than they were prior to enrolling.

• SHIP expansion has improved the affordability of care for expansion enrollees. The percentage of low income adults reporting problems paying medical bills and having unmet

Successful Expansion Fuels Soaring Optimism and Strong Support

By KERSTIN NEMAC and TIM NORWOOD

E

xpanded State Sponsored Health Insurance Plans (SHIP), such as Medicaid, has resulted in improved affordability and access to coverage for new enrollees through the United States.

Smart employers are addressing the needs of their employees by building unique benefit platforms that provide employee choice. One of these approaches, that is growing rapidly and with success, is adding enrollment services for the newly expanded State Sponsored Health Insurance Plans.

The reality is that the traditional way of offering employee benefits is outdated and not fully geared towards employee choice and budget, especially in companies with 18

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Not only can these programs be financially beneficial to both the employee and employer, the access and level of care is improving the lives of the enrollees. The U.S. Department of Health and Human Services released a report on June 21, 2016 which shows that the overwhelming majority (approximately 93 percent) of new State Sponsored Heath Insurance Plans’ enrollees are both satisfied with their health plans and the care they are receiving from their doctors. Sylvia Burwell, the Secretary of HHS, noted that the combination of low to no cost coverage and access to quality, affordable care has improved the overall health of millions of Americans.

The U.S. Department of

health care declined by 11%.

Currently 31 states and the District of Columbia have expanded their SHIP programs under the ACA. This allows working adults between the ages of 19-64, with incomes below 138% of the federal poverty level (approximately $33,000 in most states for a family of 4) to now benefit from this type of coverage. Louisiana most recently expanded SHIP coverage effective July 1, and became the first state in the Deep South to do so. We expect more states to follow as they watch the successes experienced in the expanded states.

As with the benefits and the healthcare industry in general, change is inevitable.

The economic and human gains of offering enrollment services for SHIP programs are a dynamic solution to reducing company health care expenses and getting employees the coverage that best suits their financial situation. This is a change worth pursuing.

Health and Human Services released a report on June 21, 2016 which shows that the overwhelming majority (approximately 93 percent) of new State Sponsored Heath

Kerstin Nemac President Med-Enroll, Inc.

Insurance Plans’ enrollees are both satisfied with their health plans and the care they are receiving from their doctors.

Tim Norwood Executive Vice President Med-Enroll, Inc.

Dear Clients and Friends: Please plan now to join us for our 37TH ANNUAL LABOR RELATIONS & EMPLOYMENT LAW UPDATE CONFERENCE in Knoxville, Tennessee, November 3 – 4, 2016!

Our day-and-a-half program covers important legal decisions and societal trends affecting employment. Topics are carefully selected to address the concerns of all employers and to give you an opportunity to select from a wide array of topics dealt with in detail. A few of the thirty-five or more topics are: • EEOC Initiatives, Including Retaliation under the Proposed New Guidance • FLSA – Recent Developments on Overtime, Joint Employment and Independent Contractors • LGBT, Religious Freedom, and Government Oversight • Developments with Mental, Emotional, and Psychological Issues Related to Employment (Including the Opioid/Heroin Addiction Crisis) • Cyber Liability – Liability for Cyber Crimes and Data Breaches • Crossing the Line: When Workplace Behavior Goes from Unlikable to a Liability • Social Media & Technology, with Millennials and Other Generations • Trends & Issues on NLRB & Union Organization • Can You See It? Behavioral Stages of Chemical Addiction • Is Your Employee Handbook Stale? BYOD, Wearables, and Other Technologies • Resolving Employee Complaints – First Line of Defense • Workplace Fairness & Avoiding Discrimination Claims Join us in Knoxville on November 3rd and 4th! We promise you an informative, but light-hearted, thorough and practical journey through today’s workplace issues. Hope to see you there!

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Chattanooga www.HRProfessionalsMagazine.com

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TENNESSEE: Yes with a specific sign, but not in the parking lot

Firearms in the Workplace: Arkansas, Kentucky, Mississippi, and Tennessee

By ROBBIN HUTTON

G

un control is one of the most divisive issues in the US today. Not surprisingly, this issue has spilled over into the state legislatures and, by extension,

In Tennessee, employers may prohibit the possession of weapons on the premises as long as they give notice of the prohibition.

Tenn. Code Ann. § 39-17-1359 (West 2016). Notice is required to be a sign that says “NO FIREARMS ALLOWED.” The phrase must measure at least one inch high and eight inches wide. The sign must also include “As authorized by T.C.A. § 39-17-1359.”

The sign must have a pictorial representation of the phrase “NO FIREARMS ALLOWED,” which includes a circle with a diagonal line. The pictorial representation must be at least four inches high and four inches wide, and the diagonal line must be at a forty-fivedegree angle from the upper left to the lower right side of the circle.

However, individuals with a valid handgun carry permit may transport and store a gun in their car while in a public or private parking area as long as (1) they are parked where they are permitted to be, (2) the firearm is kept from plain sight, and (3) when the permit holder is not in the car the gun is locked in the trunk, glove box, inside of a car, or a container securely affixed to the car. Tenn.

Code Ann. §39-17-1313 (West 2016). Also, the statute provides for employer protection from a lawsuit for any incident arising from transportation or storage of the firearm. Tenn. Code Ann. § 39-17-1313 (West 2016).

ARKANSAS: Yes Arkansas currently does not have any laws preventing employers from having policies against guns. Therefore, employers in Arkansas are free to have policies against firearms on the premises, including the parking lot.

into the workplace. The quad-state area of Arkansas, Tennessee, Mississippi, and Kentucky is no exception. Each of these states has laws regulating the right to carry concealed weapons,

open carry of weapons, and carrying weapons without a permit. The laws also provide protections to individuals who carry weapons in accordance with the statutes’ provisions. For example, Mississippi recently passed a law that allows for the carrying of a gun in a purse, briefcase, etc. without a license. Additionally, Tennessee now allows firearms in vehicles without a permit. With some states making it easier for guns to be accessible, employers must consider the potential impact on their company policies.

Are employers in Arkansas, Kentucky, Mississippi, or Tennessee able to prohibit guns on company property?

MISSISSIPPI: Yes, but not in the parking lot In Mississippi, employers may prohibit guns generally in any place in their discretion or control by posting a written notice of the prohibition that is clearly readable at a distance of not less than ten feet. Miss. Code Ann. § 45-9-101(13) (West 2016). However, employers cannot have policies prohibiting the transportation and storing of a firearm in a locked vehicle in any parking lot, parking garage, or other designated parking area. Miss. Code Ann. § 45-9-55 (West 2016).

There are two exceptions to this law: 1) company-owned or -leased vehicles, and 2) parking where access is limited by a gate, security station, or other means of limiting general public access. Miss. Code Ann. § 45-9-55 (West 2016). Additionally, the statute provides protection for employers from lawsuits arising out of any occurrence involving a gun in an employee’s vehicle. Miss. Code Ann. § 45-9-101(13) (West 2016).

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KENTUCKY: Private businesses can, but not in the parking lot In Kentucky, private businesses may prohibit firearms on the property, but they cannot prohibit firearms in an employee’s vehicle.

1998 Ky. Op. Att'y Gen. 2-34 (1998) WL 707681 (OAG 98-12).

However, there is an exception for company-owned vehicles. Ky. Rev. Stat. Ann. § 237.110(17) (West 2016). Kentucky’s statute does not mention protection for employers from a lawsuit for an incident with a gun in an employee’s car.

CONCLUSION: As the gun control issue will continue to be a hot topic, employers must be aware of the laws in the states where they do business. As demonstrated by the variations in the laws in just the four-state area discussed, it is important for a multi-state employer to be familiar with the provisions of the gun laws in each state in which it has operations. Before enacting or modifying any policy governing possession of a gun at the workplace, it is necessary for an employer to ensure that the policy is consistent with all applicable state laws.

Addie Clark, 3L at the University of Mississippi School of Law and former FordHarrison summer clerk, provided assistance in authoring the article.

Robbin Hutton, Partner FordHarrison LLP rhutton@fordharrison.com www.fordharrison.com

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21

Managing Employee Absences in a Regulatory Thicket

No

By LISA KRUPICKA

employer denies that excessive employee absences impact morale. However, many employers have given up

Multiple Methods Exist for Reducing Employee Absenteeism; One Size Does Not Fit All

on any attempt to minimize such absences because of

increase costs, reduce productivity and negatively

the confusing network of laws that make administration

of many absence control methods too complex, burdensome and/or costly to take on. This article recommends strategies for tracking and controlling absenteeism while remaining in compliance with the law.

Have a Formal Written Attendance Policy You cannot communicate employer expectations about attendance, or take any action to control time missed, without a written policy. Attendance includes missing full days of work, coming in late and leaving early. An attendance policy should apply to all employees, not just non-exempt ones. Many employers are tempted to give exempt employees less scrutiny when it comes to tracking absences on the theory that their classification assumes that they are working at a high level and can be trusted to work as long as it takes to get the job done when, in fact, exempt employees, who are paid regardless of how many hours they work in a work week, can be the worst offenders when it comes to excessive absenteeism, especially when it involves coming in late, taking long lunches and leaving early. A written attendance policy makes it more likely that attendance expectations will be communicated and enforced uniformly across an organization, thus minimizing the likelihood of claims of discrimination or favoritism.

• The “NO-FAULT” OR “NEUTRAL” ABSENCE CONTROL POLICY – this policy counts every absence, regardless of the reason, and calls for termination once a certain number of absences have been incurred. Courts have held that uniform, mechanical application of such a policy is a defense to claims of worker’s compensation retaliation.

• The “OCCURRENCE-BASED” POLICY – this policy defines an “occurrence” in terms of a single or multiple days missed on account of a single event or illness. Employees who have occurrences are subject to progressive discipline after certain targets are met, culminating in termination. This method has the advantage of being clear, objective and encouraging uniform enforcement.

• The “CARROT AND STICK” POLICY – this policy has some punitive component but also a reward-based component. Examples include awarding a bonus for good attendance over a certain period or allowing employees to “sell back” unused sick days at the end of the year.

Accurately Tracking Attendance Is Essential A written attendance policy will be of little use if an employer cannot accurately track the dates and number of times an employee has been absent. Methods can be low-tech, such as paper time sheets and time cards, medium-tech, such as third party software, or high-tech, such as an integrated HR information system (HRIS). Remember, though, that the most sophisticated computer program will not help an employer if its time keepers are not trained to make sure absences are reported to the person or persons who input the time into the system. It is important for an employer to identify all employees with time-keeping responsibilities, including direct supervisors, department heads, and human resources or finance, and train them to report attendance events promptly. An employer’s worst nightmare is to find out that an employee has been out for two weeks for surgery and his supervisor did not inform HR. Accurate tracking is also essential because, in our experience, the employees with the worst attendance records often have unusually detailed memories regarding their attendance (and excuses for absences, etc.) after they have filed suit.

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• The “DON’T BE ABSENT” POLICY – this policy does not quantify what constitutes “excessive” absenteeism, but does make it the subject of discipline.

This policy may be used by smaller employers that do not have the resources to administer a more targeted absence-control policy. An employer that implements such a policy, however, should be careful to apply it in an even-handed manner.

Be Mindful of Legal Constraints Regardless of the practical pluses and minuses of each of these policies in terms of achieving a reduction in employee absenteeism, a number of federal laws combine and intersect to make major aspects of any absence control policy compli-

cated. The Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), and even Title VII must be kept in mind when administering an absence control policy.

FAMILY AND MEDICAL LEAVE ACT. Because this statute requires employers to give employees unpaid job-protected leave for certain events, including the employee’s own serious health condition and the serious health condition of an immediate family member, employers must carve out these absences from any absence control policy. It therefore remains imperative for employers subject to the FMLA to track employee absences accurately, both to avoid counting them for purposes of an absence control policy, to make sure the proper documentation is maintained, and to make sure employees are given all the leave to which they are entitled.

AMERICANS WITH DISABILITIES ACT. This statute may be the death knell of the neutral absence control policy, especially after the passage of the ADA Amendments Act. The ADA requires employers to offer a reasonable accommodation to employees who have disabilities, which now encompasses a huge number of conditions. Such an accommodation could include an unspecified amount of additional leave above and beyond the FMLA limits. When the definition of disability was more limited, employers had at least a chance of administering a neutral absence control policy without violating the Act, since there were more bright line rules: a disability did not include temporary conditions, those that did not impact an employee’s ability to participate in the activities of daily living, or those that could be corrected with medication or medical devices. By broadly expanding the definition of disability to include virtually any medical condition, regardless of whether it can be corrected, is temporary, or affects an employee’s life in any significant way, it will be difficult, if not impossible, to administer the policy in a way that gives employers a complete defense to worker’s compensation retaliation claims without at the same time exposing employers to liability under the ADA. Although most federal courts have held that regular attendance is an essential function of many jobs, there are always exceptions and employers must remain aware of the ADA when administering any absence control policy.

TITLE VII. Absence control policies that are subjective, such as the “Don’t Be Absent” Policy, are most likely to trigger claims of discrimination. Without any clear guideline about how many absences are excessive, the decision to discipline employees is left to the discretion of an individual supervisor. The more arbitrary the administration of the policy, the more likely it is that someone in a protected category will claim to have been more harshly treated than someone outside the protected category. In the absence of objective standards, the disfavored employee can argue that the harsher treatment he received is on account of discrimination, even if such treatment was actually the product of carelessness or poor record-keeping. There is also the potential for an employee relations disaster even where employees in protected categories are not involved. If the supervisor of the administrative office of a company thinks that there is no excuse to miss work unless an employees is in the hospital or dead, but the supervisor of the maintenance department is a pushover for any excuse to miss work, employee morale is bound to be affected negatively.

Despite the above constraints, employers that are genuinely committed to controlling employee absences can navigate this complex network of laws through objective standards, careful record-keeping, the proper training of supervisors, well-defined exceptions, and the occasional advice of a good lawyer.

Lisa Krupicka, Attorney Burch, Porter & Johnson, PLLC lkrupicka@bpjlaw.com www.bpjlaw.com www.HRProfessionalsMagazine.com

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Health and Welfare Plan Nondiscrimination Testing – Do Your Plans Comply?

By STACEY L. STEWART

If you have a 401(k) plan, then chances are you know all about the nondiscrimination testing required by the tax code for your plan. At least once per year, you review the nondiscrimination testing results to determine what, if anything, needs to be done to ensure your plan passes all requisite tests. Perhaps you even designed your 401(k) plan to reduce this testing obligation by adopting a “safe harbor plan” design. But what about your health and welfare plans? Are you aware that the need to test for nondiscrimination extends to those as well? Do your plans comply? Do you understand the risks of noncompliance?

It may surprise you to learn that there are a host of nondiscrimination testing requirements that may apply to your health and welfare plans!

Applicable testing varies depending on the type of benefits provided, whether the benefits are self-funded or insured and the ability of participants to pay premiums pre-tax. You can lighten the testing burden by plan design, but it is unlikely an employer with a robust benefit offering could eliminate the need for testing completely.

First, let’s examine your knowledge of health and welfare plan nondiscrimination testing. Each of the following benefit arrangements may be subject to testing: self-funded major medical (including a separate obligation for any stand-alone self-funded dental and vision program), cafeteria plans, health flexible spending arrangements, dependent care assistance programs, health reimbursement arrangements, group term life insurance, employer contributions to health savings accounts, educational assistance plans and adoption assistance plans.

Nondiscrimination testing is relatively straightforward for some benefits.

You can assess, based upon your plan design, whether a potential problem exists. For example, a group term life insurance program that covers all employees at a fixed percentage of compensation would, by design, pass testing. An employer with an adoption assistance or educational assistance program open to all employees generally need not worry about nondiscrimination issues apart from confirming no more than 5% of benefits are paid to more than 5% shareholders each year.

However, nondiscrimination testing for other benefits is complex and the potential outcome unclear without actually running the test. For example, cafeteria plan testing requires satisfying three different component tests (some with multiple prongs), including an eligibility test, a contribution and benefits test, and a key employee concentration test. The latter two tests are based on benefit utilization, which can make the testing outcome difficult to determine in advance. A failed test results in the highly compensated being taxed on salary reductions they made under the plan. This is typically not a high-dollar ‘penalty’ but it often affects the C-Suite, which can make communicating the result particularly uncomfortable.

The testing for self-funded health plans is another complex animal. It includes testing both eligibility and benefits. While the same testing applies for all self-funded health plans – such as HRAs, health FSAs and selffunded major medical – it can be more difficult and the stakes are a lot 24

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higher for major medical. Some failures require the highly compensated to report the value of medical benefits provided (e.g., the value of a surgical procedure) in income. Imagine having to explain to your CEO that he or she must include the value of a new baby’s in-hospital neonatal care in income. Ouch!

Perhaps you are thinking “we never worried about testing before, why should we pay attention to it now?” Several reasons come to mind. First, to quote Ben Franklin, “An ounce of prevention is worth a pound of cure.”

There are often easy ways to avoid potential problems. Understanding your testing obligations can help you ensure your plan design does not automatically run afoul of the rules. It is usually easier (and cheaper) to prevent a problem rather than to fix it.

Second, testing failures can be expensive, both in terms of the employer’s cost of correction and the applicable ‘penalties.’ The purpose of nondiscrimination testing for retirement, as well as health and welfare plans, is to ensure they do not unduly favor highly compensated workers over the rank and file. Both types of plans provide tax benefits, such as the ability to fund and grow 401(k) accounts on a tax-advantaged basis and the ability to pay certain health and welfare plan premiums pre-tax through a cafeteria plan.

Hence the penalties for a plan testing failure often involve the loss of some or all of the tax benefits.

When it comes to health and welfare plan testing failures, penalties fall mainly on the highly compensated. The personal tax impact may be light as with most cafeteria plan testing failures, but the burden can be severe, especially in the case of self-funded major medical. And when things get expensive, employees often look for deep pockets to blame which can result in additional employer expenses beyond the cost of correction, such as legal fees, litigation costs, and potentially employer reputational harm.

Although testing failures primarily impact the highly compensated, that will change if and when the new insured health plan nondiscrimination testing rules take effect. These rules, once effective, would impose penalties on the plan sponsor for maintaining a discriminatory insured group health plan.

Finally, we continue to hear that the government intends to increase audits in the context of health and welfare area. Perhaps now is a good time to examine whether your plans are in compliance by conducting an internal audit? Keep in mind that nondiscrimination testing is just one piece of the compliance puzzle. You want to be confident that your plans comply with ERISA, HIPAA, COBRA and ACA. It’s always better to be prepared rather than wait until the IRS (or DOL or HHS) comes knocking.

Stacey L. Stewart, JD Senior Advisor, Client Resource Team Regions Insurance, Inc. stacey.stewart@regions.com www.regionsinsurance.com

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As we continue to grow, our promise will always remain the same: To provide the coverage you need and the guidance you trust .SM Regions Insurance is proud to be one of the top 10 fastest growing employee benefit brokers in the U.S. with $10 – $50 million in largegroup revenue, as presented by Employee Benefit News in partnership with business data analytics firm miEdge.

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

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Strategies for Effective (and Legal!)

Succession Planning

By MICHELLE M. KAEMMERLING

Succession management is an important part of strategic business planning. This entails identifying and developing internal employees who have the potential to assume leadership roles in the future and often necessitates talking to current key employees about their retirement plans. Giving some thought to how you approach these conversations can help you avoid claims that age bias—rather than strategic planning—is motivating the discussions.

Many employees are working longer than they might have expected to at the beginning of their career. There has been a steady increase in retirement age; in 2014, a Gallup poll found that the average retirement age in the United States had risen to 62. The same poll found that the age at which Americans expect to retire increased to 66. And, employees born after 1959 are not eligible for full social security retirement benefits until age 67.

Age Cannot Be a Factor in Any Employment Decision The Age Discrimination in Employment Act (ADEA) protects employees who are 40 or older from age discrimination. Many states have civil rights statutes that also prohibit age discrimination in employment. This means that an employer cannot consider an employee’s age in making any decision about his employment. For example, in identifying employees who will be laid off, it would be improper for a company to select those who are closer to retirement age. Layoff decisions must also be analyzed carefully to confirm there is no disparate impact on older workers.

Discussions about Retirement Planning Should Not Reference Age Courts have recognized that employers have a legitimate business interest in knowing their employees’ plans for the future, but discussions about succession planning should be age neutral. Obviously, a conversation that starts, “You’re getting on up there, how much longer you think you want to do this?” is more likely to be perceived as pressuring the employee to retire, or harassing the employee, than one that approaches the issue without reference to age. Similarly, a company that initiates succession planning discussions with all employees whenever they reach a certain age may have a hard time defending a claim of age bias.

When you initiate discussions about retirement plans or succession planning, avoid any reference to age (or proxies for age such as “baby boomers” or “your generation”).

In a recent age discrimination case, the statement “the time for you to retire has come” was found to support an inference of age discrimination. Employees can be offended by such comments even when made by someone who is their age or close to their age. The better practice is to approach the discussion in terms of the employee’s career plans and goals and to try to have such discussions with all employees—or at least all employees in similar positions—regardless of age.

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Do Not Pressure Employees to Retire Some courts have found that repeatedly asking an employee about retirement or encouraging them to retire may be evidence of age discrimination. If you approach an employee about her retirement plans and she indicates that she has no plans to retire, accept the answer and move on. Avoid expressing disappointment or saying anything to make the employee feel like you’re pushing her to retire.

On a related note, steering an employee towards retirement as a way to avoid addressing performance concerns can be fraught with peril. If the employee resists retirement and is ultimately discharged for performance, you can expect her to cite the comments urging her to retire as evidence that the real reason for termination was age. As is so often true when performance issues are in play, what looks like an easy out will end up causing you more trouble. Instead, if there are performance concerns with an older worker, address those concerns directly and the same way you would any other employee. Note, however, that if an employee is being discharged for performance, you could offer resignation as an alternative to an involuntary termination.

Just don’t fall into the trap of pushing retirement in order to avoid tough conversations about performance.

Employers should also keep in mind that the ADEA can come into play when companies adopt plans intended to incentivize early retirement. At least one court found that such plans run afoul of the ADEA when benefits are based solely on age at retirement, as opposed to years of service or salary.

Severance Packages and Valid Waivers of Age Claims Sometimes it makes sense to offer a severance package in conjunction with an employee’s retirement or early retirement, though such conversations must be handled carefully for the reasons discussed above. Unless company policy provides otherwise, severance packages should generally require the employee to provide a full release of all claims or potential claims in exchange for the severance payments. If an employee signs a valid release of claims in conjunction with a severance package, he has waived his right to later claim that the company forced him to retire or otherwise discriminated against him because of age.

Keep in mind that in order to obtain an enforceable release of claims under the ADEA you have to follow the requirements of the Older Workers Benefits Protection Act. That Act generally requires, among other things, that the employee be given 21 days to consider the release and seven days to revoke the release after signing. And if a layoff or exit incentive affects more than one employee, you must give employees forty years of age and older at least 45 days to review the release agreement, identify the “decisional units,” and disclose in the release agreement the job positions and ages of the employees in each of the decisional units.

With a little thought and planning, companies can have the conversations necessary to grow their business and plan for the future, while still meeting the needs of all employees, regardless of age.

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

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What to do: here are five answers to ensure your company’s risk from the growing gig economy is minimized.

Is the New Gig Economy Opening Your Company Up to Risk?

WHO SHOULD SCREEN? Make sure the all of your contract companies perform a background check.

Review your contract with all outsourced companies that are your vendors. As part of service contracts, you should insist on screening as part of any agreement.

Require that it clearly state the contract company is required to conduct background screening through a reputable third party background screening provider, and note specifically what the screening entails.

WHAT SHOULD BE SCREENED?

By JENNIFER TAYLOR

If you perform pre-employment background screening checks on new hires, your company is protected, right?

Not if you are letting contract, freelance, and temporary workers slip through the cracks.

The new “gig” economy is changing the workforce, with an estimated 90 million (according to a poll by Time Magazine) Americans having participated either as a provider or a buyer of gig service.

A “gig” is another way of saying freelance or contract worker. There is no real boss and no concrete employer relationship. The advantages of this arrangement are that it offers freedom, cost savings, and independence on both sides of the “gig.”

However, with this new aspect of employment becoming increasingly prevalent, there is also a risk that employers must address. If companies have people on their premises performing duties that are not officially “company employees,” the question arises on how to screen them to ensure they are qualified, and safe workers? HR professionals are faced with an unprecedented issue on how to handle the growing number of these types of workers.

From workers outsourced from other companies (janitors, guards, lawn care) to a freelancer or contract worker that is hired as an individual, measures must be taken to screen them properly.

Sub-contracted or temporary employees offer positive benefits to the company culture. They provide the company with flexibility, nice grounds, customer service during temporary busy periods, all without adding to the fixed employee expenses and benefits of permanent employees.

However, these non-permanent employees can also be a detriment to a company’s safety and security if not screened properly. These individuals pose as much risk as any permanent staff member and very often are even more of a potential threat.

Companies need to put a priority on who is allowed on their payroll, in their place of work, and access to potentially sensitive and valuable information. It is just as importantmaybe even more so-to put measures in place to “weed out” any temporary, outsourced, or contract worker who poses a risk to the workplace.

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Your vendors must be thorough. A simple database search won’t fill the bill to ensure safe, trusted staff. HR professionals need to ask their current vendors to list the specific types of information they collect on new hires. Good answers are county searches, drug testing, and employment verification. Bad answers are “a database search,” “we hire with our gut,” or a blank stare and silence.

WHEN SHOULD WE SCREEN? Find out how often the company screens their staff. A red flag should go up if the vendor says they screen before hiring, and then they never conduct screening again. If their employees work there for several years (which is a good sign most of the time), who knows if they have been involved in high risk, illegal activities such as drug use? Look for contract outsourced companies that perform periodic screening in addition to pre-employment checks.

If you ask these questions and don’t like your vendor’s answers, consider…. ….WHERE TO SCREEN? Screen contract employees in-house. Conduct background screening on any and all employees who work for the company in the same manner, whether they are regular employees, outsourced or contract employees. This option is a little costlier to your company on the front end, however, you benefit by maintaining complete control over the screening process. Just one bad hire can cost a company money, time lost in training, and possible reputation tarnishing if the hire results in a lawsuit. In the end, the small cost a running a background check is worth it many times over.

This is an especially attractive and beneficial option if your company is hiring individual contract, freelance, or temporary workers, instead of going through a third party staffing company.

HOW TO SCREEN? You can choose the reputable third party background screening provider that screens the employee AND the types of checks that you feel are appropriate. This process helps you maintain control and compliance, provides a uniform screening procedure across each and every employee, and minimizes the risk of a bad hire and unsafe workplace.

Background screening is an integral part of today’s safe hiring process, as it reduces the instances of turnover while offering a shield from litigation, such as negligent hiring lawsuits. It’s important that HR professionals make certain ALL employees are screened in a proper, consistent manner. Putting these actions into place can reduce the risk of lawsuits, bad press, and safety issues.

Create an actionable plan so that your company is prepared for the growing effect of the gig economy.

Jennifer Taylor Account Manager Data Facts, Inc. jtaylor@datafacts.com www.datafacts.com

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With a concentration exclusively on employment and labor law, we provide our multi-national clients with a variety of effective strategies and solutions. It’s that specialization that allows us to represent companies all over the world.

Managing your legal matters cost-effectively means we’re constantly developing new and innovative ways to solve your employment and labor law needs. We believe, when you focus on one thing, and only one thing, experience isn’t just inevitable, it’s invaluable.

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Guide to

Top Investment Advisors and TPAs Larry J. Tolbert, MBA, CEP, AIF® Founder, Radian Partners, LLC Larry J. Tolbert, MBA, CEP, AIF® views himself as a financial educator. And his vision appears to be working for his growing 12-year-old regional financial planning firm.

Radian Partners operates from offices in Memphis and Franklin, in and around six of the ten wealthiest zip codes in Tennessee.

Through the University of Tennessee at Martin, Larry and his teammates regularly offer a six-hour, non-credit course about retirement planning basics to adults on campuses, at community centers, or company offices around Middle and West Tennessee.

Larry is a Nashville native, a University of Memphis graduate and a math-focused MBA graduate of the University of Miami. After graduation, Larry served as a portfolio manager for two large insurance companies, a Wall Street firm and a major Washington, D.C-based real estate investment trust. Following his success and a period of semi-retirement, he formed Radian Partners in 2004.

Forbes Magazine spotlighted Radian Partners among leading regional financial planning firms in 2011 and again in 2014. Larry’s consumer-oriented financial commentaries have been featured on CNBC’s “Power Lunch,” in BusinessWeek and The Chicago Sun Times. And he is the authoritative voice of “Million Dollar Monday” Securities, insurance and advisory services offered through FSC Securities Corporation, member FINRA/SIPC. Radian Partners, LLC is not affiliated with FSC or registered as a broker-dealer or investment advisor. The offices of Radian Partners are located in Suite 150, 6060 Poplar Ave. Memphis, TN 38119, and may be reached by phone at (901) 202-3909.

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on a Memphis radio show with acclaimed local host Marybeth Conley.

Larry serves as an investment advisor representative with and on the advisory board of FSC Securities Corporation, one of America’s largest broker-dealers. He is a Victory motorcycle enthusiast, a publisher of a Civil War biography, an active member in the Vistage Memphis CEO group and a board member of a non-profit fostering youth entrepreneurship in economically challenged neighborhoods.

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Does your Investment Advisor MEASURE UP?

By STEPHEN D. STAMPS

Change is in the air. Yes, I used the “dreaded” change word. Some people like change, but the vast majority shy away from it. Some see change as an opportunity, while others see it as a burden. Take Enterprise, Alabama for example. In 1915, Enterprise experienced a mass infestation of boll weevils that decimated the cotton industry leaving many farmers bankrupt. However, the residents of Enter-

The DOL states “many investment professionals, consultants, brokers, insurance agents and other advisors operate within compensation structures that are misaligned with their customers’ interest and often create strong incentives to steer customers into particular investment products.” By enacting this new rule, advisors must put the client’s best interest first, legally.

prise (a name I now find very fitting) adapted, they changed and began planting

Why Put The Rule In Place Now?

other crops, mainly peanuts. The community thrived and the citizens erected a boll

ERISA rules have not been meaningfully updated since 1975. 401(k) retirement plans did not exist and IRAs were just getting started. With pension opportunities being dramatically reduced and questions about social security benefits remaining fully intact, the individual is more responsible now than ever to make sure their retirement income planning is secure. This is why conflict-free advice is so critical.

weevil statue to memorialize the event. Sometimes disruptive change is good.

The Financial Services Industry Is Changing I believe my profession, when approached correctly, is a noble one. Advisors have the opportunity to work with clients through a wide spectrum of life events. We educate new investors just starting out to better understand the mindset needed to be a long term investor. We help plan for those wanting to start a family or move into a first home. We develop strategies to assist parents with the ever increasing cost of college.

We are there to celebrate good times like weddings and retirement or console when unexpected events arise like a job loss and when a loved one passes. Yes, indeed this is a noble profession when approached the correct way which is to always act in the client’s best interest.

The Department of Labor (DOL) recently created a new “fiduciary rule” to address conflicts of interest in retirement advice. Many advisors welcome this new rule, while others may see it as a burden. Simply put, the fiduciary rule means placing the client’s interest first. Sounds like common sense if you are in retirement planning services, but there are many real and potential conflicts of interest that have never been addressed until now.

The financial services industry has been operating under the “suitability standard of care” with clients meaning that their investment recommendations must be suitable for the needs of the client. Many advisors take time to know their customers personally and make prudent investment recommendations that are suitable for their client’s situation.

However, the suitability standard does not necessarily mean client’s best interest.

The “fiduciary standard of client care” means the advisor’s investment recommendations must be in the best interest of the client and place the client’s interests ahead of their own. For example, an individual has the option of owning one of two investments.

Investment A and Investment B are both suitable for the client’s situation; however Investment B charges a higher commission. Under the suitability standard, the advisor could offer the more expensive investment where the fiduciary must recommend Investment A because the lower expense is in the client’s best interest.

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What Is The Industry Saying?

Many brokerages and insurance companies do not like the rule in the current format and have filed multiple lawsuits against the DOL. They state the rules are broad and vague. Many firms do not know how they will be impacted by this new rule. Larger firms have resources to try to fully vet the rule while smaller firms without those resources may struggle to understand and comply with the new regulations. Other objections include the costs associated with administration, regulatory and compliance to implement and monitor the changes. There is also concern for the financial impact due to potential increased litigation by clients suing their advisors if they believe they did not receive the right advice as well as the potential for class-action suits for retirement accounts. This could increase the cost of errors and omission insurance (E&O) which is the professional liability insurance used by advisors. Industry spokespeople go on to say the added costs would make it difficult to provide advice for investors with smaller account balances, because “it’s just not worth it”.

What Are the Regulators Saying?

Phyllis Borzi, Assistant Secretary for Employee Benefits Security of the DOL, stated in a recent presentation “Opponents continue to insist that the result of the [fiduciary] rule will be small savers not getting advice, but the dirty little secret … they

don’t get advice now”. She went on to say “we think in the long term, people will feel more comfortable getting advice because those giving it are legally obligated to give it”.

Secretary of the Department of Labor, Thomas Perez, said “Now make no mistake: the challenge that consumers confront in getting access to sound advice is not about bad people doing bad things. I honestly believe that the vast majority of those who provide advice are trying to do the right thing. The heart of the challenge for consumers seeking advice and advisers giving advice is that they are operating in a structurally flawed system. The interests of the consumer are all too frequently misaligned with the financial interests of the firm and the adviser.

Many companies already advertise that they put their client’s needs ahead of their own. The marketing materials contain a familiar promise: “we put clients first.” Today’s rule ensures that putting clients first is no longer simply a marketing slogan. It’s the law.”

Tips For Selecting An Advisor The traditional method of selecting an advisor is to ask friends and family, meet with the advisor and maybe do some background research.

There may be a better process to select your advisor. A recent article in the Wall Street Journal by Jason Zweig recommended reversing the process and performing your research first. He said, “start by inverting the traditional search. Rather than asking friends or family for someone, then interviewing advisers and finally researching their background, proceed in the opposite direction. That helps prevent your first impression of a charismatic adviser from coloring all your judgments.”

Work with firms where advice, not product, is a core part of the business.

A quick way to identify these advisors is if they are a Registered Investment Advisor (RIA). RIA’s do not charge commissions, but are instead compensated by way of fees. Work with advisors who are objective, work with entire investment universe and fully disclose fees and any real or potential conflicts of interest.

monitor and engage the investment advisor, but there are opportunities for plan sponsors to partner with advisors that will offset some of the fiduciary liability. There are investment firms that act as 3(38) or 3(21) fiduciaries. By using a 3(38) fiduciary investment manager, the plan sponsor/trustee is relieved of some fiduciary responsibility for the investment decisions made by the investment professional while the 3(21) provides investment recommendations to the plan sponsor/trustee.

Record keepers can also act as a fiduciary, look for 3(16) administrators to take on co-fiduciary responsibilities.

Another important step is to review your Service Agreement to make sure you understand the services being provided and the fees involved. Consider avoiding soft dollar payments or fees that are not directly linked to the service they are providing. These fees come from the investment options in the plan which drives up the expense of that particular investment. Lean toward hard dollar payments (declared fees) or payments directly linked to the service provided.

By placing these practices into action you will have a better idea if your investment advisor measures up.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Advantage Investment Management (AIM), a registered investment advisor. AIM and Wealth Strategies Group are separate entities from LPL Financial.

Stephen D. Stamps, AAMS®, AIF® Financial Advisor | Wealth Strategies Group stephen.stamps@lpl.com www.lpl.com

SISKIND SUSSER PC

The Department of Labor offers the following suggestions:

Tennessee’s Largest

1. Do your homework and ask questions

Business & Employment

2. Are the products & services available right for you?

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3. How will you pay for services, how is the advisor compensated?

4. What is the advisor’s professional experience & credentials?

5. Are there any government regulatory discipline or customer complaints?

Brokercheck (www.brokercheck.finra.org) is a great online resource to research the advisor’s background to understand their experience, work history and disclosures. Disclosures can be any customer complaints or arbitrations, regulatory actions, employment terminations, bankruptcy filings and any civil or criminal proceedings.

Best Practices For Plan Sponsors One critical item a plan sponsor should have in place is a prudent process that is consistently followed. Many lawsuits are coming about due to plan sponsors failing to act in their fiduciary capacity. The lawsuits usually center on excessive fees, poor plan designs and alleged conflicts of interest. By not having a prudent process in place and consistently following it, the plan sponsor is taking on liability.

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As plan sponsor you are still ultimately responsible to select, review, www.HRProfessionalsMagazine.com

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Guide to Top Investment Advisors and TPAs

Lauren Johnson, APA, CFC, McGregor & Associates, Inc., Lexington, KY Lauren Johnson is a partner with McGregor & Associates, Inc., an employee benefits administration and consulting firm. In her role with McGregor & Associates, Inc. she is responsible for the development strategies and day-to-day operations of the Firm’s division devoted to the Affordable Care Act, flexible benefits, COBRA and other health and welfare benefit issues.

Ms. Johnson holds a Bachelor’s degree from Eastern Kentucky University and has over 15 years of technical expertise in the employee benefits industry. She is the past president of the Central Kentucky Association of Health Underwriters and the Lexington Employee Benefits Council. She is Certified in Flexible Compensation through the Employers Council of Flexible Compensation and is a Chartered Benefit Consultant through The National Association of Alternative Benefit Consultants.

Todd Wetzel Partner, McGregor & Associates, Inc. Todd joined McGregor & Associates, Inc. in 1999 and is a partner in the Firm. Todd has successfully completed the National Institute of Pension Administrators (NIPA) Accreditation Program and has achieved the certification of Accredited Pension Administrator (APA). His background includes a Bachelor of Arts Degree in Accounting from Transylvania University. Todd specializes in retirement plan consulting, design and marketing. He is a past President of the Lexington Employee Benefits Council.

Visit us at Booth 103 at the KYSHRM Conference!

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Aug. 30 – Sept. 1, 2016 | Galt House Hotel, Louisville | kyshrmconference.com

Schedule

Tuesday, August 30, 2016 8 a.m.

8:30 - 11:30 a.m.

10 a.m. - 4:30 p.m.

12 p.m.

12:30 p.m.

2 p.m.

2:15 p.m.

3:45 p.m.

4 p.m.

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7 p.m.

Preconference Workshop attendee registration Preconference Workshop: Business Acumen for the HR Professional Exhibitor registration and setup Attendee registration Concurrent 1.5-hour workshops Afternoon break Concurrent 1.5-hour workshops Afternoon break Closing Keynote: Meeting Kentucky's Workforce Challenge sponsored by KCTCS Welcome Reception w/ Sponsors & Exhibitors sponsored by Anthem Blue Cross and Blue Shield HR Marketplace opens 32nd Annual Kentucky SHRM Conference day one adjourns

Wednesday, August 31, 2016 7 a.m.

7 a.m.

7:30 a.m.

8:30 a.m.

8:45 a.m.

10 a.m.

11 a.m.

Noon -1:45 p.m.

1:15 p.m.

1:45 p.m.

2:45 p.m.

3:45 p.m.

4-6 p.m.

5:30 p.m.

6 p.m.

8 p.m.

Attendee registration HR Marketplace opens Breakfast sponsored by Dental Health Options Wellness Corner activities Concurrent 1-hour workshops Morning break sponsored by Sullivan University Wellness Corner activities Opening Keynote: Rise of HR: Catalyst to both Organizational and Individual Fulfillment sponsored by Kentucky Career Center Morning break Wellness Corner activities Concurrent 1-hour and 1.5-hour workshops Buffet lunch sponsored by Littler Mendelson, P.C. Wellness Corner activities Concurrent 1.5-hour workshops Concurrent 1-hour workshops Afternoon dessert break sponsored by ARGI Financial Group Wellness Corner activities Concurrent 1.25-hour workshops Exhibit tear down and move out Boarding begins on Belle of Louisville Networking Reception on the Belle of Louisville begins sponsored by KentuckyONE Health 32nd Annual Kentucky SHRM Conference day two adjourns

Thursday, September 1, 2016 7 a.m.

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8:45 a.m.

10 a.m.

10:30 a.m.

12 p.m.

2:30 p.m.

Attendee registration Continental breakfast Concurrent 1-hour workshops Morning break Concurrent 1.25-hour workshops Morning break Concurrent 1.25-hour workshops Closing Keynote Luncheon: The Humans are Coming! The Humans are Coming! $2,500 cash giveaway must be present to win 32nd Annual Kentucky SHRM Conference adjourns

NOTE All events take place at the Galt House Hotel except the Networking Reception on the Belle of Louisville

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ERISA Lessons Learned from Tibble v. Edison

By DALE CONDER, JR.

The Supreme Court gives sponsors of 401(k) plans a wake-up call.

The Employee Retirement Income Security Act governs—as its name implies—retirement plans of your employees. ERISA imposes a duty on fiduciaries to act in the best interest of the plan’s participants. The term “fiduciary” under ERISA includes plan sponsors and decision makers; an employer who sets up a retirement plan for the benefit of its employees is a plan sponsor. Hence, the employer owes a fiduciary duty to the plan’s participants. If the employer breaches the fiduciary duty, ERISA provides a cause of action against the employer, but the lawsuit must be filed “no more than six years after the date of the last action which constituted a part of the breach or violation . . . .” 29 U.S.C. § 1113. In legal parlance this is a six-year statute of limitations. And this leads us to the Supreme Court’s 2015 decision in Tibble v. Edison Intern.

Background on Tibble v. Edison Intern.

In Tibble, the beneficiaries of the employer’s 401(k) plan sued for damages they claimed were caused by the employer’s breach of the fiduciary duty. Under the defined-benefit plan, the participants’ retirement benefits equaled the value of each participant’s individual account less expenses. And the expenses associated with these accounts can significantly affect the value of the retirement account. The beneficiaries claimed that in 1999 and 2002, the plan sponsors “acted imprudently by offering six higher priced retail-class mutual funds as . . . investments when materially identical lower priced institutional-class mutual funds were available . . . .” The lower price would have led to less administrative expenses, thus increasing the value of the accounts. And by not offering the lower-priced funds the plan sponsor breached its duty as a fiduciary.

The beneficiaries filed the lawsuit in 2007. The trial court held that the six-year statute of limitations barred the claims as to the funds added in 1999. The court also held that nothing occurred in the six years before the beneficiaries filed their lawsuit that would have caused a prudent fiduciary to undertake a full due-diligence review of the 1999 funds. The court did agree, however, that with respect to the 2002 funds the plan sponsor failed to offer a credible explanation as to why it offered the retail-class funds that cost the beneficiaries unnecessary administrative fees. The Ninth Circuit agreed with the trial court that the beneficiaries’ lawsuit as to the 1999 funds was filed too late. In other words, the plan sponsor selected the 1999 funds more than six years before they sued. The Supreme Court reviewed the case to determine if the Ninth Circuit applied the correct standard.

The Supreme Court held that the Ninth Circuit erred in the standard that it applied.

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The Court’s explanation of the extent of the fiduciary duty increases the exposure for employers.

According to the unanimous Supreme Court, the Ninth Circuit’s error was in not recognizing that trust law requires a fiduciary “to conduct a regular review of its investment with the nature and timing of the review contingent on the circumstances.”

ERISA requires a fiduciary to “discharge his responsibility ‘with care, skill, prudence, and diligence’ that a prudent person ‘acting in a like capacity and familiar with such matters’ would use.” And courts are to look to trust law to determine if the fiduciary has satisfied the duty. And this is where employers as plan sponsors have some risk.

Trust law does not permit a fiduciary to discharge his duty by simply making wise choices on the front end as to which funds to include in a plan. The

Trust law does not permit a fiduciary to discharge his duty by simply making wise choices on the front end as to which funds to include in a plan. The trustee has a “continuing duty to monitor trust investments and to remove imprudent ones.

This continuing duty exists separate and apart from the trustee’s duty to exercise prudence in selecting investments at the outset.”

trustee has a “continuing duty to monitor trust investments and to remove imprudent ones. This continuing duty exists separate and apart from the trustee’s duty to exercise prudence in selecting investments at the outset.”

The decision to include an investment might be prudent, but circumstances can dictate that it is no longer prudent to keep that investment.

And by systematically monitoring the investments at regular intervals, the trustee can determine if any of the investments are no longer appropriate.

Any imprudent investments must then be removed. The Court did not offer an opinion as to whether the plan sponsor fulfilled its duty and sent the case back to the Ninth Circuit for that determination.

Legal Challenges are Coming at HR Professionals from Every Direction

How does this affect employers?

Some have warned that Tibble exposes employers to liability beyond the six-year statute of limitations. This, however, is not correct; it does make clear that the beginning of the six-year period is not a one-time thing. The six-year period can start anew if there are circumstances showing that the plan sponsor failed in its fiduciary duty to remove a fund from the plan once it becomes imprudent to keep it. And this is the wake-up call to employers.

Employers cannot simply shift this fiduciary duty to a third party. If an employer contracts with a third party to fulfill the duty to continually monitor the plan, it must perform its due diligence in selecting this entity.

In short, employers must be aware of this duty to continually monitor the retirement plans and put in place processes for fulfilling this duty.

Did the plan beneficiaries ultimately win following the Supreme Court’s decision?

What the Supreme Court did not do in Tibble is as important as what it did. What it did not do is determine that the plan sponsor breached its fiduciary ongoing duty to monitor the funds. This was for the lower courts to decide. But the lower courts never reached that issue.

The problem for the plan’s beneficiaries was that the Ninth Circuit held that the beneficiaries did not raise in the lower court their claim that the plan sponsor breached its ongoing duty to monitor the funds. Because this breach-of-an-ongoing-duty-to-monitor issue was not raised in the trial court, the beneficiaries waived it on appeal: case over!

Conclusion Under ERISA plan sponsors have an ongoing duty to monitor the plan’s funds to see that the decisions to include funds are still in the best interest of the beneficiaries. And a failure to fulfill this duty resets the running of the six-year period for filling the lawsuit. But at the end of the day this did the Tibble plaintiffs no good. They won the battle, but lost the war. Perhaps the sponsor breached its duty—and many in the investment world have said so—but the beneficiaries did not get the damages relief they sought as to the 1999 funds because of a failure to raise the argument at trial.

Dale Conder, Jr., Attorney Rainey, Kizer, Bell & Reviere PLC dconder@raineykizer.com www.raineykizer.com

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

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† †

† † Why the group life coverage you offer your workers Whole life offers a whole lot more probably isn’t enough

By B LAKE ROGERS, JIMMY HINTON, CHRIS MENARD, and RICKY REYNOLDS

L

ife insurance is always a little tricky to talk about. You have dental insurance to keep your smile healthy and car insurance so you can afford to repair your car after a fender-bender.

But life insurance is different: In most cases, it’s your beneficiary who receives the benefits.

Most of America’s workers sidestep the issue by relying on the group life insurance they get at work.

You likely offer your employees group life coverage with a flat dollar amount benefit or a multiple of salary. And don’t get us wrong: This is an extremely important benefit to offer, and employees value it highly. LIMRA’s 2015 Life Insurance Awareness Month Facts reported nearly seven in 10 employees have access to this type of financial protection at work, and 80 percent of those participate.

A growing gap in coverage The problem is employer-provided group life coverage is all the life insurance most people have — and it’s not nearly enough. LIMRA estimates there’s a growing trillion dollar gap between the amount of life insurance we need and the amount we have (news release, Sept. 8, 2015). And most U.S. workers know it. Sixty-five percent of employees with group life coverage believe they need more life insurance beyond what their employer provides.

It isn’t just the dollar amount that’s a concern. Your group life insurance only covers your employees while they’re working for you. If they change jobs, or retire, or have to leave work for any reason, the coverage usually ends. If that reason was a serious health problem, they may not be able to get coverage elsewhere later.

That’s why it’s important to offer your employees supplemental life insurance. Voluntary life insurance employees select and pay for themselves can provide additional coverage and an ongoing financial safety net families can rely on.

Offer choices for different needs Just like the other benefits you may offer, life insurance shouldn’t be one-size-fits-all.

Term life insurance is less expensive but covers only a set period of time, such as 10 or 20 years. If you have younger or lower-income employees, term can help them get started with some coverage. It also can be a good fit for those who want to protect the “if ” — if they die prematurely and need income replacement or help paying off a mortgage.

Permanent life insurance can provide lifelong protection for the “when” — the idea is it’ll still be in place when you die. Unlike term insurance, permanent coverage accumulates cash value. You could say it’s more like buying a house than renting an apartment. The policyholder can take out a loan against the cash value if needed for unexpected expenses or even to pay the premiums.

There are several types of permanent plans, but perhaps the best choice in today’s economic environment is whole life insurance. Interest rates have been low for years, and that’s likely to continue.

Whole life’s premiums and cash value don’t depend on current interest rates as much as universal life or variable life, so it offers more stability.

For example, Colonial Life’s recently enhanced whole life plan features a “triple guarantee” — the premiums, cash value and death benefit are all set at the point of sale and won’t fluctuate based on economic conditions. That means your employees know exactly what they’re buying now and what they can expect in the future, as long as they pay premiums and repay any loans.

Removing the interest rate rigmarole means whole life is a much less complex type of life insurance for enrollers to explain and for employees to understand. That also makes it a better fit for your workplace benefits enrollment. Even if you take advantage of no-cost one-to-one benefits education sessions for your enrollment that providers such as Colonial Life offer (and we certainly hope you 38

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do), the time each employee has for decision-making is limited. In this case, simpler is better.

Blake Rogers Tennessee territory sales manager, Colonial Life & Accident Insurance Company tblakerogers@coloniallife.com or 615-696-6672

Today’s enhanced whole life plans also can include valuable additional coverage, such as an accidental death benefit rider or long-term care benefit rider. Paying for long-term care is a top financial concern for American consumers, according to LIMRA’s 2016 Insurance Barometer Study. A significant number of those who took the survey said they’d be interested in a plan that combines life and long-term care coverage. A long-term care rider can pay a monthly benefit amount if the policyholder qualifies for certain types of long-term care assistance.

Jimmy Hinton Mississippi territory sales manager, Colonial Life & Accident Insurance Company jhhinton@coloniallife.com or 601-326-2954

No need to kid around

Chris Menard

Whole life insurance also is a valuable voluntary benefit your employees may want to select for their children, grandchildren, step-children or adopted children. This can begin a lifetime of protection at affordable rates.

The younger children are when their coverage starts, the lower the rate. In fact, LIMRA’s 2015 Insurance Barometer Study says 45 percent of those who purchase juvenile life insurance do so to lock in a low rate. Buying whole life for a child also protects them against the chance an unexpected accident or illness could make life insurance more expensive — or even unavailable — later on.

Just like adult coverage, juvenile whole life accumulates cash value at a guaranteed rate as long as the policy is in effect. Of course, life insurance isn’t designed as a savings plan. But it can help play a role in providing a financial safety net, now and in the future.

Whole life offers a whole lot of value for your employees. If you’d like to learn more about how you can make this benefit —or other life insurance — available to your employees without affecting your benefits budget, give any of us a call.

Kentucky territory sales manager, Colonial Life & Accident Insurance Company cmenard@coloniallife.com or 502-272-9664

Ricky Reynolds Arkansas territory sales manager, Colonial Life & Accident Insurance Company rcreynolds@coloniallife.com or 501-246-8979 ABOUT COLONIAL LIFE Colonial Life & Accident Insurance Company is a market leader in providing financial protection benefits through the workplace, including disability, life, accident, dental, cancer, critical illness and hospital confinement indemnity insurance. The company’s benefit services and education, innovative enrollment technology and personal service support 85,000 businesses and organizations, representing 3.5 million of America’s workers and their families. For more information, visit www.ColonialLife.com, www.facebook.com/coloniallifebenefits, www.twitter.com/coloniallife and www.linkedin. com/company/colonial-life.

The policy or its provisions may vary or be unavailable in some states. The policy has exclusions and limitations which may affect any benefits payable. Colonial Life insurance products are underwritten

by Colonial Life & Accident Insurance Company, for which Colonial Life is the marketing brand. Form ADR799-2016.

Is an outdated compensation plan sabotaging your company’s success?

You may be missing out on engaged employees, robust growth, and competitive edge.

The right employee pay and reward program can drive your company forward—and OneCompensation can help you get there.

We Provide: • Compensation Plan Design (Base, Bonus, and Incentives Guidelines) • Job Leveling and Career Pathing • Detailed Implementation and Communication Plans Our Results: • Increase your ability to attract, retain and engage employees and top performers • Reduce time needed to make informed, strategic decisions about your employees What can OneCompensation do for you? Let’s talk— email clifford@onecompensation.com or call 408-391-4274.

Clifford Stephan | Principal Clifford@onecompensation.com

OneCompensation has been proud to serve both private and public businesses in healthcare, service and technology, including Kaiser Permanente, Google, and Stanford Healthcare. www.onecompensation.com

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‡ Things to do When You Feel Overwhelmed at Work

By HARVEY DEUTSCHENDORF

Is your job starting to feel like a nightmare that never ends?

Work is piling up and it feels you will never get out from under. You live in constant dread of more assignments coming your way and missed deadlines. There have been numerous studies showing that workplace stress is the largest form of stress for American adults and this stress has increased in the last few decades. While technology has held the promise of more leisure time and freedom, being always on and wired has increased feelings of not being able to cope.

Instead of sitting back and feeling like we are helpless in the face of increased workload pressures, there are a number of things we can do.

Avoid Being a Martyr or Hero There is no upside to being a hero or martyr and letting yourself burn out. You don’t have to go around whining about how much you have to do but firmly let those you are involved with know you have reached your limit and are unable to take on any more. Ultimately it is you who has to take responsibility for looking after yourself. There is a limit on how much you can do and you need to know when you have reached that limit and let others know

Let go of the Feeling You Need to Control Everything Some people who take on too much are perfectionists or believe that no one else can do the work as well as they can. Lack of delegation and the need to micromanage are both paths to increased stress and burnout. Work on learning to trust others and giving them the leeway to fail and learn from their failures. Focus your thinking on situations where others were in control and everything turned out fine.

Ask for Help Some people see asking for help as a sign of weakness and will do anything to avoid being seen as sub-standard. Like many behaviors that we have learned, this one does not serve us well.

Spreading out the work also spreads the pressure so that it does not all fall upon us. Seldom will the people we ask for help view us as weak and will be willing to help. We can overcome this by practicing asking even though we will be outside of our comfort zone initially. If difficult, ask for a small amount of help and work up to larger issues.

Take Time Out to Think, Meditate, Go for a Walk to Refresh and Regenerate The natural urge when feeling you are being inundated is to push harder. While it seems counterintuitive, after a certain time we are unable to focus effectively. At that point the most productive 40

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thing we can do is take a break, a time out, to take us away from what we are doing to recharge and regenerate. One of Stephen Covey’s 7 Habits of Highly Effective People is that we take time to sharpen our saw. Take time to sharpen your mind when you are beginning to get dull and ineffective. This will allow us to think clearly and consider whether there are easier, faster and more efficient ways that we can accomplish the same things. Be aware that sometimes things that we stressed about do not materialize and things end up working out.

Reach Out to Your Support System One of the things that we are tempted to do when we feel our to do’s are out of control, is to ignore our friends and families in an attempt to get caught up. While it seems counterproductive, this is the time that we need them the most. Not only do they provide us with a backup in case things don’t work out, they can provide us with moral and emotional support at a time we badly need it. They may even come up with solutions and ideas that we were unable to because of our being so close to the situation and stressed out by it.

Look Beyond This Time to a Better Tomorrow Think ahead and when this time has passed, you will be looking back on it. Imagine how life will be when you are no longer stressed and working steadily towards your goals and dreams. Ask yourself what you are gaining from your present experience that will serve you well in the future. Perhaps you are learning to be more assertive, to say no when you need to, find out who you can count on when you need help.

Look After Your Physical/Emotional Health and Relationships It is important that we don’t push ourselves so hard that we begin to neglect our physical/emotional health and important relationships. Carve out time every day to exercise, meditate, get enough sleep and connect with those important in your life. Guard that time and resist the temptation to let these things slide. Remind yourself that your health, emotional well-being and loved ones are more important than anything else and must be looked after before anything else.

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.

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The HR Lawyer Within You

By PAULA HAYES

A Look at the Author As HR professionals are keenly aware, there are legal perimeters that when followed construct a well-balanced process for hiring, management, and firing practices in today’s workforce. Robert D. Hudson’s award-winning, The HR Lawyer Within You: Human Resource Strategies for Legal Success, is a detailed and extremely thorough guide to teaching HR professionals the essential ingredients to thinking like an HR lawyer. Hudson’s book was recognized at the Great Southeast Book Festival as Best Business Book of 2015. Hudson is also no stranger to writing books; he is a successful author of two other stellar works on business, A Better Tomorrow – Fighting for Capitalism and Jobs in the Heartland and Our Best Tomorrow – Students Teaching Capitalism to America. Unquestionably, Hudson’s advice stems from his extensive career as an attorney in labor law, practicing with Frost Brown Todd, L.L.C., a labor and law group, as well as from his prior involvement with the Northern Kentucky Chamber and the Covington Business Council. Trusted outlets, such as Fox News and Fox Business News, have sought out Hudson's expertise in labor law. Thus given his over twenty-five years of labor law experience, it is no surprise that The HR Lawyer Within You provides a relevant and much needed legal perspective to solving HR problems so as to avoid legal quagmires and curtail litigation before such problems should arise. Notably, Hudson’s book is a proactive look at ways to successfully navigate multifaceted and compound human resource matters.

The Scope of Finding The HR Lawyer Within You The HR Lawyer Within You takes HR law and breaks it down into manageable sections providing HR professionals with an easy to read go-to-guide on a vast array of HR topics. It is perhaps commonplace to recognize how vetting candidates and hiring the right fit for your company is imperative to reducing turnovers and maintaining a vital well-trained staff; but, how often do we pause and consider legal issues that actually surround the screening and hiring process? With regard to the hiring process, Hudson’s book covers all angles, beginning with the responsibility of companies to provide solid job descriptions to that of questions concerning how to adequately advertise and recruit candidates that will bring the best fit for a company, as well as how to avoid legal entanglements with job applications, resumes, and fielding interview questions. For example, Hudson reminds us of how important it is to control the amount of information initially gathered from a job applicant in the hiring process so that unnecessary information is not brought into play, thereby, unintentionally leading to gray ethical areas of discrimination; Hudson even suggests considering limiting resumes or resume information because the information a candidate may place on his or 42

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her resume may include information that should be eliminated from the initial hiring and screening process. Hudson gives us solid advice with hiring practices—“You want more information about an applicant, not less, right? Employers often have applicants present a resume in addition to a formal job application. Legally, however, more information can create problems.” That is because the more information you take in about a candidate the more the company can become at risk for obtaining legally protected class information. What about offer letters once a candidate is selected? How much information does the employer need to legally provide? How do you reject an applicant and close the screening process?

How much information do you provide to candidates about job responsibilities prior to hire? These are the kinds of questions Hudson reminds the HR professional to contemplate anew from a full legal perspective. To questions and topics such as these, Hudson steps in with sober reasoning reminding his readers, “If you’re involved in hiring, take a step back and look at your process. Is it working? If you do not have a diverse workforce and you want one, how can you attain a more diverse applicant flow?” Also, “Are you recruiting and retaining high performers, with low turnover? We all know that hiring takes time and money. You will train a new hire. If they don’t fit or leave, you’ve lost that time or money. With each hiring and departure, your overall risk of claims also increases. Investing in your hiring process also makes good business sense.” Hudson’s advice strikes right at the center of the responsibilities that HR professionals must shoulder to create the type of work environment desired.

Yet, it is not only in hiring that the HR professional must consider how to avoid potential legal trouble; for, there are many other areas to consider as well such as employment agreements, managing the workforce with special issues, employee discipline and separation, and labor laws and unions. At the end of each main section, Hudson provides a short list of what he refers to as “Human Resource Strategies” that work to sum up the main points, but that also serve as very enlightening guideposts for creating the right kind of positive values and ethical commitment in HR departments. For instance, with regards to managing a workforce with special issues, Hudson helps his readers to create a guiding plan, noting, “Begin with a philosophy of helping disabled employees to become employed and to stay employed” and “Be positive and thorough with reasonable accommodation. Match limitations to job restrictions and try to problem solve. Don’t go it alone. Involve the employee and seek outside assistance if necessary.” Or, in very tricky areas of HR law such as compliance with FMLA, Hudson provides summary pointers such as, “Make a commitment to compliance. Without this commitment you will find it exceedingly difficult to lawfully terminate employees for absenteeism. Absent tracking and classifying absences as FMLA or non-FMLA, you may inadvertently terminate an employee for absenteeism which

included one more FMLA absences.” In other words, Hudson’s advice in these problematic areas is to create a company policy, stay committed to it, ensure that company policy is in compliance with HR law, and put into place a system that accurately measures in accordance with the law; in HR matters such as FMLA, there is no place for sloppy bookkeeping or half-knowledge of the law, as that can lead, accidently, to legal errors that then become time-consuming and potentially costly for companies.

Who Would Benefit from this Read Hudson’s simple reminders are imperatives for creating happy, positive, and ultimately productive employees in the workplace. Hudson’s no-nonsense attitude to creating a HR philosophy that is inclusive and friendly is appreciated as it balances well with the book’s examination of legal rights. You do not need a law degree to find the “HR Lawyer within.” You just need to read this book to discover it! While Hudson’s intended audience, I believe, is the HR professional, I would strongly recommend both HR professionals and employees read this book. For the HR professional, there is need-to-know information about how to run an HR department. For the employee, it’s always good to know your legal rights so as to avoid becoming the victim of unethical and illegal practices in the workplace. As Hudson’s book proves, with a little time spent in the pages of his book, anyone can find the HR lawyer within!

Real world solutions to your employee benefits needs.

The world of employee benefits is COMPLEX. At Kiesewetter Law Firm, we understand this complexity.

And we’re here to help.

We are a boutique law firm that focuses on employee benefits, executive compensation and health care regulatory compliance law.

From the day we opened our doors, our focus has been and will continue to be the same— to solve complicated legal issues in collaborative, comprehensive and creative ways while being client driven and cost-effective.

Interested in working together? Give us a call.

Paula Hayes, Ph.D paulapoet1@gmail www.drpaulhayesenglish.org

Why Employers Want New Ideas to Reduce Employee Smoking Rates • Tobacco use is now the leading preventable cause of premature death in the U.S. • Cancer is the #1 cause of death in working age adults; up to 50% of all cancers may be tobacco-related • Tobacco use plays a role in strokes, heart and pulmonary diseases • For every person who dies of tobacco-related disease, 30 live with a serious tobacco-related illness • Employers incur an average excess cost annually per smoker of $5,816 • Rates of tobacco-usage in the mid-south remain high, 170% of the national average Employers are looking for creative ideas and new low-cost resources to help reduce employee smoking rates Current resources have been available for over five years; during that time, smoking rates in the mid-south have declined very little Employer health costs continue to climb, and the list of tobacco-related health concerns continues to grow

Ask for your free 15-min consultation to discuss your company’s needs

Learn more at JRConsults.net Freedom from Smoking Clinic Facilitator, American Lung Association; FreshStart, American Cancer Society; Connecting with Patients for Tobacco-free Living, Mayo Clinic Nicotine Dependence Center (LinkedIn/in/JanRoubion)

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Macy’s Among Three Employers Charged with Discriminating Against Work-Authorized Non-U.S. Citizens

By BRUCE E. BUCHANAN

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) agreed to settlement agreements with Macy’s, Powerstaffing Inc., a temporary staffing agency based in Edison, New Jersey, and Crookham Company, of Caldwell, Idaho over allegations that the employers violated the Immigration and Nationality Act (INA) by discriminating against work-authorized non-U.S. citizens.

OSC’s Investigation of Macy’s The OSC’s investigation was based on a charge filed by a lawful permanent resident (LPR) whose hiring was delayed in October 2015 at its Glendale, California facility.

The investigation found the employee was not able to begin working at Macy’s even though she showed sufficient proof of her work authorization because a Macy’s official incorrectly believed that LPRs were required to produce unexpired permanent resident cards, rather than any other document(s). The investigation also found that other human resource employees in Macy’s Glendale location were imposing the same unnecessary requirement on four other LPRs. In contrast, U.S. citizens were permitted to choose whichever valid documents they wanted to present to prove their work authorization. Under the Immigration and Nationality Act, LPRs do not have to show their permanent resident cards when they start working; instead, they can choose whichever documentation the would like to present, such as a driver’s license and unrestricted social security card, from the lists of acceptable documents.

Under the settlement agreement, Macy’s will pay an $8,700 civil penalty, provide additional training to its employees and assess its employees’ understanding of applicable rules, and be subject to monitoring for 18 months, including periodically producing Form I-9 information to the OSC for review.

OSC’s Investigation of Powerstaffing The OSC reached a settlement agreement with Powerstaffing Inc. where the company agreed to pay $153,000 in civil penalties. The OSC’s investigation found that from June 20, 2014, until December 15, 2015, Powerstaffing had a pattern or practice of requesting specific immigration documents from non-U.S. citizens for the I-9 forms. In contrast, Powerstaffing allowed U.S. citizens to present whichever valid documents they wanted to present to prove their work authorization. Under the INA, all workers, including non-U.S. citizens, must be allowed to choose whichever valid documentation they would like to present from the lists of acceptable documents to prove their work authorization, such as a driver’s license and an unrestricted social security card.

Powerstaffing promptly resolved this matter by its staff starting proper I-9 practices.

Besides the civil penalties, the settlement agreement requires Powerstaffing to be subject to OSC monitoring and review of its hiring policies for two years, and every four months Powerstaffing will provide OSC with a list of hires of all lawful permanent residents and OSC will choose 125 from the list to analyze their I-9s and documentation.

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OSC’s Investigation of Crookham Company The OSC also reached an agreement with Crookham Company, whereby the company agreed to pay $200,000 to resolve allegations that the company discriminated against work-authorized non-U.S. citizens, in violation of the INA. The investigation found Crookham discriminated against non-U.S. citizens by requiring them to produce either a permanent resident card (green card) or employment authorization card to prove their work authorization, whereas U.S. citizens were permitted to choose whichever valid documentation they wanted to present to prove their work authorization. It is unlawful for an employer to limit employees’ choice of documentation because of their citizenship or immigration status.

Under the settlement agreement, Crookham will be subject to monitoring for a three-year period. Prior to the settlement, Crookham proactively underwent departmentprovided training on the anti-discrimination provision of the INA and voluntarily implemented other measures to ensure future compliance.

Take Aways This settlement is just another instance of OSC’s aggressive approach to enforcing the anti-discrimination provisions under Section 12324b of the INA. To date in calendar year 2016, the OSC has settled eight discrimination cases. Even after all of this activity, I would estimate 50% of employers are not aware of the OSC and its authority.

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

Please join the Mid South Compensation Association for our annual Total Rewards Seminar which will be held at the Hamilton Eye Institute, 930 Madison Ave, Memphis, TN 38103 on Thursday, August 18, 2016.

The seminar begins promptly at 8:30 a.m. and ends at 4 p.m. Breakfast, lunch, and afternoon snack will be provided.

SCHEDULED EVENTS AT THIS YEAR’S SEMINAR INCLUDE: • A Strategic Total Rewards panel including participants from HR and Compensation leadership roles from across the Mid-South.

• Maintaining the Human Touch in Compensation in a High-Tech World presented by Alex Smith, SPHR, SHRM-SCP, Chief Human Resources Officer, City of Memphis • Getting a Seat at the Table presented by Richard L. Stokes, M.S., IPMA-SCP, PHR, SHRM-CP, Human Resources Consultant\Office Manager, The University of Tennessee • Conducting internal audits of FLSA classifications and Implementing the New FLSA requirement 2016 presented by Alan Crone, Mayor Special Counsel, Attorney at Law at Crone & McEvoy, PL • Excel Show and Tell • And much more!

The cost for the seminar is $35.00 for MSCA members, $45.00 for SHRM or WorldatWork members, $60.00 for non-members.

To register please visit http://www.msca-memphis.org and go to News and Events.

We look forward to seeing you there!

The Mid South Compensation Association (MSCA) is a member of World at Work Local Network, an alliance of Human Resources organizations supporting excellence in the field of Compensation, Benefits, and Work Life. MSCA offers high quality, dynamic and responsive programs to our members and facilitates professional development by offering seminars and courses annually. MSCA was a nominee for local association of the year through World at Work.

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TSHHRA presents Tennessee Society for Healthcare Human Resources Administration

2016 Annual State Conference August 25-26, 2016 THA Conference Center 5201 Virginia Way Brentwood, TN 37027

Social Event: Mere Bulles Restaurant Thursday, August 25, 2016 5:30 p.m.

Friday, August 26, 2016 Conference Wrap Up 12:30 p.m.

Please Register Today! http://tshhra.org/tshhraj/index.php/auto-generate-from-title/conference

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INTERNATIONAL PRESENCE. LOCAL KNOWLEDGE. LABOR AND EMPLOYMENT LAW At Ogletree Deakins, we understand that our clients’ employment issues often are not isolated to one state, country, or region of the world. Ogletree Deakins is one of the largest labor and employment law firms representing management in all types of employmentrelated legal matters. The firm has more than 750 lawyers located in 49 offices across the United States and in Europe, Canada, and Mexico.

Register at www.ogletreedeakins.com/our-insights to receive updates on recent developments in labor and employment law.

www.ogletreedeakins.com | 901.767.6160

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