August 2017 issue

Volume 7 : Issue 8

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Highlights of

2017 SHRM

Profiles of ERISA and Employee Benefits Attorneys

How to Properly Structure a

Stop Loss Contract

Conference & Exposition in New Orleans June 18-21

Laura

DeFazio , SHRM-CP, PHR,

President, Louisville SHRM Online SHRM Certification Exam Prep Class Begins August 21 Open Enrollment

Considerations

for Plan Sponsors

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Presents

Affordable Online SHRM-CP® | SHRM-SCP® Certification Exam Prep Class Online classes begin August 21 and will meet twice per week for 12 weeks on Monday and Thursday evenings from 6:00 PM to 7:30 PM.

SHRM Learning System® Participant Materials

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

Fall Exam Window is: December 1, 2017 to February 15, 2018.

For more information visit shrmcertification.org Deadline to register is August 16, 2017 Contact cynthia@hrprosmagazine.com OR visit our website at www.hrprofessionalsmagazine.com About the instructor: Cynthia Y. Thompson is Principal and Founder of The Thompson HR Firm, LLC, a human resources consulting company in Memphis, TN. She is a senior human resources executive with more than twenty years of human resources experience concentrated in publicly traded companies. She is also the Publisher | Editor of HR Professionals Magazine, an HR trade publication distributed to HR professionals in Tennessee, Alabama, Georgia, Kentucky, Mississippi, and Arkansas. The mission of the publication is to inform and educate HR professionals. Cynthia has an MBA and is certified as a Senior Professional in Human Resources by SHRM and HRCI. Cynthia is a faculty member at Christian Brothers University in Memphis teaching Human Resource Management. Cynthia also teaches online HR Certification Exam Prep Courses for HRCI and SHRM. She is a sought-after speaker on HR Strategic Leadership. www.HRProfessionalsMagazine.com

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Bringing Human Resources & Management Expertise to You

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of job seekers are open to receiving targeted jobs via text. 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

Lily S. Axelrod Susan K. Bilbro Mary E. Buckley William Carmichael David Estel J. Gregory Grisham Harvey Deutschendorf Jeanne J. Fisher Jennifer Hagerman Jennifer Kiesewetter Dwayne O. Littauer Kerstin Nemec Tim Norwood Troy A. Price Alex Smith Kara Spence Joe Stubblebine Laurie Willoughby Board of Advisors

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

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

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

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Features

2 Eliminate Distractions and Mitigate Risk with One Employee Benefit 3 Register for Online SHRM Certification Exam Prep Class Beginning August 21 5 note from the editor 6 Profile: Laura DeFazio, SHRM-CP, PHR, President of Louisville SHRM 20 Book Look: One Minute Mentoring by Ken Blanchard and Claire Diaz-Ortiz 22 5 Actions to Take if Your Applicant Fails a Background Check 24 The Power of Culture Change: Our City of Memphis HR Strategy 40 Rethinking Salary Expense as an Investment 42 Welcome to the Future of the Recruitment Industry 48 The Salary History Question: Alternatives for Recruiters and Hiring Managers

Profiles of ERISA and Employee Benefits Attorneys

32 Ogletree Deakins 33 Littler 34 Bass Berry Sims 35 Wright Lindsey Jennings Kiesewetter Law Firm, PLLC Cross, Gunter, Witherspoon & Gulches, P.C. 36 FordHarrison The Kullman Firm 37 Baker Donelson 38 Friday Eldredge & Clark

Employee Benefits

12 Attorney-Client Privilege and ERISA 14 How (and why) 401(k) Investment Offerings are (or should be) Changing 18 Size Does Matter 23 Top Employee Benefits Administrators 26 Open Enrollment Considerations for Plan Sponsors 28 The Importance of Structure in Designing a Stop Loss Contract 30 The Replace and Repeal Rollercoaster: How Will Employers Be Impacted?

Employment Law

10 Tennessee Non-Compete Law: A Continued Focus on the Employer’s Alleged Protectable Interests 17 Register for Wimberly Lawson 38th Annual Labor and Employment Law Update Conference in Knoxville November 2-3 44 Department of Labor Changes Under the Trump Administration 46 Disciplining Inefficiency in the Era of the Apple Watch 50 Health Care Bills Would Provide Limited Relief to Employers 52 SCOTUS Ruling on President Trump’s Travel Ban

Industry News

7 Preview of KYSHRM Conference in Louisville August 29-31 8 Highlights from the 2017 SHRM Conference in New Orleans June 18-21 16 Register for the ARSHRM Employment Law & Legislative Conference in Little Rock September 14-15 19 Register for HRMIDSOUTH Conference & Exposition in Nashville October 1-4 21 Register for the 2017 SHRM Georgia State Conference in Brunswick October 8-10 31 Register for ALSHRM Strategy in the Sand at Perdido Beach Resort September 29 41 Register for 22nd Annual North Alabama HR Management Conference in Florence August 15

SEPTEMBER ISSUE

Employment Law and Employee Benefits Update

September Issue Included in the Attendee Conference Bags at the 2017 ARSHRM Employment Law and Legislative Conference in Little Rock and the ALSHRM Strategy in the Sand Conference at Perdido Beach Resort

a note from the Editor

Caught a photo op with Hank Jackson, President and CEO of SHRM, at the Annual SHRM Conference in New Orleans June 18-21

I am very excited about our August issue because it is brimming with information you need to know about ERISA and retirement planning!

This is a very challenging function for many HR professionals unless you are an expert in employee benefits. There are lots of legal pitfalls and continuous new regulations that you need to be aware of. We are happy to provide an excellent guide to some of the top ERISA and employee benefits attorneys in Alabama, Arkansas, Georgia, Kentucky, Mississippi and Tennessee beginning on Page 32. If your attorney is listed, please let them know you appreciate their assistance. If you are searching for legal assistance in this area, I’m sure you will find the perfect attorney from your area in this special section.

We also have several educational and informative articles on this topic that you will want to study and clip for future reference. There is an article on attorney-client privilege and ERISA by Troy Price on page 12 that provides some great advice on this topic. New regulations and increased fiduciary litigation have led to significant changes in defined contribution plans. Jeanne Fisher walks you though these changes on page 14. Susan Bilbro contributed a comprehensive guide to open enrollment considerations for plan sponsors on page 26. Do not miss the article on the importance of structure in designing a stop loss contract by Kara Spence on page 28!

It’s great to have Laura DeFazio, SHRM-CP, PHR, President of Louisville SHRM on the August cover. You will enjoy reading about Laura’s career and accomplishments on page 6. We are looking forward to covering the 33rd Annual KYSHRM Conference in Louisville August 29-31. This is always a fabulous event! This year the conference is sponsored by the Foundation for a Healthy Kentucky. A few of the keynote speakers include Cathy Fyock, CSP, SHRM-SCP, SPHR. She is the “Business Book Strategist,” and her topic is “And Other Duties as Assigned.” Mary Kelly, President of Productive Leaders, Inc., will speak on “Master Your World: 10 HR Strategies to Improve Your Productivity, Profits and Communications.” Scott Lesnick, President

It was great fun catching up with KYSHRM members during the SHRM Conference in New Orleans. We joined Lynn Ingmire, SHRM-SCP, SPHR, KYSHRM State Council Chair, at the KYSHRM party.

of Successful Business Solutions, will present “Great Leaders: Implementing the Never Give Up Perspective.” We will bring you live updates from the Conference on Facebook, LinkedIn and Twitter. Be sure to follow me on Twitter at @cythomps. This year we will also bring you live video interviews on today’s hot topics from subject matter experts at the conference.

If you are attending the KYSHRM Conference, I hope you will join me on Tuesday for my presentation on “Strategic HR Metrics.” You will earn 1.5 HRCI business recertification credits and SHRM PDCs. I am looking forward to seeing our KYSHRM friends in Louisville, and visiting the home of The Kentucky Derby again! Remember that you do not have to be a KYSHRM member to attend this excellent conference. See page 7 for registration details. While you are on page 7, flip over to page 8 and 9 to see the highlights from the 2017 Annual SHRM Conference held in New Orleans this year. As always, it was a remarkable event with over 15,000 attendees. It was great fun grabbing a photo op with Hank Jackson, President and CEO of SHRM. Mark your calendar now and plan to join us for our monthly webinar sponsored by Data Facts. It will be Thursday, August 24 at 2 PM. We are continuing our series on developing business acumen that we hope will provide lots of business recertification credits for you as well as increase your knowledge and help you make an impact in your organization. Watch your email for details.

Cynthia Y. Thompson, MBA, SCP, SPHR | Editor Cynthia@hrprosmagazine.com www.hrpofessionalsmagazine.com Twitter @cythomps 901.598.0123

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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Laura on the cover

DEFAZIO

LAURA DEFAZIO, SHRM-CP, PHR, President, Louisville SHRM Laura graduated with her Bachelor of Arts degree and Master of Arts in Teaching from the University of Louisville. Laura holds the designations of a SHRM Certified Professional (SHRM-CP) by the Society for Human Resource Management and a Professional in Human Resources (PHR) from HRCI. In 2016, she was named by the Louisville Business First publication as one of the “Top 20 People to Know in Human Resources.”

Laura DeFazio has been an active board member of the Louisville Society for Human Resources Management (LSHRM) for over 5 years. She has held a variety of positions including chair positions, the Director of Hospitality, and is currently serving the second year of her three year presidency commitment.

As LSHRM’s President, she leads the largest chapter in the state of Kentucky, which consists of 14 Directors and Officers and over 600 members. She is also a member of the Kentucky Society for Human Resources Management (KYSHRM).

In 2017, Laura led the effort to rebrand the chapter, including overseeing the development of a new chapter website and the development of a comprehensive marketing strategy. She also has plans to hold a strategic planning session this fall to define the chapter’s strategy as they move into the future to increase growth and better support the HR profession and professional. Laura credits much of the success of her presidency to her LSHRM team of volunteers that inspire her daily with their commitment, innovative ideas, and strong leadership ability! She is humbled and proud to work with such a distinguished group of Human Resource professionals.

Laura is also continuing the work of the groundbreaking Bridging the Talent Gap initiative that LSHRM began in 2016 to help employees recruit and retain top talent in the Louisville area. This past fall, she secured a leading expert to present the Total Internship Management Workshop in Louisville as a workforce solution for the community. The workshop focused on teaching HR leaders how to build a top notch internship and entry talent program at their organizations. In addition to the workshop, she is continuing to build partnerships between area universities and organizations to help connect interns with meaningful internships, and assisting employers with maintaining a pipeline of highly qualified candidates.

Laura has worked at L&N Credit Union in Louisville, Kentucky for over 15 years. She has held a variety of positions and currently oversees the Training and Development function for the organization. She enjoys strategic planning and ensuring the development of staff aligns with the credit unions mission, purpose, and values. In addition, she has created in-house programs for the organization to help identify and develop future leaders as well as train current leaders. Laura also enjoys identifying process improvement opportunities and continuously seeking ways in which to optimize efficiency within the organization.

Since beginning her career at the credit union Laura has seen the company grow tremendously. The credit union has been a great place to learn and grow, and just this year received the prestigious honor of being named the #1 Best Places to Work in Kentucky! 

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Presented by

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12 p.m. | Thu., Aug. 31

And Other Duties as Assigned

Master Your World: 10 HR Strategies to Improve Productivity, Profits, and Communications

Great HR Leaders: Implementing the Never Give Up Perspective

Cathy Fyock CSP, SPHR, SHRM-SCP The Business Book Strategist, Cathy Fyock, LLC

Mary Kelly

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1 Cat Cole, group president of Focus Brands, Inc., was the opening general session speaker on Sunday. Photo by Chris Williams. 2 SHRM Board Chair Coretha Rushing addressed attendees during Monday’s general session. Photo by Chris Williams. 3 SHRM second line march.

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8 4 Ellen Galinsky, senior research advisor at SHRM and president of the Families and Work Institute, reviewed the SHRM Effective Workplace Index at a press briefing. 5 Cynthia and SHRM President and CEO Hank Jackson 6 Patrick Lencioni, founder and president, The Table Group, was the Tuesday general session speaker. He spoke on “The Ideal Team Player.” Photo by SHRM. 7 Alexander Alsonso, Ph.D., SHRM-SCP, SVP of Knowledge Development & Certification at SHRM, discussed the value of SHRM certification. Photo by SHRM. 8 More than 15,000 attended SHRM17.

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9 On Monday tropical storm Cindy arrived in New Orleans bringing drenching rain. Photo by SHRM. 10 Laszlo Bock, advisor, author, and former SVP of people operations, Google/Alphabet, was the general sessions speaker on Monday. His topic was “Work Rules! Insights from Inside Google and Elsewhere to Transform How You Live and Lead.” Photo by SHRM. 11 Wayne Cascio, Ph.D., chair of the SHRM Certification Commission, provided an update on SHRM certification at a press briefing on Sunday. 12 Laila Ali, world-champion athlete, entrepreneur, TV personality, and author was the Wednesday general session speaker. Her topic was “Reinventing Yourself.” Photo by SHRM.

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13 Johnny C. Taylor, future president and CEO of SHRM, attended the general session on Sunday. Photo by SHRM. 14 Scott Richardson, SHRM-SCP, SPHR, and wife from MSSHRM.

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15 & 16 Scenes from ALSHRM Party. 17 & 18 Scenes from SHRMGA Party. 19 Scenes from KYSHRM Party. 20 MSSHRM members.

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TENNESSEE NON-COMPETE LAW: A Continued Focus on the Employer’s Alleged Protectable Interests

By J. GREGORY GRISHAM

TRADITIONALLY, Congress has been the dominate force in the creation of labor and employment law. The exception is in the area of non-compete law. For many years, states, including Tennessee, through legislative activity and judicial rulings have developed their own unique body of non-compete law without federal interference.

Recent state developments Arkansas, Alabama, and Georgia recently enacted statutes governing non-competes that generally promote their enforceability where there is a protectable employer interest and the restrictions are reasonable. By contrast, Illinois recently enacted a statute making non-competes unenforceable against low-wage workers. Other states such as Utah have enacted legislation limiting the duration of non-competes and adding procedural hurdles. There appears to be a clear national trend toward enforcement of non-competes where appropriate as well as a countervailing trend toward limiting the duration of non-competes as well as their application to lower wage/skill employees.

A federal view of state non-compete law In the fall of 2016, the Obama White House and Treasury Department each issued reports critical of non-competes. “[T]he White House issued a ‘Call to Action’ and a report entitled Non-Compete Reform: A Policy Maker’s Guide to State Policies, expressing concern about overuse of non-compete agreements,” particularly with respect to low-wage, low-skill workers and summarizing recent “reform efforts.”

Tennessee non-compete law- “ordinary” vs. “unfair competition” Against this backdrop of recent state legislative activity and the federal critique of non-competes, it is prudent to examine current Tennessee non-compete law.

Unlike some states, Tennessee has not enacted a general statute governing the enforcement of non-competes (although there is a specific statute governing non-competes for certain health-care providers — Tenn. Code Ann. §63-1148). The general rules that govern non-competes in Tennessee have changed

UNLIKE SOME STATES, TENNESSEE HAS NOT ENACTED A GENERAL STATUTE GOVERNING THE ENFORCEMENT OF NON-COMPETES (ALTHOUGH THERE IS A SPECIFIC STATUTE GOVERNING NON-COMPETES FOR CERTAIN HEALTH-CARE PROVIDERS — TENN. CODE ANN. §63-1-148).

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little over the years. Although non-compete agreements are disfavored, Tennessee courts will enforce a non-compete in situations where there is consideration supporting the agreement, where the employer has a protectable interest, and where the non-compete contains reasonable post-employment restrictions. In short, protectable employer interests have been recognized as the provision of specialized training, customer relationships, and confidential information. Tennessee courts scrutinize non-competes to ensure that the employer is not attempting to prevent “ordinary competition.” While not a recent decision, the Tennessee Court of Appeals in Vantage Technology, LLC v. Cross, 17 S.W.3d 637, 644 (Tenn. Ct. App. 1999) succinctly set forth the protectable interest requirement: Considerations in determining whether an employee would have such an unfair advantage include (1) whether the employer provided the employee with specialized training; (2) whether the employee is given access to trade or business secrets or other confidential information; and (3) whether the employer's customers tend to associate the employer's business with the employee due to the employee's repeated contacts with the customers on behalf of the employer. Id. These considerations may operate individually or in tandem to give rise to a properly protectable business interest. [Citations omitted].

Recent Tennessee decisions Two recent decisions from the Tennessee Court of Appeals illustrate the continued importance of protectable employer interests in the enforcement of non-competes.

In Davis v. Johnstone Group, Inc., 2016 Tenn. App. LEXIS 181 (Tenn. Ct. App. 2016) the defendant Davis was a real estate appraiser who signed non-compete agreements with his employer Johnstone Group, Inc. (“JGI”). Davis was initially hired to become a trainee and paid for his own classroom training, a requirement for licensure as a certified general real estate appraiser. Davis then acquired 3,000 hours of practical appraisal experience under the supervision of JGI’s owner who was a licensed certified general real estate appraiser. Davis signed a second non-compete after he became a licensed certified general real estate appraiser in 2005. Davis worked for JGI until 2015 when he resigned to go to work for a competitor. After JGI filed a lawsuit, the trial court declined to enforce the non-compete finding that JGI had no protectable interest to justify the non-compete. The Court of Appeals agreed, noting that the training Davis received was generally

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the same training he would have received at any other appraisal office, citing Tennessee law that “general knowledge and skill appertain exclusively to the employee, even if acquired by expensive training, and thus does not constitute a protectable interest of the employer.” Id. at *17 (quoting Hasty v. Rent-ADriver, Inc., 671 S.W.2d 471,473 (Tenn. 1984)). The Court also noted the critical distinction between “general skills and knowledge of the trade and information that is particular to the employer’s business.” (quoting Selox, Inc. v. Ford, 675 S.W.2d 474, 476 (Tenn. Ct. App. 1984)). The Court of Appeals further agreed with the trial court’s findings that Davis did not have a special relationship with JGI customers, and that there was no JGI exclusive customer list that Davis could use in his new employment. In short, JGI failed to establish that Davis would enjoy an unfair competitive advantage and the non-compete was ruled unenforceable.

Similarly, in Hinson v. O’Rourke, 2015 Tenn. App. LEXIS 685 (Tenn. Ct. App. 2015), the Tennessee Court of Appeals affirmed the trial court’s order denying, among other things, enforcement of a non-compete based on the lack of a protectable employer interest. The employer Hinson was the sole proprietor of “Trivia Time,” which through “trained staff” conducted live entertainment events such as trivia and bingo at various venues. All trained staff, called “DJs,” were required to sign non-competes prior to their training, which consisted of “one-on-one meetings and on-the-job training.” Hinson provided the defendant O’Rourke with a “written script” to be read during trivia games as well as oral information on “how to keep score, microphone training, use of music, methods used with the audience to heighten entertainment, and handling enforcement of the rules.” O’Rourke left Trivia Time after working two years and started his own competing business that provided live entertainment to prior clients of Trivia Time. The Court of Appeals agreed with the trial court’s finding that most of the information and training provided

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to O’Rourke “[were] general DJ skills and knowledge of this industry and other audience interactive industries.” Moreover, even Hinson conceded that training material for “trivia hosting” was available to the public online and that the audience could easily ascertain some of the information provided to O’Rourke through repeated demonstrations. The Court of Appeals further found that there was no evidence to support a finding that O’Rourke was the “face of the business” to the audiences he appeared before while working at Trivia Time.

Conclusion While non-compete law continues to evolve in the various states through legislative activity and case law, Tennessee continues to apply well-established common law rules to evaluate non-compete enforceability. The Court of Appeals’ opinions in the Davis and O’Rourke cases serve as a reminder to employers of their threshold burden to demonstrate one or more protectable interests to justify a post-employment restriction and that “ordinary competition” by former employees based on their general skill and knowledge of the trade cannot be restricted.

J. Gregory Grisham, Attorney FordHarrison ggrisham@fordharrison.com www.fordharrison.com www.HRProfessionalsMagazine.com

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Attorney-Client Privilege and ERISA

By TROY A. PRICE

The attorney-client privilege protects confidential communications between an employer-sponsored benefit plan and its inside or outside lawyers – except when it doesn’t. Those who deal with attorneys on behalf of employer-sponsored benefit plans should be aware of the fiduciary exception to the attorney-client privilege, and what the exception means for some communications with counsel.

FIDUCIARY EXCEPTION BASICS There are unique rules relating to the attorney-client privilege in the context of employersponsored plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). This is so because ERISA is modeled on the law of trusts. Like trustees, the employer-sponsors of such plans may be fiduciaries with respect to the plans, while the employees are treated as beneficiaries.

A fiduciary is one who is charged with acting in the best interests of another person, who is often known as the beneficiary. This relationship impacts the attorney-client privilege when the interests of employer-sponsor and employee-beneficiary diverge.

This exception is most important when self-funded ERISA plans are involved. In such cases, the employer typically is the plan administrator under ERISA. Plan administrators have fiduciary duties to employees. Two rationales are cited for the fiduciary exception to the attorney-client privilege: first, when an attorney provides advice regarding plan administration, the attorney’s clients are deemed to be the plan beneficiaries, not the plan administrator; second, as a fiduciary, a plan administrator has an obligation to provide full and accurate information to the plan beneficiaries regarding administration of the plan.

Some courts hold that the fiduciary exception to the attorney-client privilege applies only to communications that involve plan administration. These courts reason that when a plan fiduciary retains counsel in order to defend itself against plan beneficiaries, the privilege remains intact. Under this view, the privilege is in place when the plan administrator is no longer acting on behalf of a beneficiary, but in its own interest.

WHEN INTERESTS DIVERGE Whether the privilege covers communications between the plan administrator and its attorney becomes most important if some benefit is denied in whole or part and the employee-beneficiary files suit. Then the plaintiff employee would likely seek to obtain all communications with counsel through some form of discovery in the litigation process. That was the case in Carr v. AnheuserBusch Companies, a case decided by a federal trial court in the Eastern District of Missouri. The case provides context for how privilege issues might arise and the fiduciary exception might apply.

In the Carr case, a former employee sued under ERISA after the employer denied him benefits under its severance plan. During the discovery process, the former employee sought all documents relevant to the benefit denial – the “administrative record” of his claim. The employer claimed the right to withhold certain emails sent and received during the claim processing in accordance with the attorney-client privilege. The former employee argued that the emails had to be produced under the fiduciary exception to the attorney-client privilege.

The court in Carr began its analysis by pointing out that both the attorney-client privilege and the fiduciary exception to that privilege were well established. Accordingly, said the court, it was necessary to determine whether the particular communications at issue involved plan administration in a general way, or a specific attempt by the employer to defend itself against the former 12

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employee’s claims. The attorney-client privilege would protect the latter species of communications but not the former.

The Carr court observed that both the content and context of a communication must be evaluated to determine whether it concerns a matter of plan administration or legal advice for the fiduciary’s own benefit. “Frequently,” said the court, “the key question is whether the communication was made before or after the decision to deny benefits.” Courts generally reject a claim of privilege for communications made before a claim is denied.

WHEN PRIVILEGE APPLIES A more difficult question is presented by the issue of whether the privilege applies to communications made after an initial benefit determination but before an appeal to the plan administrator is completed. In Carr, after privately examining the documents, the court found that an email from the defendant’s associate general counsel to the plan administrator concerning “guidance” for handling the appeal was not protected by the privilege because it concerned plan administration. By contrast, emails from the same in-house counsel regarding the contents of the final denial letter were found to “relate to the substantive merits of plaintiff’s individual claim and the content of the final decision letter denying his severance benefits, not advice as to the procedural duties owed to each beneficiary.” This type of communication was protected by the privilege. The decision by the district court regarding privilege was later affirmed by the United States Court of Appeals for the Eighth Circuit.

It is important to note that some actions by an employer, such as decisions on whether to amend or terminate an employee benefit plan, are not considered to be fiduciary in nature.

Communications with counsel regarding such decisions have been held to be protected from disclosure because the employer is plainly acting on its own behalf as sponsor of the plan, not on behalf of plan beneficiaries. For instance, in Bland v. Fiatallis North America, Inc., the United States Court of Appeals for the Seventh Circuit considered whether a company had promised lifetime health benefits to its workers in earlier versions of its plan documents. Plaintiffs were former employees who sought to explore the advice the employer received from attorneys regarding termination of benefits. The appeals court held that the fiduciary exception to the attorney-client privilege did not apply.

The court explained as follows: “An employer acts in a dual capacity as both the manager of its business and as a fiduciary with respect to unaccrued welfare benefits, is free to alter or

eliminate such benefits without considering employees’ interests and does not owe its employees a fiduciary duty when it amends or abolishes unaccrued benefits.” The court concluded that decisions relating to amendment or termination of a plan are not fiduciary decisions, thus the fiduciary exception to the attorney-client privilege does not apply.

was made before or after a benefit determination.

It is more likely that the exception to the privilege will apply if the communication was made before the benefit determination.

On the other hand, when an insurance company has power to decide benefit claims it acts as a fiduciary under ERISA and the fiduciary exception to the attorney-client privilege applies, according to the Ninth Circuit Court of Appeals in Stephan v. Unum Life Ins. Co. In that case, the appeals court stated that there was no privilege applicable to the insurance company’s communications with its attorneys because the “duty of an ERISA fiduciary to disclose all information related to plan administration applies equally to insurance companies as to trustees.” The court noted that ERISA has broad disclosure requirements, and also requires employee benefit plans to afford a “reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the benefits.” The court also pointed out that regulations implementing the statute require that, upon request, a claimant be provided information relevant to the claim for benefits.

In practical terms, it may be impossible to administer an employee benefit plan without guidance from in-house or outside counsel. The point is to be aware that there is an exception to the attorneyclient privilege that applies when the employer or plan administrator is acting in a fiduciary capacity – that is, administering the plan in the most basic sense. Communications with counsel should be executed with the awareness that they may be subject to exposure to an employee-claimant. Both the attorney and the human resources professional should take note of the possibility of subsequent disclosure and govern themselves accordingly.

THE CASE OF SELF-FUNDED PLANS As to self-funded plans, the practical effect of the fiduciary exception to the attorney-client privilege is this: those who work with or for the plan administrator must assume that, in the event of a benefit dispute, an attempt will be made to obtain communications that otherwise would be subject to the attorney-client privilege. These communications may come from in-house counsel or outside counsel. An employee claiming benefits may contend that such communications are properly part of the administrative record of his or her claim.

In deciding whether the privilege applies, a court may examine the documents in camera (in chambers without disclosing them to the party seeking them until and unless a decision is made that the documents are subject to discovery). Some courts have said they must consider both the content of the documents and the context in which they were generated to make this decision. One factor the court may consider is whether the communication with an attorney

Troy A. Price, Partner Labor & Employment Team Wright Lindsey Jennings TPrice@wlj.com www.WLJ.com

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How (and why) 401(k) Investment Offerings are (or should be) Changing

By JEANNE J. FISHER

Recent regulation (i.e. the DOL Fiduciary Rule) and increased fiduciary litigation has led to significant changes in Defined Contribution Plans.

Service standards, fee structures and the very make-up of the industry is evolving daily.

With the entire industry in a state of upheaval, I venture to say that no one (or nothing) is experiencing the swift kick of change quite like 401(k) investment lineups. In my opinion there are three big areas where changes are likely to appear over the next 3 – 5 years.

Index Funds are Forcing Active Funds Out As of 2015, index funds dethroned active funds and represented more than half of the assets invested in public pension funds. The 401(k) market is following suit with the use of index funds growing 30% in the last 6 years.

This according to Morningstar, an investment research firm based out of Chicago. A whole slew of reasons contribute to the rise of index funds, but according to a recent survey by Cerulli Associates, 57% of plan sponsors who adopted passive funds did so to “alleviate threat of lawsuits/fiduciary concerns.” Let’s break down why index funds are considered by some to be the more prudent choice. a. Performance History and Benchmarking – Plan fiduciaries and investment advisors monitor a fund’s performance by comparing it to a benchmark. Historically, the majority of active funds (somewhere between 80 and 90%) underperform their respective benchmarks.

Morningstar tracks historical performance with their Active/Passive Barometer. When a fund underperforms, the committee must place it on a watch list or eliminate the fund. If it represents a vital asset class they then have to find a replacement. Plan participants must be notified of the upcoming fund change 30 days in advance of the actual change. The entire process is cumbersome, administratively difficult and requires extensive documentation and decision-making by committee members. By definition, an index fund is designed to track a benchmark. While index funds can certainly fail other metrics that fiduciaries should be monitoring, we can potentially significantly reduce the risk of underperformance by holding funds specifically designed to match the index. b. Cost – Index funds do not require the human element associated with active funds, thus their internal expenses can be considerably lower. A primary fiduciary duty is to ensure that all plan fees and expenses are reasonable. Considering index funds are often a fraction of the cost 14

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of an active fund, coupled with their historical performance referenced above, one must be ready to defend selecting an active fund over a passive fund. Expense ratios of each fund will be disclosed on the firm’s 404(a)(5) Participant Fee Discloser. c. Style Drift – Each fund is assigned an asset class, which for lack of a better word, denotes an investment category.

Large Cap Equity, Real Estate, and Government Bonds are examples of asset classes. Fiduciaries are responsible for providing their plan participants with a diversified lineup, and most advisors do so by ensuring a variety of asset classes are represented. Active funds can drift from their original asset class, making it more difficult for the fiduciaries to monitor. Index funds stay tried and true to their asset class and will not drift into a different style box. It is important to note, however, that diversification alone cannot ensure a profit or protect against a loss. d. Revenue Sharing – The act of ‘sharing’ revenue between service providers was, and could still be, very common in the retirement plan industry. Mutual funds used to share revenue with everyone from the advisor, to the recordkeeper and TPA. Back in 2012, the Department of Labor issued their Service Provider Disclosure Requirements under section 408(b)(2) and section 404(a)(5). These requirements provided the transparency necessary for plan fiduciaries to identify who was being paid what and how. Now with the Department of Labor rule putting even more liability on the advisor, eliminating the conflict of interest created by revenue-sharing is a must. While not all active funds engage in revenue sharing, many do. Plan fiduciaries can make an effort to avoid this issue altogether by choosing a lineup of index funds.

Open-Architecture Platforms Historically, Defined Contribution plans were sold with a pre-determined list of available investment options. More often than not, that list was limited to funds managed by the recordkeeper. For example, a Fidelity 401(k) would only offer Fidelity Mutual Funds. An “open-architecture” platform is where the recordkeeper has opened up the contract to a variety of other fund

managers - even competitors. Today it is very common to see Vanguard Funds in a Fidelity 401(k) or American Funds in a John Hancock 401(k).

Most advisors have embraced the open-architecture platform for their flexibility and increased competition. However, there are still plans out there on old group contracts. At this point, an open-architecture plan is no longer just the preferred course of action—it is an absolute necessity. I cannot imagine a plan fiduciary trying to defend a plan with significant restrictions on fund availability when open-architecture options are so readily available.

Institutional Share Classes Finally, plan fiduciaries are focusing on share classes and driving line-ups toward the cheapest share class available. As with almost anything else in the world, 401(k) investors can possibly benefit from economies of scale.

The theory is simple: the more you buy, the lower the incremental price for everyone. Investors in 401(k)s are a part of a larger pool of money, thus giving them greater buying power when purchasing investments.

The same mutual fund can have a dozen different share classes. As an example, let’s consider the American Funds Growth Fund of America. All of the investors have bought into the same strategy and model, but they all can be paying different expense ratios. You can liken this to passengers on an airplane. They are all traveling to the same destination, at the same speed, but those passengers in first class have paid more for their ticket. If the fund’s share class isn’t monitored properly, you may find Retail Share Classes inside a 401(k) plan that qualifiy for the much lower-cost Institutional Share Class.

In my own reviews of case law, I’ve found this has been a common complaint by the plaintiff. Finding retail share classes, often denoted by an “A” or “B” after the fund name, are the first indicator that the 401(k) plan is outdated and may not have the level of oversight it should.

LET’S TALK ABOUT THE “F” WORD...

F

Y R A I C IDU

Designing an investment line-up for a group of people is significantly more complicated than choosing investments in your own portfolio. Decisions must be made through a fiduciary ‘lens’, with the retirement committee and advisor leaning heavily on the Prudent Man Rule.

In my opinion, it would sensible for Plan sponsors and administrators to choose advisors with specific knowledge and experience of the Retirement Plan Industry to help guide them through this process.

References: • http://ww2.cfo.com/retirement-plans/2016/06/passive-investmentaggression/ - % of passive funds and growth in DC Plans. Also research from Cerulli Associates.

• https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/ resource-center/fact-sheets/final-regulation-service-provider-disclosures-under-408b2.pdf 408b2 Fact Sheet

Jeanne Fisher, CFP®, CPFA, MBA ARGI JeanneFisher@argi.net www.argi.net

Jeanne is a financial advisor with ARGI Investment Services. She specializes in retirement plans and designs, manages and consults on a variety of retirement plans for clients all across Kentucky. Respective services provided by ARGI Investment Services, LLC, a Registered Investment Advisor, ARGI CPAs & Advisors, ARGI Business Services and Advisor Insurance Solutions. All are affiliates of ARGI Financial Group.

Join Jeanne Fisher, CFP,® at the KYSHRM Conference on August 30th to learn how the DOL Fiduciary Rule will affect your company’s 401(k) plan.

Visit our booth to learn more about our Corporate Services: Corporate Benefits Education Business Retirement Plan Services 401(k) & Fiduciary Services Executive Financial Planning Outplacement & Transition Financial Services

WWW.ARGI.NET | 866.568.9719

Respective services provided by ARGI Investment Services, LLC, a Registered Investment Adviser, ARGI CPAs & Advisors, PLLC, ARGI Business Services, LLC, and Advisor Insurance Solutions. All are affiliates of ARGI Financial Group. www.HRProfessionalsMagazine.com

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HOT TOPICS FOR 2017 Washington Outlook with SHRM’s Mike Aitken EEOC Updates and Recently Issued Guidance Fiduciary Rule Recognizing & Resolving Impairment Issues in the Workplace …… AND MORE!

MIKE AITKEN FRIDAY KEYNOTE

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September 14 14--15, 2017 DoubleTree by Hilton Hotel of Little Rock 16

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17

Size Does Matter

By KERSTIN NEMEC and TIM NORWOOD

Often under analyzed and underestimated, the size of one’s wages plays a critical role in how health benefits are utilized. Wages are often overlooked in efforts to maintain benefits offering equality. The impact is plans designed that are inefficient for the employer and ineffective for the employee. Managed thoughtfully, low-wage employee health/well-being can have significant impact on business results.

What Do We Know?

• Low wage earners (<$40k annually) make up 62% of the US workforce.

• Low wage earners have the second highest healthcare costs after high wage

• Wage stagnation and benefit costs growth are making healthcare less affordable for all employees.

earners. The difference is high wage earners use the most preventive services while low wage earners use more emergency room and in-patient services.

• The rise in deductibles has been most significant with 84% of employers offering CDHPs and over 30% that have fully replaced traditional plans with HDHPs.

• The top two determinants of health status are socioeconomic status (40%) and lifestyle (30%).

• More sophisticated services, benefits (HSAs, Catastrophic coverage) and other incentives seem less likely to be useful when provided to low income earners.

• Low-wage employees have the highest prevalence of unhealthy behaviors and chronic conditions and the highest proportion of healthcare costs as a percentage of wages. This is primarily due to prioritizations of health concerns relative to other life priorities, health literacy, healthcare consumerism engagement and patterns of healthcare use.

• Combined premiums and deductibles are now approaching 25% of earnings for low wage earners.

Current benefits policy/practice directions will only continue to make the situation worse for low wage employees leading to increased stress levels, decreased employee health and workplace performance.

So what options are out there for consideration?

• Wage-based premium subsidies • Wage-based deductibles or OOP maximums • Gap plans • Outcome based incentives

Your Resource for Legal Innovation and Inspiration Customized Management Training Compliance Audits Policy and Strategy Analysis Litigation Defense Global Mobility Labor Negotiation www.bakerdonelson.com THIS IS AN ADVERTISEMENT. Ben Adams is Chairman and CEO of Baker Donelson and is located in our Memphis office, 165 Madison Avenue, Suite 2000, Memphis, TN 38103. Phone 901.526.2000. ©2017 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

These options can take substantial time to evaluate and implement. There is one solution however that can be easily integrated and implemented into a company’s

benefit strategy that can greatly impact lower wage employees.

The solution is offering education and enrollment services for State Sponsored Health Insurance Plans such as Medicaid.

While these plans were initially created for the disabled, pregnant women and children well below the poverty level, the Affordable Care Act expanded the states abilities to offer these plans to working adults aged 19-64. These plans have now grown to cover one in five Americans – over 74 million people. These plans have also become largely managed by private insurers.

In expanded states, State Health Insurance Plans are now a mainstream alternative that provides for the needs of many lower wage earners much more efficiently and effectively than employer coverage. The quality of the coverage is comparable to private coverage, as networks and providers are often the same.

Low wage workers use healthcare differently from other enrollees. Employers need to better understand employee health barriers and opportunities based upon the size of their wages and craft strategies and plans to best address. Doing so could have a profound impact on business performance and employee retention without increasing overall healthcare spending.

Kerstin Nemec President Med-Enroll, Inc.

Tim Norwood Executive Vice President Med-Enroll, Inc.

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19

One Minute Mentoring: How to Find and Work With a Mentor- and Why You’ll Benefit from Being One

BY WILLIAM CARMICHAEL

INTRODUCTION When I was given the opportunity to select one of three books for this months’ review, I did not hesitate. This is not to say that the other two were not worthy of a review. They are. But the book I chose, One Minute Mentoring: How to Find and Work With a Mentor- and Why You’ll Benefit from Being One by Ken Blanchard and Claire Diaz-Ortiz just hit home with me and for good reasons. First, anything by Ken Blanchard is worth a read. And the second reason is entirely personal. His original “The One Minute Manager” coauthored with Spencer Johnson in 1982 was the first time I realized that as an HR person it was OK to ‘cut to the chase’ and especially when dealing with employees. Regardless of whether I was helping someone set goals, praising performance or handling reprimands, that particular book taught me to say what you need to say and move on!

Now, Blanchard and a former a former Twitter executive join forces to develop an extremely useful guide to creating powerful mentoring relationships. As most professionals would agree that having a mentor is a good thing, the problem is they don’t know how to find or use one.

And despite widespread approval for the idea of being a mentor, most people don’t think they have the time or skills to do so. The fact is that positive mentoring relationships can change the way we lead and help us succeed. In One Minute Mentoring, Blanchard and Diaz-Ortiz combine their knowledge to provide a systematic approach to intergenerational mentoring, giving readers’ tremendous insight into the power and influence of mentoring and encouraging them to pursue their own mentoring relationships. Using Blanchard’s classic parable format, our coauthors explain why developing effective communication and relationships across generations can be a tremendous opportunity for companies and individuals alike.

WHY THIS IS A MUST-READ Each of us at one time or another has needed help and guidance from an experienced person we trusted to give us sound advice and counseling with our careers. To us, we welcome their advice.

And for that experienced person, sharing what they know is quite an honor. Too often though, those mentoring relationships tend to be either short-lived, meaning only a first or second discussion is ever made, or transitory, you catch-up with that person when both schedules allow.

This unfortunately has become the norm but it does not necessarily have to be as our co-authors will attest to. And without meaning to, we often confuse the subtle differences between coaching someone versus mentoring them. The authors wisely address this by clarifying that “Coaching, for all intents and purposes is short term with a focus on task related goals whereas mentoring focuses on the big picture.”

Readers will not find long, complex academic theories but rather practical, useful information that is distilled and applied to a simple parable. Here, our co-authors tell the story of Josh, a twenty-seven year old sales associate whose career has stalled and Diane, a high-performing sales executive nearing retirement. Both need help in deciding their next move but through a mutual acquaintance come to realize they not only need each other but perhaps more importantly, can help mentor one another. Another point worth mentioning here relates once again to the real difference between coaching and mentoring. Josh is not looking for advice on closing a sale, which Diane certainly could provide. Instead, Josh needs someone to hold him accountable for career decisions he needs to make and just as important, for being available to meet with Diane on a regular basis. In doing so, Diane regains a sense of purpose. Josh, in turn, is soon given the opportunity to mentor someone else. Mentoring at its very essence!

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STRUCTURE, LAYOUT, AND CONTENT Those familiar with previous ‘One Minute’ books will again see a familiar look and feel to it. This simple genre, regardless of its repetitive nature, serves a valuable purpose; that of driving needed points home quickly. Early on, in the Introduction, the authors clearly inform the reader of the book’s intent- how to find and use a mentor; and how to be a good mentor.

In a thoughtful, engaging way, the authors outline a systematic approach to intergenerational mentoring.

Blanchard and Diaz-Ortiz explain why developing effective communication and relationships across generations can be a tremendous opportunity for both individuals and organizations.

Structured in two parts, One Minute Mentoring is a quick read that most can compete in a weekend at the most. Conveniently enough, the mentoring steps are spelled out in the mnemonic: M ission / Creating a vision and purpose for the mentoring partnership E ngagement / Agreeing on ways to engage that work for both personalities and schedules Network / Expanding productive relationships T rust / Being truthful, staying connected and being dependable for one another O pportunity / Creating opportunities for both to grow R enewal / Scheduling a regular time to review progress The book concludes once again with a very short chapter dealing with coaching versus mentoring.

As the authors note, although mentors do use some coaching skills, mentoring is greater in breadth and depth, encompassing skills such as being a role model, consulting, brokering, and advocating. And holding the mentee accountable for the future actions they take or do not take is very much at play here. An investment is made in one another.

What I also liked about the book is that each of the short 18 chapters concludes with a One Minute Insight which implores the reader to pause, reflect, and learn. The brief focused chapters with their summarizing insights and the overall brevity of the book makes it easily digestible.

Ken Blanchard, PhD, is among the most influential leadership experts in the world and a prolific business writer having co-authored sixty books. Co-author Claire Diaz-Ortiz is an author, speaker, and technology innovator who has been named one of the 100 most creative people in business by Fast Company.

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

Five Actions to Take If Your Applicant Fails a Background Check

By DAVID ESTEL

HR

Professionals know the importance of finding the most qualified person to fill their positions. Weeks, or even months, of time spent recruiting, scouring resumes, and interviewing may yield the seemingly perfect candidate, only to find unacceptable information during the background screening process.

Perhaps their criminal history shows a recent felony conviction, or their employment verification shows a discrepancy in their work history, or they have misrepresented their education.

Maybe they have left off areas they previously lived to hide aspects of their past they would rather not discuss. Or maybe their drug test came back positive, and your company offers a zero-tolerance policy on that matter.

 Make a final decision.

Every piece of the information you have gathered about the job seeker, along with the interview process and application review of qualifications, helps you ascertain whether or not to hire this person. Take all you have learned about the candidate and formulate your final decision. If you decide to hire the candidate move forward with the offer and the onboarding process as usual. If not...

If any of these, or any other troubling information, shows up on their employment screening report, the last thing employers should do is nothing. Avoiding or ignoring the candidate with no explanation is bad business, and can get you sued. There are certain steps to take if a person's background screening report returns information that causes a pause in hiring them, and failing to take them can set employers up for costly hiring lawsuits. The Fair Credit Reporting Act requires certain actions be taken to maintain a fair, compliant hiring process.

 Send them a final notice adverse

Whatever the reason, here are five actions to take if your job candidate doesn't pass a background check.

Give proper time between the “Pre-Adverse Action” letter and the final letter. A fivebusiness day timeframe is what is recommended. There have been recent lawsuits by job candidates who were only given a three-day window, so don’t get in a hurry and send the final notice out too soon.

 Send a pre-adverse action letter.

When employers decide against hiring someone based on whole or in part on the candidate's background check report, the FCRA requires that employers notify the applicant, and send him/her a pre-adverse action letter. This lets the person know there was something in their report that is negatively affecting their chances of being hired by you. Include a copy of the background report as well as a "Summary of Your Rights Under the Fair Credit Reporting Act." It is within the candidate's rights to dispute the information reported through the background screening company.

 Give them a chance to explain.

HR professionals and hiring managers must note that employment screening practices are not an exact science that yields 100% accurate results. Information in a background check could possibly be inaccurate because of a misspelled name during the ordering process, a date of birth entered in error, an error from the county clerk, or many other factors. Talk with the candidate about the issue, and give him or her a chance to explain. Make notes of the date the conversation took place, who participated, and what was discussed, and add them to the job candidate’s file. By hearing their side, companies are better able to see the entire picture and make a non-biased, fair hiring decision.

action letter.

Employers are required to send a "Notice of Adverse Action." This lets the candidate know the information in their background report adversely affected them being hired.

HR Professionals must walk the line between onboarding their job candidates fast with properly checking their criminal history, verifying their employment history, and confirming their education claims. And all of this must be balanced against opening your company up to the risk of a hiring lawsuit.

These five actions are integral as part of company employment screening practices for HR professionals to follow in order to maintain a compliant hiring process that is fair. With hiring litigation and discrimination claims on the rise, companies need these types of policies in place to avoid lawsuits while still maintaining a safe, productive workplace.

 Objectively review the entire picture.

Take the information in the employment screening report, the candidate's response, and the position being hired for under advisement. Weigh each piece of information carefully against the other, and against your hiring policy, before reaching your conclusion. All this leads to the best hiring decision for your company and the candidate and lessens the chances of dealing with discrimination litigation from disgruntled applicants.

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David Estel National Account Executive Background Screening Data Facts, Inc. destel@datafacts.com www.datafacts.com

Kentucky Top Employee Benefits Administrators

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 201 at the KYSHRM Conference!

Join us in Room B8 at 1:15 on Thursday, August 31st for “The Affordable Care Act: Where Are We Now?”

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The Power of Culture Change: Our City of Memphis HR Strategy

By ALEX SMITH

T

There are many stereotypes about government, you’ve heard them, “it is bureaucratic…slow…political.”

Despite the myths and perceptions, government is also a Multi-Million dollar enterprise with thousands of employees. For the City of Memphis; we have a revenue of $680 M and 6500+ employees - the same as many large-size private sector companies.

However, even with our size and revenue, many do not see the City of Memphis as a major employer; instead they see it as more traditional government.

Under Mayor Strickland’s Administration, our goal is to change this perception.

Since coming into office in January 2016, our mission has been to transform city government to a resident (customer)-centric organization focused on "improving the quality of life of Memphians, every day." We provide services in one of the largest per square mile municipalities in the country that benefits a very large customer base of almost 660,000 Memphis citizens, more than 1.3M metro-residents, and more than 12M visitors per year. Employee engagement is directly tied to productivity and other important metrics to drive efficiency in our operations and serve our customers. Peter Drucker’s famously attributed quote that “Culture eats strategy for lunch” absolutely applies in the public sector just as much as the private sector.

To aid in shifting the perception and performance of the City’s government, we have taken an inside out approach -- focusing our attention on culture change and placing emphasis on new values centered on innovation, collaboration, accountability, and service.

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We first began our culture work with our organizational structure.

When coming into office, Mayor Strickland was intentional and wanted a new leadership model for the City to help him have more line of sight and better collaboration across key areas. The Mayor established a “c-suite” model where he placed six senior executives (Chief Operating Officer, Chief Communications Officer, Chief Legal Officer, Chief Human Resources Officer, Chief of Police Services, and Chief Financial Officer) reporting directly to him and functioning as a senior leadership team working together to implement his vision. This model was very different from other administration models that had a Chief Administrative Officer who led all the division directors, creating a layer between the Mayor and all the divisions. Our experience with the new c-suite model is that this flatter org structure has been pivotal in fostering collaboration, adaptability, effective communication, information sharing, and enabling issues to be presented and resolved in real-time. This organization design change has been a catalyst for culture change. We now have more partnership, collaboration and crossfunctional projects across divisions, enabling us to achieve amazing results. For example, in March 2017 HR and MPD strengthened their partnership and, together, were able to hire the largest police recruiting class in the last seven years.

While focusing on top leadership is an important place to start, we quickly realized that true culture change starts from the bottom up, thus making it critical that we focus on overall employee engagement to see a true culture change. Like any good HR person, we started the employee engagement work with engagement surveys and focus groups, quickly discovering that our major barrier in achieving culture change was being halted in two areas – eroded trust and employees not feeling valued. From there a powerful talent management strategy was born focused on four key areas:

1. Paying competitively for amazing performance

2 Keeping employees well and safe

3. Developing and growing employees

4. Creating an inclusive and equitable work environment

Our strategy around growing and developing employees is particularly important in our value proposition for attracting and retaining talent. My number one goal as the new HR leader for the City was to lower commissioned officer turnover. From 2013 to 2015, turnover for commissioned officers increased by 60% (from 115 in 2013 to 185 in 2015). This police turnover was a result of building frustration within MPD due to the lack of manpower, promotions and significant benefit changes that were made to tackle Other Post Employment Benefit Obligations (OPEB), and other benefit challenges that many public sector entities are facing. Our benefits are still very competitive compared to many entities, but still innovation and communication was needed to help support our talent and culture strategies. To do this, we employed many strategies from appreciation events, enhanced compensation, increased wellness incentives, enhanced retiree health insurance subsidies, as well as increasing our tuition reimbursement program, but with our challenges, I felt strongly that we needed more innovation.

We know that professional development and degree attainment is important to our workforce. This combined with the fact that according to the Federal Reserve Bank of St. Louis, student loan debt in Memphis grew by 5% in 2016, led me to look for a compelling solution to help our employees manage student loan debt in a new way. In

the spirit of innovation, and taking a new look at old problems, we were able to partner with Tuition.io in offering a student loan reduction program, becoming the first municipality in the US to offer this benefit.

This benefit has helped our employees with their student loan debt lessening their financial burden, therein demonstrating that we are an employer who listens and cares, not to mention our recruiting numbers have increased since this new benefit offering was announced, which helps us attract new interest in public service. Overall, these examples show that innovation plus culture strategy equals magic for an organization. The decision to fully embrace innovation and culture change holistically across all areas has been an important one to aid us in our journey of â&#x20AC;&#x153;making life better for Memphians, every day.â&#x20AC;?

Alex Smith Alex Smith is currently the Chief HR Officer for the City of Memphis. She is a career HR professional with notable HR management experience from Microsoft Corp and Target Corp. The City of Memphis partners with firms such as HRO Partners to support and drive HR Strategy.

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Open Enrollment Considerations for Plan Sponsors

By SUSAN K. BILBRO

With fall approaching, the general populace is preparing for crisp weather, the return of football and pumpkin-spiced everything, but employers with calendar year benefit plans are preparing diligently for open-enrollment season: the period of time when employees may elect or change the benefit options – such as medical, dental, vision, and life insurance – available from their employers. While there is a lot to consider, here are three questions plan sponsors should ask themselves as they start preparing for a successful open enrollment process for 2018.

Are You Including the Right Disclosures in Your Open Enrollment Materials? ERISA has multiple participant disclosure requirements that apply to plan sponsors at the time of eligibility or enrollment and periodically thereafter for employee welfare benefit plans. The following is a brief description of some of the key items required to be provided at least once annually and/or specifically during open enrollment: a. Summary Plan Description (SPD). An SPD is designed to inform participants of their benefits, rights and obligations under the plan and to describe how the plan operates. It should also include a notice of grandfathered health plan status if the plan is believed to be “grandfathered” under the Patient Protection and Affordable Care Act (ACA), as well as the patient protections notice required by the ACA. The current SPD and any summaries of material modifications (which document material changes to the plan between updates to the full SPD) must be provided to each participant within 90 days of enrollment in the plan. Many plan sponsors choose to provide this as part of the open enrollment process. b. Summary of Benefits and Coverage (SBC). The ACA requires group health plans to provide a standardized summary of benefits and coverage available under each applicable group health plan benefit package, and the SBCs must be provided to individuals as part of annual open enrollment. New SBC templates for use during annual open enrollment periods beginning on or after April 1, 2017, are available on the Department of Labor (DOL) website. c. General COBRA Notice. Participants and their covered family members must be given notice of their right to purchase a temporary extension of group health plan coverage when coverage is lost due to certain “qualifying events” under COBRA. The notice must be provided to each covered employee and covered spouse no more than 90 days after group health plan coverage begins, but many plan sponsors include this as part of their enrollment materials. The current model general COBRA notice is available on the DOL website. d. HIPAA Notice of Privacy Practices. A group health plan subject to HIPAA privacy rules must provide a notice describing the uses and disclosures of protected health information (PHI), as well as the individual’s rights and the plan’s duties with respect to that PHI. This notice must be provided to new enrollees in the health and welfare benefit plans at the time of enrollment. Thereafter, a notice of the availability of the HIPAA privacy practices notice is required at least once every three years; many plan sponsors include the notice of availability in the annual enrollment materials in order to ensure compliance.

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e. Notice of Special Enrollment Rights under HIPAA and Children’s Health Insurance Program Reauthorization Act (CHIPRA). Certain individuals have the right to enroll in a group health plan upon the happening of certain events (and under certain circumstances) such as the loss of other coverage or gaining a new dependent through marriage, birth, adoption or placement for adoption. A notice describing these rights must be provided to each eligible employee at or before the time the employee is initially offered the opportunity to enroll in the group health plan. f. Notice Regarding Premium Assistance under Medicaid or CHIP. If an employee resides in a state in which medical premium assistance is or may be available under that state’s Medicaid or CHIP program, that employee (regardless of his or her medical plan enrollment status) must be provided notice of this opportunity annually. Many plan sponsors choose to distribute this with their open enrollment materials. This model notice is updated by the DOL once or twice a year, so plan sponsors should visit the DOL website before distributing the notice to ensure the most current notice is being used. g. Women’s Health and Cancer Rights Act (WHCRA) Notice. This annual notice describes the requirement under WHCRA that a group health plan providing mastectomy benefits must also provide coverage for breast reconstruction, prostheses, and physical complications in connection with the mastectomy. h. Medicare Part D Notice of Creditable Coverage. Employers that provide prescription drug coverage to Medicare Part D eligible individuals must notify these individuals annually, before October 15, whether the drug coverage they have is creditable or non-creditable. If an employer mails annual enrollment materials by this deadline, this notice could be included with the other enrollment materials. A sample notice and related guidance is available on the Centers for Medicare and Medicaid Services website.

Is Your Cash in Lieu of Benefits Payment Program Compliant? As the cost of healthcare rises, some plan sponsors are choosing to offer cash payments to employees who decline employer-sponsored health coverage (called an “opt-out arrangement”), but employers need to know that there are both excise tax and affordability issues to consider in how such programs are structured. a. Excise Tax. The IRS has made clear that an “employer payment plan,” under which an employer reimburses an employee for some or all of the premium expenses incurred for individual health insurance coverage or uses its funds to directly pay the premium for individual health insurance coverage will not comply with ACA market reforms. Because they are not in compliance, they may be subject to a $100/day/applicable employee excise tax. However, according to IRS Notice 2015-17 and subsequent proposed regulations, if an employer increases an employee’s taxable compensation, such as through an opt-out arrangement, but does not condition the payment of the additional compensation on the purchase of health coverage, this arrangement is not an employer payment plan, and does not require compliance with the ACA market reforms.

b. Affordability Calculations. In addition to market reform concerns, an opt-out arrangement may also need to be included in the calculation to determine whether coverage offered by the employer is “affordable” for purposes of the ACA’s employer mandate. Under the current proposed IRS regulations, an applicable large employer (with 50 or more full-time and full-time equivalent employees) must include the amount of any potential cash payment in lieu of benefits in its affordability calculation, unless the opt-out arrangement qualifies as an “eligible opt-out arrangement.” An “eligible opt-out arrangement” is one in which an employer offers cash in lieu of insurance if the employee provides reasonable evidence of enrollment in other employer-sponsored coverage (such as a spouse’s plan) or evidence they will have minimum essential coverage (other than an individual market coverage plan) during the plan year for themselves and their expected tax dependents. Reasonable evidence may include an annual signed statement by the employee that they are (or will be) enrolled in appropriate health coverage to qualify for the opt-out payment.

What Do You Need to Know (and Tell Employees) About Your HSA? Health savings accounts (HSAs) have been around for several years, but they continue to be a source of confusion for employees and occasionally plan sponsors. A few things to keep in mind when utilizing an HSA are: a. Limits for 2018. The contribution limits for individual accounts are $3,450 for 2018 and $6,900 for family coverage.

c. Interaction with FSAs. Employees covered under a general purpose health flexible savings account (FSA) are ineligible to contribute to an HSA. If a plan sponsor has a general purpose health FSA with a grace period or permits carryover of up to $500 in unused funds from the prior year, this may impact the eligibility of an employee to participate in an HSA in the subsequent year. For example, if an employee participates in a general purpose health FSA in year one, and that FSA has a grace period for the first two-and-a-half months of year two, the availability of general purpose health FSA funds during the grace period is disqualifying coverage, and will make someone ineligible to contribute to an HSA during those months. In order to be able to contribute to an HSA during those first three months of year two, the health FSA balance must be $0 on December 31 of year one. Even if there is a small amount left at the end of year one, and it is brought down to $0 through payment of claims early in year two, that will still prevent the employee (or the employer) from being able to contribute to an HSA for the entire three months at the beginning of year two. A similar outcome would apply if a carryover balance is permitted in the general purpose health FSA, though the impacts could go further into year two.

These are just three of many issues that plan sponsors should consider before open enrollment begins, but considering these, along with other changes and updates in law, will help plan sponsors prepare for a successful open enrollment.

b. Tax Advantages. HSAs are triple-tax-advantaged. Deposits into an HSA are tax-free, contributions in the HSA grow tax-free, and distributions are tax-free as long as the money is used for out-of-pocket, qualifying health care expenses.

Susan K. Bilbro, Attorney Bass, Berry & Sims PLC sbilbro@bassberry.com www.bassberry.com

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The Importance of Structure in Designing a S T O P L O SS CONTRACT

BY KARA SPENCE

As healthcare costs continue to rise, it is more important than ever to make sure your stop-loss contract is properly structured. Oftentimes, too much attention is given to the current year when equal attention should be given to the following years.

Planning on how to structure your contract is key to mitigating potential problems in the years to come. The appropriate type of contract, in conjunction with key contract features, helps give peace of mind even in the worst-case scenarios.

When trying to decide whether an ‘Incurred and Paid’ or a ‘Paid’ contract is appropriate for the first, second and subsequent years, you need to decide what level of risk you are comfortable assuming and how much protection you are willing to pay for.

KEY S T O P LO S S C O NT RAC T FEATURES Plan Mirroring – It is essential for your stop-loss policy to mirror the existing plan so that there is no gap in coverage from one policy to the next. This is especially important when changing stop-loss carriers.

Terminal Liability Option (TLO) – If you decide to terminate your self-funded plan and convert to a fully-insured policy or just want to make sure your liability is always capped, this option extends your protection for three or six months to cover any run-out claims.

Monthly Aggregate Accommodation – Since aggregate policies do not provide reimbursement until the end of the plan year, it is important to have this feature in place to sustain adequate cash flow should claims exceed the aggregate level early in the plan year. This feature provides partial payments each month instead of waiting until the end of the year for reimbursement.

Advanced Funding – Regardless of how well you plan, catastrophic claims can significantly affect an employer’s cash flow. Advanced funding helps pay for a specific claim directly, instead of the employer paying up front and waiting for reimbursement.

FIRST S E LF - F U ND ED P L A N Y EA R

No New Lasers – This feature ensures that stop-loss carriers cannot exclude any “risky” high claimants at renewal. Without this protection, the carriers will simply place the stop-loss level above the anticipated total for the coming year.

A solid rule of thumb is for 12/12 Contracts (incurred in 12 months and paid in the same 12 months) to only be used in the first year and followed by a contract that includes protection for claims incurred, but not yet paid, during the initial selffunded plan year.

Maximum Renewal Rate Cap – Having a maximum renewal increase for your stop-loss policy provides an additional level of protection. This is critical, especially when you have multiple high claimants or catastrophic claims during your plan year.

While a 12/15 contract does give 3 months of run-out protection and yields a lower premium than a 12/18 or 12/24 contract, it can still leave you quite vulnerable.

Catastrophic claims incurred at the end of the plan year may not be paid in the three-month run-out period, leaving the employer liable for additional unplanned and unexpected payments that may fall outside the extended payment period. It is essential to put an appropriate contract in place for the second and subsequent years to mitigate this liability.

Guaranteed Renewability – This feature isn’t automatically included in all stop-loss contracts and is especially important when costs rise and other carriers are not competitive. This helps ensure that your group will remain covered.

To guarantee that you’re not at the mercy of your stop-loss carrier, negotiate the terms of the contract in the first year to have the trifecta of guaranteed renewability, a maximum rate cap and a “no new laser” provision.

SECO N D & S UB S EQU EN T SEL F - F U N D ED P LAN Y EARS As described above, your second-year contract should depend on what you negotiated in the first year. Whether you decide to cover the gap from year-to-year upfront with a 12/15, 12/18 or 12/24 contract or at renewal with a 15/12, 24/12 or paid contract, the amount of protection and cost go hand in hand. As the level of run-in protection increases and you add features to minimize additional risk, so does the premium.

If the level of desired protection outweighs the associated costs, a paid contract may be the best choice. Paid contracts are the highest premium option, but cover all paid claims during the plan year, regardless of when incurred.

Keep in mind that if you have a paid contract there is no run-out protection. One of the best alternatives is to have the “trifecta” negotiated in each subsequent year or have the carrier add it with caveats that the features apply as long as the contract is renewed. Anytime a contract changes, additional risks and coverage gaps need to be explored and evaluated based upon the current contract at the time of change.

While determining which contract is a better fit for your client is critical to selffunding, there are many other things to keep in mind. It is important that your contract contains certain features that play a major role in your overall plan protection.

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As indicated above, it is critical to have these last three features to provide the protection from year to year and not allow the insurer to leave you with a large claim that transcends two or more years.

READ T HE F INE P RINT !

Although these contract provisions are very important, they are not always outlined clearly or consistently in stop-loss proposals from carrier to carrier. As a broker, it is our responsibility to not only know what level of protection our clients want and need, but also what they are really paying for. Going forward, remember to confirm all contract specifications with each stop-loss carrier and present your options clearly with these key features in mind. Like our clients, every carrier is different and should be evaluated independently. Focusing on how the stop-loss contract is structured not only in the current plan year but for the years to come will help us to better serve our clients and their financial well-being.

Kara Spence, Financial Analyst Employee Benefits Division Regions Insurance kara.spence@regions.com www.regionsinsurance.com

Do employee benefit laws remind you of alphabet soup?

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

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

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THE REPLACE AND REPEAL ROLLERCOASTER: How Will Employers Be Impacted?

By JENNIFER S. KIESEWETTER

March 6, 2017, the House Republican leadership proposed its own health care bill – the American Health Care Act (AHCA) – which repeals and replaces certain parts of the Affordable Care Act (ACA), which passed the House by a narrow margin. To pass the House, the Republicans needed 216 votes, and the AHCA passed, achieving a party-line vote of 217-213 on May 4, 2017. That bill went off to the Senate for simple majority approval. Instead of heading to the floor for a vote, the Senate drafted its own health care bill, releasing in June the Better Care Reconciliation Act (BCRA), keeping several key House provisions.

Currently, the Republican Senate is struggling with receiving majority support on its bill, and as of the writing of this article, reports the possibility of new drafts, new Congressional Budget Office scores, delayed votes, and the like.

However, with so much legislation being proposed, it can leave an employer’s head spinning. What does this all mean? If any of this gets passed – in whole or in part – how does this affect employers and their employees?

THE FOLLOWING CHART ADDRESSES SOME KEY PROVISIONS IN EACH THE AHCA AND THE BCRA AND COMPARES THEM TO THE ACA WHILE FOCUSING ON EMPLOYERS’ INTERESTS. AFFORDABLE CARE ACT (ACA)

AMERICAN HEALTH CARE ACT (AHCA)

BETTER CARE RECONCILIATION ACT (BCRA)

Signed into law on March 23, 2010.

Passed the House on May 4, 2017, with a vote of 217-213.

“Discussion draft” proposed on June 22, 2017, with updates on June 26, 2017.

Employer Mandate

Imposes a tax penalty on employers with 50 or more full-time or full-time equivalent employees that do not offer qualified health coverage to those employees.

The employer mandate is repealed, reducing the tax penalty to zero, retroactive to January 1, 2016.

The concept of “full-time” is also repealed.

The employer mandate is repealed, reducing the tax penalty to zero, retroactive to January 1, 2016.

Dependent Coverage Age 26

Must provide dependent coverage for children to age 26 for both group and individual policies.

No change.

No change.

Lifetime & Annual Dollar Limits

Prohibits lifetime and annual dollar limits on coverage for both individual and group plans.

No change; except, only applies to limits on essential health benefits, which can be changed under state waivers.

No change; except, only applies to limits on essential health benefits, which can be changed under state waivers.

Cost Sharing for Preventive Health Benefits

Prohibits cost sharing for preventive health benefits for both individual and group plans.

No change.

No change.

Must be enrolled in a qualified high deductible plan to make tax deductible contributions to an HSA; annual limits apply on contributions; amounts withdrawn are not subject to income tax if used for qualified medical expenses.

Almost doubles the annual limits on contributions; both spouses may contribute to the same HSA; qualified medical expenses definition is expanded to include over-the-counter medicine; penalties are reduced for non-qualified expenses.

Almost doubles the annual limits on contributions; both spouses may contribute to the same HSA; qualified medical expenses definition is expanded to include over-the-counter medicine; penalties are reduced for non-qualified expenses.

Applies an excise tax on high-cost health plans beginning in 2020 (based on dollar thresholds); excise tax is 40% of plan value in excess of set thresholds.

Delayed until 2026.

Delayed until 2026.

Cadillac Tax

Medicare payroll tax

Increased Medicare payroll tax (HI) on wages for workers who earn over $200,000 individually; $250,000 jointly.

Repealed, after 2023.

Repealed, after 2022.

Reporting Requirements

Section 6055 and Section 6056 require health insurers and self-insured employers, among others, to file Forms 1094/1095 to the IRS reporting certain information, such as offers of qualified coverage, to ascertain that the employer mandate has been satisfied.

For self-insured plans, Forms 1094/1095 are not going away (yet). The ACA’s premium tax credits phase out in 2020, and until then, reporting will still be required. A simplified W-2 reporting has been contemplated.

Reporting would still continue on Forms 1094/1095, without the calculation of any employer penalties. The sole purpose of the reporting would be to confirm whether an individual was qualified for employerprovided health insurance.

Important Dates to Know

Health Savings Accounts

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Another requirement that is not directed at private health plans, but is directed at the individual and small group market, is the continuous coverage requirement. Although this is not a provision that many employers will have to address day-to-day, it may come up now and again with respect to their employees, upon termination, or otherwise in between jobs. Under the ACA, the individual mandate requires almost all U.S. citizens and legal residents to have qualified health coverage, or pay a tax penalty. Both the AHCA and the BCRA repealed the individual mandate. However, both put restrictions on individuals having continuous coverage. Having continuous coverage will also allow individuals to not run afoul of the prohibition of pre-existing conditions coverage provisions.

For example, under the AHCA, if an individual does not have creditable coverage (with no break longer than 63 days in the prior 12 months), he or she will receive a 30% late enrollment surcharge in addition to premiums for the following year when seeking health insurance. This surcharge is payable to the insurance company. As stated in the AHCA, this surcharge is the same for all market entrants, regardless of health status, and will be discontinued after 12 months, in an effort to incentivize individuals to stay covered.

Under the BCRA, for those individuals who did not have creditable coverage (with no break longer than 63 days in the prior 12 months), he or she will be subject to a 6-month waiting period before being able to apply to the non-group market.

week in July are hitting the press. President Trump tweeted this morning, on July 10th, that he hoped Congress wouldn’t take their August recess without having a “beautiful new HealthCare bill fully approved and ready to go.” Constituents are angry.

Each member of Congress has his or her own concerns. And those are just the Republicans. But, we could all be surprised next week. Many people thought the House bill would not pass.

And it did – by one vote. Between now and the Senate vote, we can expect to see some more last minute changes to the bill to ease the tensions among the Republicans in an effort to gain consensus. But then, even if such consensus is achieved, and the BCRA passes the Senate, it will head straight back to the House, which could possibly mean weeks of deliberation.

For now, although employers should pay attention to what’s going on in Washington, more importantly they should focus on what’s in front of them – their own business and the law of the land. Until we get a bill signed by the President, the ACA is still law, and needs to be implemented as such. Change appears to be inevitable, but like everything else, we’ll deal with it when it comes. We do know that we have some more hills and turns in front of us. It’s a long ride. And a bumpy one.

Much is still up in the air as to the next steps for the repeal and replace process. As of the writing of this article, rumors of a Senate vote the third

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

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SAND September 29, 2017 Perdido Beach Resort

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ERISA

Profiles of and Employee

Benefits Attorneys

The focus of our August issue is retirement planning and compliance. This is a very complex function of the HR profession that requires expert legal advice. We are excited to bring you some profiles of highly successful ERISA and employee benefits attorneys in your areas that are available to assist you. We hope that you find this guide helpful as you work through the complex regulations and requirements necessary to assist your employees with their retirement planning.

Tom Henderson M AN AG I N G SH AR EH O L DE R | M E M P H I S

Ogletree Deakins has one of the largest teams of employee benefits, executive compensation, and Employment Retirement Income Security Act (ERISA) litigation practitioners in the United States. As part of a firm that focuses on labor and employment law, Ogletree Deakins’ ERISA Litigation Practice Group applies technical litigation experience and employee benefits knowledge to clients’ needs. For over 25 years, Ogletree Deakins attorneys have been representing employers, insurers, and employee benefits plans in litigation involving the denial of life, health, disability, and retirement benefits; breaches of fiduciary duty; bad faith; claims of misrepresentation; and subrogation and reimbursement.

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Mr. Henderson is the Managing Shareholder of the Memphis office.

He has represented management in employment and labor relations matters for over 30 years. He has served as lead counsel in numerous jury trials in state and federal courts across the nation. His trial experience includes defending state and federal discrimination and harassment lawsuits, class actions, FMLA claims, ERISA and benefit claims, trade secret and unfair competition matters, and related state law claims. He also handles NLRB elections and unfair labor practice proceedings. Mr. Henderson is listed in “The Best Lawyers in America” in three areas and “Mid-South Super Lawyers.”

Littler is nationally recognized for taking a practical solutions-oriented approach to assisting its employee benefits clients. We regularly help employers design, document, review, and operate all types of ERISA and non-ERISA plans and arrangements, including health and welfare, retirement, supplemental retirement, employment, incentive bonus and severance programs. Additionally, we have the knowledge and geographic presence to deliver solutions to any ERISA or other employee benefits litigation problem.

Shella B. Neba

Wesley E. Stockard

S HA RE HO L D E R | ATL A NTA

SH AR E H O L DER | AT L AN TA

Shella B. Neba represents and counsels employers in a broad range of employment matters arising under federal and state law. She concentrates her practice in the areas of employment litigation, employee benefits, and employment practices audits. Her litigation practice includes cases involving, discrimination and harassment in the workplace, civil rights matters, wage and hour compliance, and violations of employment statutes. In her employee benefits practice, she counsels employers and management regarding compliance with Consolidated Omnibus Budget Reconciliation Act (COBRA), Health Insurance Portability and Accountability Act (HIPAA) and Employee Retirement Income Security Act (ERISA).

Wesley Stockard advises, represents and trains clients on a variety of labor and employment matters, with an emphasis on litigation and counseling in the areas of public and private employer benefit plan litigation and design, including claims under the Employee Retirement Income Security Act (ERISA); wage and hour compliance and litigation, including claims under the Fair Labor Standards Act (FLSA); employment discrimination and harassment matters; Family and Medical Leave Act (FMLA) compliance; non-compete and non-solicitation covenants; and unfair labor practice charges. He has particular experience with class action and complex litigation matters, including litigation of class and collective ERISA and FLSA claims.

Our capabilities are global, but our focus is singular.

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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Bass, Berry & Sims' highly skilled employee benefits attorneys advise businesses of all sizes from start-up to international Fortune 500 companies on all facets of employee benefits programs, serving as sole employee benefits counsel to a diverse mix of public and private employers and non-profit organizations. Additionally, our team counsels individual CEOs and boards on a wide range of executive compensation arrangements. We partner with public and private employers, benefits consultants and third party administrators in the design, drafting, implementation, amendment, termination and administration of all types of employee benefit plans.

Susie Bilbro

Fritz Richter

COUNSE L | NA S HV IL L E

M E M B E R | N ASH VI L L E

Susie Bilbro advises clients on all aspects of employee benefit plan design and administration including compliance with ERISA, the Patient Protection and Affordable Care Act, COBRA and the Internal Revenue Code. She has counseled public and private clients on employee welfare and pension benefits issues, both in connection with corporate transactions and on day-to-day administration.

Fritz Richter counsels clients on employee benefit plan design and administration, and compliance with the Internal Revenue Service (IRS), Pension Benefit Guaranty Corporation (PBGC) and Employee Retirement Income Security Act (ERISA). His clients span a wide range of industries, including healthcare, retail and hospitality. Fritz has helped clients navigate hundreds of audits; submitted numerous IRS, Department of Labor and PBGC filings; and crafted a wide variety of employee benefit plan documents â&#x20AC;&#x201C; all focused on helping employers navigate complex government regulation.

Doug Dahl COUNSE L | NA S HV IL L E

Doug Dahl provides technical knowledge and advice to companies on a wide range of federal tax and ERISA matters regarding employee benefits, including qualified retirement plans, executive compensation arrangements and health and welfare plans. Doug regularly assists companies with employee benefit issues that arise during and following various corporate transactions and events, such as mergers, acquisitions, dispositions and bankruptcies.

Curtis Fisher MEMBE R | NA S HV IL L E

Curtis Fisher advises public and private companies on all aspects of employee benefits, including the design, drafting and operation of qualified plans and health and welfare benefit plans. A significant amount of his practice is devoted to employee benefit and executive compensation matters related to merger and acquisition transactions.

In the past two years alone, Curtis has provided advice in more than 25 merger or acquisition transactions.

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David Thornton M E M B E R | M E M PH I S

David Thornton helps employers deliver retirement, health and welfare benefits to their executives and employees. With more than 30 years of experience, he has developed a diverse practice counseling hundreds of public and private employers and non-profit organizations in drafting, maintaining and administering retirement plans ranging from $1 million to several billion dollars in assets, including many in the $100 million to $500 million asset range. He has deep experience in ESOP transactions, successfully navigating the significant fiduciary duty considerations and tax code requirements involved with these transactions.

Troy A. Price PAR T N E R | L I T T L E R O C K

At Wright Lindsey Jennings, our Labor and Employment attorneys have experience representing clients in ERISA and employee benefits issues regarding nonpayment of benefits and breaches of fiduciary duties, including litigation resulting from these issues. We have represented employers, pension plans, plan administrators, plan sponsors, fiduciaries, third party administrators, insurance companies and welfare plans, both fully insured and self-insured. Our Labor and Employment team has management-oriented practices addressing all aspects of the employee/employer relationship. We also offer employee and manager training on a variety of issues and provide free educational resources to our clients through quarterly newsletters, employment law luncheons and website articles.

Troy A. Price has earned a reputation as one of Arkansas’ most esteemed appellate lawyers. In his 20-year practice at Wright Lindsey Jennings, Price has handled more than 50 appeals in state and federal courts and has presented oral arguments more than 15 times in appeals before the Arkansas Supreme Court and Court of Appeals, the Eighth Circuit Court of Appeals and the Eleventh Circuit Court of Appeals. He is also admitted to practice before the Supreme Court of the United States. In addition to focusing on ERISA and other employee benefits litigation, Price is also recognized as an authority in First Amendment law.

Jennifer Kiesewetter M AN AG I N G M EM B ER | M EM PH I S

Kiesewetter Law Firm is a boutique law firm that focuses on employee benefits, executive compensation, and regulatory compliance, including Affordable Care Act (ACA), Health Insurance Portability and Accountability Act (HIPAA), and Employee Retirement Income Security Act (ERISA) compliance. Our focus is simple -- to solve complicated legal issues in collaborative, comprehensive and creative ways while being client driven and cost-effective. We partner with our clients as well as our clients’ other professional consultants to make sure we are wholly achieving our clients’ goals in a proactive manner.

We work alongside our clients as team members, so that our clients can focus on what they do best – their core business.

Jennifer Kiesewetter, managing member of Kiesewetter Law Firm, is a seasoned attorney in the field of employee benefits, encompassing qualified and nonqualified employee benefit plans, welfare benefit plans, and executive compensation plans. Ms. Kiesewetter's practice includes regulatory compliance and governance with the Employee Retirement Income Security Act of 1974 ("ERISA"), the Internal Revenue Code, and the Affordable Care Act. She is an Adjunct Professor of Employee Benefits and Insurance at University of Memphis Cecil C. Humphreys School of Law. Additionally, Ms. Kiesewetter is a frequent writer and speaker on the topic of employee benefits and health care compliance regulatory law, locally, regionally and nationally.

Amber Wilson Bagley Cross, Gunter, Witherspoon & Galchus, P.C. provides guidance concerning administrative and compliance issues relating to employee benefits, including Department of Labor inquiries, investigations and audits, and the Affordable Care Act. We also practice as labor and employment lawyers and immigration lawyers, in addition to a number of other areas. These areas include insurance defense, construction, health care, products liability, transportation, commercial litigation,

DI R E C T O R | L I T T L E R O C K

Amber Wilson Bagley is a director in the Firm of Cross, Gunter, Witherspoon & Galchus, P.C., practicing in the areas of Health Care Law, Employee Benefits and Commercial/Corporate Law. Amber has been named to the Best Lawyers in America; Mid-South Super Lawyers list of “Rising Stars”, Arkansas Business 40 Under 40 (2013), and Soirée Magazine’s readers selected Amber as one of the “Best Lawyers in Little Rock” in 2013-2016.

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Timothy F. Kennedy C O UN SEL | M E M PH I S

FordHarrisonâ&#x20AC;&#x2122;s Employee Benefits group assists numerous public and private employers (including many Fortune 500 corporations) with all aspects of their compensation and benefit plans and programs, from design and implementation through termination. Our experience and expertise allows us to advise employers and others regarding all types of qualified and non-qualified retirement and deferred compensation plans, health and other welfare benefit plans, fringe benefit programs, executive compensation plans and agreements, and related matters. We represent employers, plans, insurers and others in courts throughout the country in litigation involving ERISA and other benefit issues.

Tim Kennedy focuses his practice on advising clients on legal issues pertaining to retirement plans, health and welfare benefits, executive compensation arrangements, and fringe benefits. His experience includes assisting employers in complying with the Internal Revenue Code and ERISA and advising employers on best practices in the design, implementation, and administration of employee benefit plans. Tim routinely drafts and reviews employee benefit plans and executive compensation arrangements, negotiates employee benefit plan service provider agreements, prepares Internal Revenue Service determination letter filings and voluntary compliance program submissions, and counsels employee benefit plan fiduciaries on their duties under ERISA.

Tiffany D. Downs

R. Brian Spring

PAR T NER | ATL A NTA

SE N I O R ASSO C I AT E | AT L AN TA

Tiffany Downs is the head of FordHarrisonâ&#x20AC;&#x2122;s Employee Benefits Practice Group. She advises and assists employers with all aspects of health and welfare plans, qualified and non-qualified retirement plans and executive compensation. She assists with due diligence in mergers and acquisitions and post transaction transition and integration. She advises on compliance with ERISA, Affordable Care Act, HIPAA, privacy, COBRA, and Internal Revenue Code on all types of employee benefit plans and incentive compensation. She assists employers with audits by and corrections programs of the Internal Revenue Service and the Department of Labor.

Brian Spring advises employers in employee benefit and tax related matters involving the design, implementation, and operation of qualified plans, health and welfare plans, and fringe benefits. Brian also has experience counseling clients in all aspects of executive compensation matters, including the negotiation and drafting of equity compensation plans and awards, employment/severance agreements, and other compensation arrangements. Brian regularly advises clients on health and welfare matters related to the Patient Protection and Affordable Care Act, HIPAA, and COBRA and executive compensation matters.

Dwayne O. Littauer The Kullman Firm works with clients in establishing and administering all types of employee benefit plans, including health, disability, retirement, and cafeteria plans. This includes advice concerning the Affordable Care Act, COBRA, HIPAA, withdrawal liability, and qualified retirement plans, such as 401(k) plans, 403(b) plans, 457(b) plans, defined contribution/defined benefit pension plans, employee stock ownership plans, and executive compensation programs. We assist on tax withholding issues and related independent contractor/ employee determinations, withdrawal liability and with other issues relating to multiemployer plans, and we defend our clients in all types of benefit controversies with employees.

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SH AR E H O L DER | N E W O R L EAN S

Dwayne O. Littauer is a shareholder of The Kullman Firm. His work is devoted principally to counseling clients in establishing, administering and handling benefit controversies concerning employee benefit plans, including health, disability, 401(k), pension, 403(b), and 457(b) plans. Mr. Littauer received his B.A., with honors, from the College of William and Mary and his J.D. from the University of Alabama, where he was on the Alabama Law Review. He received an LL.M. in Taxation from New York University, where he was a Graduate Editor of the Tax Law Review. He is a Board Certified Tax Law Specialist and has been included in Super Lawyers.

Our labor and employment attorneys partner with our tax attorneys to provide comprehensive and up to date advice for employers, and create pension and benefit plans that best meet our clients' business objectives in compliance with tax regulations. When litigation occurs, we defend clients against administrative claims and all related types of controversy. We routinely represent plan administrators and claim administrators in the defense of ERISA disability claims, and represent employers and insurers in claims for benefits and class actions premised on alleged breaches of fiduciary duties under ERISA. Our clients include manufacturing and distribution businesses, financial institutions, technology companies, health care companies, hospitals and medical service providers, educational institutions, and non-profit and government employers, as well as a number of public companies in various industries.

D.J. Simonetti

Paul R. O'Rourke

SHAREHO L D E R | BIRM ING HA M

SH AR E H O L DER | M EM PH I S

D.J. Simonetti is a shareholder in the Firm's Birmingham office.

Mr. Simonetti concentrates his practice in the areas of employee benefits and executive compensation, employer resources, corporate and business, and health care law.

Paul R. O'Rourke has practiced employee benefits (ERISA) law for thirty years, working with a wide range of clients from very large, publicly-traded employers to selfemployed individual arrangements. Clients include for-profit entities, as well as governmental, church and other tax-exempt entities. Mr. O'Rourke handles qualified and non-qualified retirement plans, executive compensation, regulatory issues and dispute resolution, cafeteria plans, welfare plans, COBRA and other benefit-related matters. Mr. O'Rourke is often involved with regulatory compliance matters relating to these plans, whether through routine governmental filings, correction procedures for operational problems, and dispute resolution with the IRS and Department of Labor.

Andrea Bailey Powers SHAREHO L D E R | BIRM ING HA M

Andrea Bailey Powers has over 20 years' experience as a dedicated ERISA/employee benefits attorney.

Working from the Birmingham office, Ms. Powers represents employers in all aspects of executive compensation and employee plans matters, including the design and administration of qualified retirement plans, health and welfare benefit plans, and non-qualified executive compensation plans.

Because nearly every business is impacted by health care reform, Ms. Powers spends much of her time helping employers address compliance issues and business realignment in the wake of the Affordable Care Act. Ms. Powers is a frequent speaker and commentator on health care reform issues where she tries to provide a practical business-like approach to compliance.

William E. Robinson O F C O UN SE L | C H AT TAN O O G A

Bill Robinson concentrates his practice in ERISA and Employee Benefits. He has extensive experience in the areas of pension and welfare benefits. He also provides advice on benefit plans in connection with mergers and acquisitions. Mr. Robinson has represented multi-employer pension and welfare plans and advises corporate clients on multi-employer plan issues. He also represents governmental entities in connection with retirement plan matters. He represents both "for profit" and "tax exempt" employers with respect to non-qualified deferred compensation and other areas of executive compensation. He also works with the labor and employment and litigation attorneys in support of employee benefits litigation and advises business clients on ESOP matters.

Cameron S. Hill Sr. SH AR E H O L DER | C H AT TAN O O G A

Jay A. Ebelhar SHAREHO L D E R | M E M P HIS

Jay A. Ebelhar provides counsel to businesses on day-today decisions implicating the ADA, ADEA, FMLA, FLSA and Title VII of the Federal Civil Rights Act, while also representing employers in a variety of judicial and/ or administrative matters. He also helps advise clients on employee benefits plans.

Cameron S. Hill is a trial attorney and shareholder in the Firm's Chattanooga office.

While Mr. Hill's experience is diverse, he focuses on construction, employment, ERISA and general commercial litigation matters, trying cases to conclusion or decision through alternative dispute resolution.

Mr. Hill handles a variety of construction issues, including claims related to defects, delays, site conditions, change orders, liens and other contract disputes. His employment law experience includes discrimination claims brought under various state and federal statutes and covenants not to compete. His ERISA and non-ERISA benefits practice includes claims related to long term disability, short term disability and ERISA pension benefit disputes. He also represents clients involved in general commercial disputes.

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Friday, Eldredge & Clark LLP has one of the most experienced employee benefits practice in the region, managing more than 1,000 separate benefits and compensation plans. Our attorneys simplify the lives of human resources professionals in all types of companies, ranging from family owned business to Fortune 500 companies. Every employee benefits attorney at Friday, Eldredge & Clark holds a Master of Laws in Taxation and is experienced in the design, implementation, administration, compliance, and termination of tax-qualified retirement plans (including pension plans, cash balance plans, profit sharing plans, 401(k) plans, and ESOPs), 403(b) plans, 457(b) plans, nonqualified deferred compensation plans and health and welfare plans. The group also works closely with human resources professionals providing requisite fiduciary training and counsel to ERISA fiduciaries.

Joseph B. Hurst, Jr.

David M. Graf

PAR T NER | L ITTL E RO CK

PAR T N E R | L I T T L E R O C K

Joseph B. Hurst, Jr. is the head of the firm's Employee Benefits Practice Group. His works with the benefit needs for financial institutions, regular business organizations, professional corporations and governmental and non-profit organizations. He assists plan sponsors and fiduciaries with regulatory compliance with ERISA, state and federal tax issues and with local legislation affecting retirement and welfare plans. In addition, he acts as counsel to plan sponsors, fiduciaries and participants with respect to ERISA controversies and litigation. He is listed in The Best Lawyers in America, Employee Benefits; ranked in Chambers USA: Americaâ&#x20AC;&#x2122;s Leading Lawyers for Business, Labor and Employment: Employee Benefits and Compensation and selected by attorney peers for inclusion in Mid-South Super Lawyers.

A. Wyckliff Nisbet, Jr.

Alexandra Ifrah

PAR T NER | L ITTL E RO CK

PAR T N ER | L I T T L E R O C K

Wyckliff Nisbet, Jr. has practiced at the firm since 1974 specializing in employee benefits and taxation. He has more than 40 years of experience representing employers in the design, implementation and administration of tax-qualified retirement plans, non-qualified deferred compensation and executive compensation. He represents and counsels employers in employee welfare benefit programs. In addition, he works with business owners, professionals and individuals with high net worth in estate planning and wealth transfer planning.

Wyckliff is listed in The Best Lawyers in America, Employee Benefits; ranked in Chambers USA: Americaâ&#x20AC;&#x2122;s Leading Lawyers for Business, Labor and Employment: Employee Benefits and Compensation and selected by attorney peers for inclusion in Mid-South Super Lawyers.

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David M. Graf concentrates his practice on nonqualified deferred compensation plans, and welfare benefit plans for financial institutions, regular business organizations, professional corporations, and governmental and non-profit organizations. He assists plan sponsors and fiduciaries with regulatory compliance with ERISA, state and federal tax issues, and with local legislation affecting retirement and welfare plans. In addition, he acts as counsel to plan sponsors, fiduciaries and participants with respect to ERISA controversies and litigation. He is listed in The Best Lawyers in America, Employee Benefits and named Lawyer of the Year by the publication in 2015.

Dave is a frequent speaker on employee benefits matters and an active community member currently serving as mayor of Cammack Village.

www.HRProfessionalsMagazine.com

Alexandra Ifrah brings almost 20 years of experience to her clients, working closely with Human Resources leaders, CEOs, CFOs, and business owners throughout the region to provide counsel on complex employee benefits, taxation and executive compensation arrangements.

She has focused much of her practice on designing and implementing qualified retirement plans, nonqualified deferred compensation plans, health and welfare benefit plans, and fringe benefit plans for clients including nonprofits, governmental entities, small businesses and Fortune 500 companies. Alexandra also has extensive experience in assisting Human Resources professionals and ERISA fiduciaries in administering their employee benefits plans to comply with all applicable laws and regulations affecting every aspects of the employee benefits offered to their employees. Listed in The Best Lawyers in America for Employee Benefits and named Lawyer of the Year by the publication in 2016, Alexandra joined the firm in 1999.

Brian C. Smith PAR T NER | L ITTL E RO CK

Brian C. Smith focuses his practice on retirement plans (including defined benefit plans, profit sharing plans, 401(k) plans, ESOPs, 403(b) plans and 457(b) plan) and nonqualified deferred compensation plans for financial institutions, business entities, professional corporations and governmental and non-profit organizations.

Brian assists plan sponsors and fiduciaries with ERISA regulatory compliance, state and federal tax issues and local legislation affecting retirement plans. In addition, he represents plan sponsors and fiduciaries with respect to plan audits by the Internal Revenue Service and the Department of Labor. Brian has been with the firm since 2003.

Joshua M. Osborne PAR T NER | L ITTL E RO CK

Joshua M. Osborne practice focuses on providing counsel to clients on all aspects of their welfare benefits, retirement plans and executive compensation arrangements. He has extensive experience in designing and implementing group health plans (self-insured and fully insured), cafeteria plans, wellness programs and other welfare benefits and regularly advises clients on the ongoing administration of their benefit programs in order to maintain compliance under the Affordable Care Act, ERISA, HIPAA, COBRA and other applicable laws. Josh regularly assists Fortune 500 companies, small business, non-profit and governmental entities on navigating the complex health care reform laws including 1094/1095 reporting and employer shared responsibility requirements. He has been with the firm since 2006.

CLIENT FOCUSED EVERY DAY

From family-owned businesses to Fortune 500 companies, our EMPLOYEE BENEFITS ATTORNEYS simplify the lives of human resources professionals in areas such as compensation, retirement plans, ERISA & compliance audits.

EMPLOYEE BENEFITS TEAM JOSEPH B. HURST, JR. A. WYCKLIFF NISBET, JR. DAVID M. GRAF ALEXANDRA A. IFRAH BRIAN C. SMITH

Jeremiah D. Wood PAR T NER | L ITTL E RO CK

Jeremiah D. Wood works for a variety of clients, including Fortune 500 companies, local and regional financial institutions, privately held business organizations, professional corporations, governmental organizations and non-profit organizations. Jeremiah assists his clients (as plan sponsors and fiduciaries) with regulatory compliance related to the Internal Revenue Code, ERISA and HIPAA as well as with state and local tax issues (including recent legislation) affecting retirement and welfare plans. In addition, he acts as counsel for his clients with respect to ERISA controversies and litigation and he regularly handles matters that involve correcting errors using the Internal Revenue Service Employee Plans Compliance Resolution System (EPCRS) and the Department of Labor Voluntary Fiduciary Correction Program.

JOSHUA M. OSBORNE JEREMIAH D. WOOD

Little Rock I Faytteville I Rogers

(501) 376-2011

WWW.FRIDAYFIRM.COM

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Think of Salary Expense as an Investment

By LAURIE WILLOUGHBY

P

ersonnel expense is by far the largest non-interest expense for a community bank. It is critical that the costs be managed in a way that ensures profitability and delivers value to our shareholders. In many organizations, this daily battle between cost and profit is too frequently won by profit and the result is an unengaged workforce that feels unappreciated.

The philosophy of The Hardin County Bank is the exact opposite! We believe that investment in people will result in higher profit as well as increased value to shareholders, improved service levels, engaged staff and all around happier people.

A culture of learning has been developed over time and is cultivated on a daily basis. Our bankers are encouraged to pursue outside education and training as well as to participate in frequent on-site sessions. Investment in time and money in an employee who desires to learn has proven to return dollars to the bottom line.

We invest in each employee because they matter and each brings something special to our team. This begins in the hiring process.

Applicants are not hired because they have a degree from a tier 1 university or because they have vast banking experience. Those who join our team are a fit for our culture and commit to a lifelong learning process. The investment is in making each person the best they can be and giving them freedom to grow in the organization. A strong management commitment to employee involvement, open communication and a positive environment, combined with this learning culture results in a high performing organization where people actually enjoy being at work.

The mantra of many businesses today is for their employees to “act like owners”, well we are owners! Each employee has “skin in the game” because we are an ESOP bank, with the largest shareholder being our employees. We are a business for profit and all understand this in a meaningful way. We also understand

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delivering value to our shareholders is achieved by delivering exceptional value to our customers. The more educated we are about our business, the more value we deliver to our customers and the more value we deliver to our shareholders. The virtuous cycle continues; so in the end, results matter to everyone!

When your desire is to deliver positive results, profits, and a great culture; investment in people makes all the difference. Investing time, money, and education in the right people creates a high performance team that delivers results. Our community, balance sheet, and stakeholders see those results. Sometimes you hire because the right fit walks in the door, but is not necessarily an immediate need.

When your desire is to deliver positive results, profits, and a great culture; investment in people makes all the difference.

Our methods are a little unconventional, and we have turned the conventional expense paradigm on its head. But, the results speak for themselves. If not in your people, where better to make an investment?

Laurie Willoughby VP, Human Resources Hardin County Bank Laurie.willoughby@hardincountybank.com

A Kentucky Top Investment Advisor

Jeanne Fisher, CFP,® CPFA, MBA ARGI Jeanne is a qualified plan advisor and a member of ARGI’s corporate benefits education team. She helps companies design and manage 401(k)s and other employer-sponsored plans. She works primarily with large participant plans.

As a CERTIFIED FINANCIAL PLANNER™ and CFP Board Ambassador, Jeanne serves as a spokesperson to advocate for financial wellness. She has been featured on Sherri Fitt’s “Women Rocking Wall Street”, the “Doughroller” Podcast, and NPR’s “Here and Now” with Jeremy Dobbs. Jeanne has been quoted by national publications such as Forbes, Investor’s Daily Business, CNBC News and US News. She has published articles in HR Professionals Magazine, SOKY’s Flair Magazine and KY State SHRM’s Magazine. She is frequently a featured speaker at associations across Kentucky, Tennessee and Indiana including Society of Human Resource Management, Medical Group Management, Financial Executives Networking Group, and KY Society of CPAs. She understands the importance of communicating across multiple levels, and designs her presentations so they are entertaining and comprehensible for all audience members.

At ARGI, Jeanne works with a team of focused professionals that help provide clarity for individuals and businesses through comprehensive, integrated financial services including corporate benefits education for employees, retirement plan advisory, management and consulting services, outplacement and transition financial services, and comprehensive financial planning.

ARGI Investment Services manages more than $1.5 Billion dollars in assets for their clients. They have locations in Louisville, KY, Bowling Green, KY, Elizabethtown, KY, Cincinnati, OH, Indianapolis, IN, Grand Rapids, MI, and Norwalk, CT and serve personal and business clients across the country.

Follow Jeanne on Twitter @FinancialJeanne or connect with her on LinkedIn or Facebook. Respective services provided by ARGI Investment Services, LLC, a Registered Investment Advisor, ARGI CPAs & Advisors, ARGI Business Services, and Advisor Insurance Solutions. All are affiliates of ARGI Financial Group.

22ND ANNUAL NORTH ALABAMA HUMAN RESOURCE MANAGEMENT CONFERENCE In Partnership With Shoals Chapter SHRM®

Tuesday, August 15, 2017 University of North Alabama Guillot University Center Florence, Alabama

Continuing Education ... because learning is a lifelong pursuit. www.HRProfessionalsMagazine.com

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UNA is an Equal Opportunity/Equal Access Institution

colleagues who may be interested.

Welcome to The Future of The Recruitment Industry A hiring industry veteran evolved to form a recruitment media company connecting employers with the best candidates

By JOE STUBBLEBINE

Since Beyond, the Career Network, was founded, the recruitment and hiring space has gone through some serious changes. With each new technology and marketing concept that emerges, the way professionals job hunt and companies hire changes too. Think about it – when you applied for your first job, did a recruiter text you? Or did you mail your resume and follow up with HR using your landline? Perhaps I’m dating myself, but job seekers and recruiters today have witnessed profound changes even in just the last few years.

Companies in the recruitment space – and HR professionals and recruiters themselves – must be quick to react to new trends and have their fingers on the pulse of job seekers. With an eye toward the future, Beyond knew it was time to move beyond the job board and introduce the next generation of hiring. Enter stage right, Nexxt.

The decision to rebrand from Beyond to Nexxt was based on nearly two decades of feedback and innovation in the recruiting space. The company has evolved to be a dynamic recruitment marketing solution, catering to the changing needs of the entire hiring spectrum, from job seeker to recruiter.

For companies and agencies, Nexxt is a full-service recruiting platform, providing a targeted method of sourcing the best people from a broader talent pool. For professionals, Nexxt is an employment solution, powering a focused offering of more than 50 niche career sites to make finding the perfect job easier.

The recent launch of Google for Jobs, the tech giant’s job search engine that posts U.S. jobs, from entry-level to executivelevel professional positions, opened the door for job boards to achieve organic (i.e., free) traffic. But what about candidates who might not be actively searching for a new job?

In a recent survey, Nexxt found that just 14 percent of professionals reported actively searching for a new job, yet 58 percent are open to offers – which means that employers who rely entirely on job board advertising miss out on engaging with a significant number of potential candidates.

A Recruitment Media Company Nexxt helps employers reach – and start conversations with – all potential candidates, opening the lines of communication for employers to find the right people in the right places at the right times. Shedding its former job board identity, Nexxt has evolved to become a recruitment media company that reaches candidates of all types through an optimal mix of marketing tactics and predictive technology.

So what sets Nexxt apart from the pack?

The Limitations of the Job Board Job board traffic spikes on Mondays. Think about it – people come to work, grow tired and frustrated, and decide to look for other opportunities. But then they get busy, fall back into their weekly schedule, and forget about the possibility of more.

Niche Targeting

With so many candidates in the hiring pool, it’s challenging for recruiters to find the perfect match for a role. Without a niche targeting mechanism, recruiters routinely end up with dozens of leads that produce very few hires, and of those hires, very few long-term employees. Nexxt’s professional, local, diversity and global framework lets employers automatically When You’re Not Looking…But… target selective candidates through job ads – the foundation of Of those who say they’re not interested in a new job: every recruitment marketing campaign – to reach potential candidates where and when they may be inclined to take action. With Nexxt, employers can have confidence that their job ads will be served in search for jobs online open job alert emails apply to jobs at least the right place at the right time.

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40%

36%

12%

“once in a while”

“from time to time”

once a month

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Candidate Retargeting Retargeting is an extremely effective form of digital advertising, but it has not been widely used in the recruiting space. With Nexxt, employers can keep their brand in front of potential candidates in the same way that a shoe retailer follows you around the web reminding you about the pair of shoes that you didn’t buy. Driving hundreds of clicks from the same candidates is not an effective method for recruiting in a tight labor market. Nexxt extends the reach of a recruitment marketing campaign to ensure recruiters’ messages are in front of the best candidates all over the web.

Campaign Builder Using multiple vendors to execute and measure campaigns can become disjointed and confusing, so Nexxt launched the Campaign Builder as a one-stop-shop. Campaign Builder allows agencies and recruiters to search the full Nexxt database of almost 60 million members to create custom, targeted outreach, text and email campaigns, while controlling their recruitment marketing dollars. While email has been a tried-and-true method of recruiting, it is now being paired with text messaging and the results are unparalleled.

Targeted text campaigns are the next big thing in hiring and Campaign Builder makes it easy for companies to quickly get a campaign out the door.

The recruitment industry has gone through many changes over the last two decades – even in just the last few years – and it’s time to recruit like a marketer. Nexxt is a response to the shifting industry landscape and the new products and services the recruitment marketing platform offers are changing the game for recruiters and job seekers alike. Welcome to the future of the recruitment industry.

Joe Stubblebine Vice President, Recruitment Media Sales ABOUT THE AUTHOR

Joe has a long and varied career in the online recruitment and sourcing space. He loves working with clients to help them make killer hiring decisions. Get him talking on any topic and Joe will turn it towards talent acquisition technology.

Prospects should pick his brain – he helps sell Nexxt but will also give you a primer on who is doing great things in tech. Joe’s entrepreneurial spirit and positive attitude allow him to approach each day as an opportunity. He is a proud dad, passionate boater, U2 super fan and fashion guru. Joe studied accounting at Clarion University and always makes sure that his watch doesn’t clash with his shoes.

To learn more about Nexxt’s hiring solutions, visit hiring.nexxt.com.

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Department of Labor Changes Under the Trump Administration

By JENNIFER HAGERMAN

L

ess than six months into the Trump Administration, the Department of Labor (“DOL”) has taken several actions that are widely viewed as favorable to employers. Most significant is the DOL’s withdrawal of two Wage & Hour Administrator Interpretations on joint employment and independent contractors. Also of note are the DOL’s decisions

to reinstate the practice of issuing opinion letters, revise the “Persuader Rule,” and delay the compliance date for electronically submitting injury and illness reports to the Occupational Safety and Health Commission (“OSHA”). Finally, in a recently filed brief in the Fifth Circuit Court of Appeals, the DOL stated that it intends to revise the salary level for the Fair Labor Standards Act (“FLSA”) white-collar exemptions via new regulations. These changes indicate that the Trump Adminis-

DOL Opinion Letters Return On June 27, 2017, the DOL announced that it will reinstate the practice of issuing Opinion Letters by the Wage & Hour Division regarding the application of the FLSA to various factual circumstances. The DOL also introduced a new website to assist with requesting an Opinion Letter. In 2010, the Obama Administration ceased issuing Opinion Letters and began releasing more general guidance through “Administrator Interpretations.” Opinion Letters are commonly considered a useful resource, and offer employers an opportunity to establish a “good faith” defense against liability under the FLSA.

tration is now focused on what it considers to be its “pro-business” agenda.

DOL Withdraws Guidance on Joint Employers and Independent Contractors Two Administrator Interpretations that many viewed as expanding the definition of “employer” were withdrawn by the DOL on June 7, 2017. Administrator Interpretation No. 2015-1 set forth guidance on the Wage & Hour Division’s definition of “independent contractor.” Specifically, the guidance stated that, when determining whether an individual is an independent contractor or an employee, the DOL would focus on the “economic realities” of the individual’s work, as opposed to whether the putative employer controls the individual’s work. This was contrary to the DOL’s prior focus on the “controls test” and was viewed as an attempt by the DOL to reclassify many workers as employees rather than independent contractors.

Similarly, Administrative Interpretation No. 2016-1 addressed the standards for determining joint employer coverage under the FLSA and took the position that joint employment should be “defined expansively.” Under the now-withdrawn guidance, the Wage & Hour Division differentiated between “horizontal” joint employment and “vertical” joint employment and provided guidance on assessing those relationships separately. In assessing “vertical” joint employment, the DOL stated that it would apply the “economic realities” test, which ultimately meant that more companies would be considered joint employers. While the DOL noted that the withdrawal of these two Administrator Interpretations “does not change the legal responsibilities of employers” under the FLSA, it is a strong indication that the DOL intends to return to the more “traditional” view of employment relationships.

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DOL Issues Notice of Proposed Rulemaking to Revise the “Persuader Rule” In a Notice of Proposed Rulemaking published on June 12, 2017, the DOL set forth its intention to rescind and revise the “Persuader rule,” which is currently subject to a permanent injunction preventing it from taking effect. Under the “Persuader rule,” which was initially promulgated in March 2016, employer and their labor relations consultants (including attorneys) would have been required to make public disclosures of relationships that were previously confidential.

Some of the disclosures included the identity of the consultant (or attorney) seeking to influence employee unionization decisions and the activities of that consultant. According to the DOL’s notice, the DOL’s decision to rescind and revise the “Persuader rule” is based on a perceived need “to give more consideration to several important effects of the Rule on the regulated parties” and to “address the concerns that have been raised by the reviewing courts” as well as considering “the potential effects . . . on attorneys and employers seeking legal assistance.”

OSHA Delays Date for Compliance with Electronic Reporting of Injury and Illness OSHA had previously set a deadline of July 1, 2017 for employers to begin complying with electronic reporting obligations under the rule “Improve Tracking of Workplace Injuries and Illnesses.” On June 27, 2017, OSHA proposed a delay of the compliance date until December 1, 2017. According to OSHA’s press release, the “proposed delay will allow OSHA an opportunity to further review and consider the rule” to address questions of “law and policy.”

Legal Challenges are Coming at HR Professionals from Every Direction

DOL Effectively Abandons 2016 Overtime Rule In a decision that received widespread media coverage, a Texas federal district judge in late 2016 blocked the Obama administration’s new overtime rule shortly before it was set to go into effect. Under that final rule, among other changes, the minimum weekly salary threshold to qualify for most of the white-collar overtime exemptions would have increased from $455 to $913. Since the injunction was issued, the final rule has been caught in a sort of legal limbo. The DOL brought some clarity to the status of the rule on June 30, 2017, in a brief filed with the Fifth Circuit Court of Appeals.

In a decision that received widespread media coverage, a Texas federal district judge in late 2016 blocked the Obama administration’s new overtime rule shortly before it was set to go into effect. Under that final rule, among other changes, the minimum weekly salary threshold to qualify for most of the white-collar overtime exemptions would have increased from $455 to $913

While the DOL argued that the injunction should be reversed, it did so on the grounds that the DOL should have the authority to set a salary level (the district court held, in a somewhat bizarre decision, that the DOL does not possess the authority to set a minimum salary level, a holding that the DOL continues to oppose). The DOL requested that the court not address the specific minimum weekly salary set by the 2016 final rule because the DOL intends to issue new regulations setting forth a revised salary level. In previous statements, DOL Secretary Alex Acosta has suggested that an increase in the salary level to approximately $30,000 per year would be more appropriate.

Jennifer Hagerman, Attorney Burch, Porter & Johnson PLLC jhagerman@bpjlaw.com www.bpjlaw.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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Disciplining Inefficiency in the Era of Apple Watch!

By MARY E. BUCKLEY

There are always those highly appealing, flashy distractions to which few employees are immune. These distractions vary among industries but generally may include March Madness and the enviably early “bust” of almost everyone’s bracket, Wimbledon, the Master’s Tournament, the Summer and Winter Olympics (including the dramatic “robbery” of Ryan Lochte), the World Cup, Senate hearings, Royal Weddings, etc..., that seem to transfix, at least the majority of an office. The result of these spellbinding happenings is that employees are watching these things during the workday and it results in paying them for wasting time at work. The constant barrage of distractions may be more acceptable when it is a Royal Wedding or the Senate hearing of a former FBI Director, yet many other distractions and the resulting inefficiencies at work are a problem throughout the year for most workplaces.

Apple Watch and Fitbit Alerts In addition to the annual sporting events or news spectacles, everyday technology can also cut into worker productivity. Wearable devices present a new challenge and opportunity for wasted time to occur. Take the Apple watch, which gives the wearer a minimum goal to stand one minute every hour. The Apple watch will alert the wearer to get up and move if the person has been sitting too long. The Fitbit gives the wearer a goal to reach 280 steps every hour and, just as with the Apple watch, it will alert the wearer that it is time to get up and earn steps.

While that is generally good for employees’ health, these kinds of notifications/interruptions can distract an employee from his or her work and will likely result in that employee proceeding to get up, walk around, and abandon the pending work project. While the break was initially taken to meet the health goal, it usually turns into a longer stop at the water cooler to talk to others, then finally returning to their desk and taking the time to focus back in on whatever the work was he or she was doing before the device ever vibrated. Regardless – it results in wasted time that can significantly add up over time.

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Distraction is a special kind obstacle to attention, and employers need to know how to manage these distractions and the time wasted by employees because of them. Many employers struggle with positive methods of how to discipline an employee who is wasting time at work because of everpresent wearable devices or smart phones. So, what are some possibilities?

The short answer when it comes to an hourly employee who is wasting time at work is to give that person a verbal and/or written warning. This is going to be the safest way to avoid wage and hour violations or other complicated employment law issues that could lead to litigation.

The Fair Labor Standards Act (FLSA) sets standards relating to minimum wage, overtime pay, equal pay, recordkeeping, child labor, deductions from pay, and even employee absences. The FLSA is extensive and complex.

Complying with it can test the sanity of even the most experienced HR managers and administrators. It also happens to be one of the most violated of all federal employment laws. The FLSA cannot be overlooked when the subject of how to discipline an employee for wasting time comes up, because docking an employee’s pay as a form of discipline may run afoul of the FLSA’s limitations.

Under the FLSA, an employer has to classify each employee appropriately as either exempt or non-exempt. To determine whether an employee is either exempt or non-exempt would be an HR Pro article in itself. So, for our purposes here, there are non-exempt or hourly employees and then exempt or salaried employees, and how an employer can discipline an employee for wasting time depends on the employee’s status and the written policies contained in an employee handbook.

Before getting into ways that an employee can legally be disciplined for wasting time at work, there are some issues that need to be discussed. First, you cannot discipline an employee for behavior the employee did not know was unacceptable. There should be a clear written policy in place about unacceptable and acceptable use of the internet and electronic devices for personal use during the workday. The policy should include specifics about what is allowed and what use can occur in regards to smart phones, tablets, electronic readers, wearable devices, and more.

Wearable devices can be just as distracting as a cell phones or tablets, and many connect to a smart phone. These wearable devices not only send the wearer constant alerts throughout the entire day, such as incoming texts, emails, tweets, Facebook message, and the like, but these devices also send alerts that specifically encourage the person to get up, leave their desk, and walk around (i.e. an alert to stop work) every hour. Prudent employers should not assume that a policy on smart phones or other devices covers wearables within its scope, especially as these wearable devices become more advanced (Google Glass, for example). Clearly-established expectations with wearable devices should be considered specifically for a workplace rule and then communicated to employees.

Second, the policy should be consistently enforced, regardless of whatever high profile event is going on (such as the office’s fantasy football league draft). One of the worst things an employer can do is not enforce a policy consistently, which can create a question of fairness about who is being disciplined and why, i.e. comparators. This consideration is further complicated if members of any protected class are involved.

Third, the policy should explain what the consequences are for violating the policy. This lets the employee know what kind of discipline he or she can expect for the unacceptable behavior.

Having a clear policy in place will not eradicate employee inefficiency due to wasting time. It is inevitable that some time (or a great deal of time)

will be wasted, and the employer will be paying for that Buzzfeed quiz or those 1,000 steps taken to reach that 10,000 step goal when he or she was supposed to be working.

It can certainly be tempting to want to make an example of someone who is excessively wasting time at work, but an unpaid suspension should not be a first step. A discipline process should be followed for each employee and each time. Initially, it will likely be a verbal and/or written warning to the employee when he or she violates the policy, as well as guidance that the employee is to continue to follow the expected standards of conduct.

If the first violation is a verbal warning, the second a written warning, and so on until suspension or termination, whatever the discipline policy of the company is, as stated in the handbook, should be consistently followed.

Docking Pay When it comes to disciplining the person by docking his or her paycheck, an employer has to be careful between exempt and non-exempt employees.

Your frustration with Jane, a salaried employee, for her endless internet shopping and reading her co-workers horoscopes out loud, should not been seen through her paycheck. Jane is salaried, and if you try and dock her wages then you may have just violated the FLSA, and she could now be due overtime pay. A salaried, exempt employee can be subjected to an unpaid suspension according to a written policy for violating company policies.

What a salaried employee can be disciplined for is limited to behavior violating a company policy, and what Jane did in the above example may very well violate work place rules on interfering with other’s work, poor work performance, loafing on the job, and/or idleness. If there is a written policy in place that allows for unpaid suspension as a disciplinary measure, then Jane can be suspended without pay.

If it is an hourly employee you have to discipline for wasted time, you can deduct from his or her hourly compensation, but only as long as the resulting pay rate does not fall below the highest applicable minimum wage before payroll taxes. While it sounds simple in theory, it is far from being a simple process. The problems with deducting from the employee’s pay are: (1) when the employee is not clearly informed on what behavior is acceptable; (2) when supervisors show favoritism and do not discipline consistently; (3) when supervisors discipline for the wrong reasons or in an illegal or abusive manner; and/or, (4) when there is no documented or collected evidence of employee behavior issues over a period of time.

However, just like Jane, an hourly employee can be disciplined with an unpaid suspension.

Conclusion It is an appealing idea to hit the employee where it hurts—his or her wallet—but the problems that can occur with deducting from an employee’s pay can result in litigation, wage and hour violations, and low employee morale. To avoid such issues, outline acceptable behavior, discipline with verbal or written warnings to begin with, and if the behavior is still persistent, dismiss or suspend the employee without pay (both hourly and salaried) for violating the policy. Consider providing supervisor training on monitoring and enforcing these challenging issues as well. As tempting as it is to look the other way during the World Cup, employers should remind employees that scores of the games, twitter rants, and earning 2,000 steps can wait until their breaks or when the work day is done.

Mary E. Buckley, Associate Cross, Gunter, Witherspoon & Galchus, P.C. mbuckley@cgwg.com www.cgwg.com www.HRProfessionalsMagazine.com

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Job Level and Income Bracket

Salary History Disclosure by Job Level

The Salary History Question:

Asked Rate of Job Level

(overall) Refusal VPs and Executives 54% 26% Directors 52% 23% Managers/Supervisors 45% 22% Individual Contributors 41% 22%

Alternatives for Recruiters and Hiring Managers

T

he salary history question has been a staple of job interviews for many years.

The intention behind the question, on behalf of the companies, is to determine whether the candidate’s expectations are in line with what they intend to pay for the position, although some argue that companies are trying to ascertain the lowest number they can offer the candidate and still get a “yes.”

Some believe that the salary history question runs the risk of perpetuating lower pay for those who have traditionally been paid lower, such as women, contributing to ongoing pay inequity or a pay gap. The thinking goes that if people have been routinely discriminated against because of gender, race or some other factor, their pay may be lower than the market value for the position. So, asking people their pay history as a means of determining a fair future pay offer may not actually be fair at all.

As a result, several cities and states have developed or are developing legislation around the salary history question, taking it off the approved list of questions during the recruitment process. While employees are jumping for joy (and money), some companies are less enthusiastic about the prohibition of the question. But just how prevalent is the salary history question? And what is the impact, to individuals and organizations, of asking about prior pay?

How prevalent is the salary history question?

In 2017, PayScale conducted a study to determine the prevalence of the salary history question. It turns out that while it may feel ubiquitous, it’s not actually as prevalent as you might think. In fact, when we surveyed over 15,000 job-seeking employees, only 43 percent were asked about their prior pay at any point during their interview process. In the study, PayScale identified four types of responses: 48

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Percent

Not asked, didn’t disclose 51% Declined to answer 10% Asked and answered 33% Volunteered 6% In addition, we calculated the rate of refusal: those who didn’t disclose after asked for salary history compared with all those who were asked. The overall rate of refusal was 23 percent. Interestingly, median pay was highest among those who refused to disclose their pay ($67,200). That may be due to sheer confidence, job level or several other reasons, but the facts still hold.

Industry, Job Group and Job Title • The most likely employers to inquire about salary history are in the Finance & Insurance industry (45 percent “asked and answered”), which also has one of the lowest rates of refusal (18 percent).

• The most likely job groups with “asked and answered” responses are Human Resources (44 percent), Marketing & Advertising (43 percent) and Accounting & Finance (40 percent). In fact, the number one job title with “asked and answered” responses was Human Resources Manager, where more than half were asked about their salary history and disclosed it.

• Values-driven industries and job groups are the least likely to inquire about salary history: 64 percent of nonprofits and 61 percent of education employers reflected “not asked, didn’t disclose,” and 67 percent of Social Services were “not asked, didn’t disclose.”

• The most likely workers to volunteer pay history were Outside Sales Representatives (22 percent), a job where prior pay is often a direct indicator of performance.

• Salary history is more likely to come up in an interview as you move up the career ladder, and the rate of refusal also increases the higher you go. VPs and Executives make up the group most likely to volunteer their salary history (10 percent, vs. 5 percent of individual contributors) and the most likely to decline to disclose (14 percent, vs. 9 percent of individual contributors).

• People seeking higher income jobs are more likely to be asked about their salary history, but those who declined to answer tend to be at the highest income bracket.

Demographic Differences • Interestingly, there was no significant difference by gender when it came to the likelihood of disclosing or not disclosing salary history. However, a woman who is asked about her salary history and declines to disclose earns 1.8 percent less than a woman who discloses. If a man declines to disclose, he gets paid 1.2 percent more on average.

• The rate of refusal is higher among baby boomers than millennials: twenty-eight percent of Boomers declined to disclose their salary history when asked, vs. 22 percent of Generation X and 18 percent of the Millennial generation.

• One of the highest refusal rates by metropolitan statistical area was in the Boston area, where the salary history question will become illegal in 2018. The Boston refusal rate was nearly twice that of the lowest rate of refusal, found in the Chicago area (30 percent vs. 16 percent).

What can companies do in lieu of asking the salary history question?

Let your pay brand drive your decisions The way you pay says a lot about you. During the interview process, the way you communicate about pay says much more than the actual dollar figure you’re offering in terms of salary. Whether overtly or not, you’re passing along information about how your organization

makes decisions about pay, how open your organization is to discuss the rationale for pay and ultimately how transparent and innovative your organization is about rewarding employees.

their time talking with candidates. In very practical terms, sometimes the budget for the job and the expectations for the job are too far apart to bridge. There’s another way. In fact, there are a few:

Asking “what’s your salary history?” indicates to candidates that your organization is the type that tries to haggle employees down and pay them as little as possible. It tells your prospective employees that you aim for bargain talent. Is that the type of values you’re hoping to project? If not, drop the question.

• Instead, ask “What are your salary expectations?” This gives the candidate the ability to share what they seek to make for the role. It lets you decide if you should keep talking with them. It also tells you whether they’ve done their homework or not. If they don’t answer with “Well, I’ve been researching and it seems that the going rate in the market is…” that gives you more information about their work as a potential employee.

Let the market guide your compensation offers Here’s another compelling reason to drop the question: With so much market data available to employees, they are starting to come to interviews armed with compensation data reports in hand. The trick is that they don’t always have the right compensation data. Maybe your organization is in a rural area and they are bringing data from a major metropolitan city across the country. Maybe you’re a smaller organization and they’re bringing data from some of the largest employers. Or perhaps you’re a non-profit and they’re bringing tech industry data to validate their preferred salaries.

You have to get ahead of the data game by bringing your own competitive market compensation data to the interview process. Knowing the numbers can help increase trust between candidate and recruiter, future employee and organization. Data that employees access isn’t always packaged for business use. When you identify your market data points, you’re making some key choices about how you prioritize pay in your organization, whether you know it or not.

Have useful conversations about pay One of the main objections we hear about discontinuing the salary history question is that it’s useful for recruiters to know whether or not to waste

• Instead, share your hiring range for the position and explain why the range is set where it is. “We’re trying to grow such and such area, so as a result we’ve targeted very competitively in the market. Our hiring range is X to Y. Let’s talk about where you’d fit into that range based on your experience, skills and project results.”

• Instead, reinforce the value of the position relative to the organizational goals and objectives, reiterate the market value for the role, and engage a conversation about what motivates the employee. “This position helps us ensure our customers get the best service, which is core to our organizational values. We recently did a market study and found that X is typical for the role. Are you most motivated by pay? Flexibility? The ability to really make an impact in the organization? How do you see yourself thriving in our organization?”

Ultimately, the salary history question seems to be on its way out, but that doesn’t preclude organizations and future employees from having meaningful conversations about pay. It starts by clarifying organizational priorities, understanding your culture, determining the market value for your positions and then messaging those to your prospective employees through the types of information you share during the recruitment process.

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Health Care Bills Would Provide Limited Relief to Employers

By DWAYNE O. LITTAUER

The two health care reform bills in Congress would provide some relief to employers. But the relief is less than many employers had sought.

Here are some items that employers would find helpful.

EMPLOYER PENALTY. An important relief to employers would be the repeal of the Affordable Care Act (ACA) employer shared responsibility penalty retroactively to January 1, 2016. These rules apply to employers with 50 or more full-time or full-time equivalent employees. To avoid $2,000 or $3,000 penalties per full-time employee, these rules have required many employers to offer health coverage to new groups of employees and adopt complex look-back measurement rules to determine full-time employee status. They impose deadlines to offer coverage, which must meet affordability requirements. As a result, many employers added new low-level coverage tiers.

CADILLAC TAX. The 40% tax on high cost health coverage would not be repealed. Instead it would be delayed until 2026. The cost of coverage would include not only the group health plan but also health flexible spending account (FSA) contributions, whether made by the employer or by the employee through pre-tax deferrals, employer contributions to health savings accounts (â&#x20AC;&#x153;HSAsâ&#x20AC;?), on-site clinics, or specified disease, hospital indemnity, or fixed indemnity insurance if paid on a pre-tax basis.

Regulation guidance will be needed on determining the cost of self-funded coverage.

HSA CONTRIBUTION LIMIT.

The 0.9 percent additional Medicare

The 2017 HSA contribution limit is $3,400 for those with individual coverage and $6,700 for those with family coverage. Both bills would increase the limits to be the same as the out-of-pocket maximum limits for high deductible health plans, which are indexed for inflation (for 2018 they will be $6,650 for individual coverage and $13,300 for family coverage).

HEALTH FSA LIMIT.

payroll tax for high

The limit on contributions to a health FSA (currently $2,600) would be lifted. This would be effective in 2017 under the House bill and in 2018 under the Senate version.

income individuals

OVER-THE-COUNTER DRUGS.

would be repealed, but not until in 2023.

The ACA limited health plan reimbursement of medicines and drugs only to insulin and prescribed drugs. Over-the-counter medicines could not be paid without a prescription. Both bills would allow plans, such as HSAs and health FSAs, to pay for over-the-counter drugs without a prescription beginning in 2017.

MEDICARE TAX. The 0.9 percent additional Medicare payroll tax for high income individuals would be repealed, but not until in 2023.

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Employers will be disappointed to find that many ACA provisions would remain unchanged.

EMPLOYER REPORTING. Even though the employer shared responsibility penalty would be repealed, Forms 1094-C and 1095-C reporting would remain in place. Many employers have found these forms, including their complicated offer and exemption codes, to be unduly burdensome.

Rejected form and data errors have been particularly vexing.

Form W-2 reporting on health coverage would remain in place.

While the Senate bill would make no change, the House bill would actually make it more burdensome by requiring employers to indicate the months in which an employee was eligible for coverage.

PCORI TAX. The Tax on Insured and Self-Funded Plans to Fund Patient Centered Outcome Research (PCORI) fees of $2 per covered life (adjusted for inflation) would remain in place until 2019.

SECTION 1557 NONDISCRIMINATION RULES. No change would be made to the Section 1557 nondiscrimination requirements. These apply, among other things, to health care providers who receive reimbursements from Medicaid or Medicare Part A. Covered entities must meet nondiscrimination requirements, which regulations interpreted as requiring the employer's group health plan to cover transgender surgery in some cases. It includes requirements for a long and a short notice. The long notice must be posted on the covered entity's website and include taglines for the 15 largest languages in the state. The rules requires establishment of a grievance procedure.

CONCLUSION. The legislative process is still ongoing. The bills described above could be changed further. It is possible that neither bill will be enacted.

The parties might confect a joint bill. The overhaul process could cease entirely. The ACA might survive and be subject to incremental changes over time.

GRANDFATHERED PLANS. No change would be made to the grandfathered plan rules. These rules impose complicated cost and coverage change limitations in order for a plan to remain grandfathered. They also limit increases in employee cost sharing.

Plans would still have an incentive to remain grandfathered to be exempt from several ACA requirements. These include the non-discrimination rules for fully-insured plans, which have allowed management-only plans to remain in place. These rules have been suspended pending issuance of regulations. Non-grandfathered plans must cover clinical trials, which are often non-network and can be very expensive. Grandfathered plans need not provide a broad preventive coverage with no cost sharing. The requirement to cover a variety of contraceptive coverage methods has been controversial. Grandfathered plans are not subject to the ACA claim and appeal rules, which are more favorable to claimants and require offering external appeals.

MARKET REFORMS. The proposed legislation would not change the prohibitions against annual or lifetime dollar limits on essential health benefits. Children would be allowed to remain covered until age 26 without regard to student status, marital status, or whether they are financially dependent on their parents. The prohibitions against preexisting condition limits and certain rescissions of coverage would remain in place. The 90-day maximum waiting period would not be changed.

No change would be made to the requirement concerning coverage of and cost sharing for non-network emergency services, allowing covered persons to designate a primary medical provider and pediatrician, and access to obstetric and gynecological providers.

PREEXISTING CONDITION LIMITS. Plans would still be prohibited from imposing preexisting condition exclusions.

Dwayne O. Littauer, Shareholder The Kullman Firm dl@kullmanlaw.com www.kullmanlaw.com

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Attorney responsible for content of this ad: Martin J. Regimbal www.HRProfessionalsMagazine.com

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SCOTUS Ruling on President Trump’s Travel Ban

By LILY S. AXELROD

How did we get here?

On January 27, the President threw businesses, families, airports, and government agencies into chaos with a simple and sudden executive order: nationals of seven countries were immediately prohibited from traveling to the United States.

In the next few days, the reality on the ground was in constant flux with new announcements about who was subject to the ban. Airports and consulates interpreted the order inconsistently. Affected employers, institutions, and families quickly brought lawsuits challenging the legality of the travel ban, and federal judges responded by blocking application of the ban to certain categories of individuals.

President Trump ultimately withdrew the first version of the ban, and issued a new version with a more limited scope. “Travel Ban 2.0” removed Iraq from the list of affected countries, leaving Syria, Libya, Yemen, Somalia, Sudan, and Iran. The second version also exempts lawful permanent residents (“green card holders”) as well as those who have already entered the US with valid visas.

The new version of the travel ban never fully went into effect, because federal courts immediately blocked it in its entirety. These court injunctions are not final decisions on the legality of the executive order; rather, they are preliminary decisions putting the ban “on hold” while the courts engage in the slower process of determining whether the ban is legal.

The Trump administration appealed, asking the Supreme Court to allow implementation of the ban to go forward while the lawsuits continue in the lower courts. On June 26, the Supreme Court announced that most of the ban would remain “on hold.” It made one exception, allowing the administration to block entry of a narrow class of individuals from affected countries: those who could not prove a “bona fide relationship with a person or entity in the United States.”

The Supreme Court offered little guidance about what types of family and business relationships would qualify. The Trump administration seized on this ambiguity, announcing its own narrow guidelines. The administration limited qualifying family relationships to parents (including in-laws), spouses, children, adult sons and daughters, and siblings (and, a few days later, fiancé relationships).

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On July 13, the Federal District Court for the District of Hawaii found that the administration’s definition of “close familial relationship” was too restrictive, and ordered the government to exempt several additional categories of relatives from the travel ban: grandparents, grandchildren, siblings-in-law, aunts and uncles, nieces and nephews, and cousins.

The Trump administration was outraged by the Hawaii court’s limitations on the ban, and requested that the Supreme Court step in to clarify its June ruling. The Supreme Court upheld the Hawaii court’s July 13 expansion of the familial relationship definition, but allowed the government to continue restricting some refugees from entering while the Ninth Circuit court considers an appeal on that issue.

The Supreme Court will have new hearings on the case when it resumes its regular session in October.

Who is allowed to enter the country today?

As of June 20, the ban is still mostly “on hold.” People from the affected countries who have valid visas can continue to travel, and people who are eligible for new visas can continue to apply. New visa applicants must show a “bona fide relationship to a person or entity in the United States,” or must apply for a waiver of that requirement.

Qualifying family relationships now include: parents (including in-laws), spouses, fiancés, children, adult sons and daughters, siblings and siblings-in-law, grandparents and grandchildren, aunts and uncles, nieces and nephews, and first cousins.

Employers can continue to petition for employees from the affected countries. The administration has stated that it will allow entry to workers who have accepted an offer of employment from a company in the United States. Employers and their representatives must continue to take due care to show that the employment relationship is bona fide, “formal, documented [and] formed in the ordinary course” rather than for purposes of evading the travel ban. Employees applying for a visa after accepting a new job offer should be prepared to explain to the consular officer how they received the job offer, what their job duties will be, and how they are qualified for the job.

The Trump administration has also clarified that students who have already been admitted to a US educational institution are exempt

from the ban, as are lecturers invited to address an audience in the US. An applicant for an I visa employed by foreign media may also be exempt if that foreign media organization has a US-based office.

Self-petitioning immigrants, including O-1 individuals with extraordinary ability, are at greater risk of being excluded under the ban if they cannot show a bona fide relationship to a US entity. If the O-1 applicant does not have a bona fide job offer or other relationship with an entity such as a university, they may need to apply for a waiver.

People who are subject to the ban but otherwise eligible for a visa can request a waiver, which consulates will decide on a case-by-case basis. To grant a waiver, the consular officer must be satisfied that denial would cause “undue hardship,” the applicant does not “pose a threat to national security,” and that the applicant’s entry is “in the national interest.” The administration has not announced any specific procedure for requesting the waiver, or guidelines for how consular officers are expected to apply this standard.

It is not yet clear how the administration will treat business visitors applying for short-term B-1 visas to attend conferences or trainings in the United States, without a longer-term relationship with a US company or organization.

Travel Ban 2.0 already expired, Trump may re-issue Travel Ban 2.0 with new dates. He could also formulate a new ban to address the Supreme Court’s substantive concerns, or he could give up entirely and abandon the prospect of a travel ban to focus on other priorities.

What can employers do to minimize disruption to their business in this uncertain climate?

When an employee from one of the affected countries wishes to travel outside the United States, employers should seek legal counsel to make sure they have up-to-date advice about how the ban could apply to the employee, and what could change suddenly while the person is outside the country.

Employers can also speak out, sharing stories with media and elected representatives about how their business is affected by the chaos and uncertainty of the travel ban. Employers whose operations have been affected should consider filing or joining lawsuits challenging the ban.

Employees with lawful permanent residence (green cards) are least likely to be affected by any future travel ban. Employers should consider sponsoring any eligible employees for employment-based green cards, or supporting employees in seeking green cards through other routes such as family-based petitions or asylum.

What could change over the summer?

Federal judges will continue to hear challenges throughout the summer to the Trump administration’s interpretation of the Supreme Court’s guidance. The courts could offer further clarity about whom the administration can exclude, especially for situations that are currently ambiguous such as B-1 business visitors. The administration could also revise its guidelines at any time.

President Trump could also decide to withdraw Travel Ban 2.0 entirely at any time. If he does this, immigration from the affected countries would resume as normal, unless President Trump attempts to issue a new Travel Ban 3.0, surely prompting immediate and aggressive litigation.

Lily S. Axelrod, Immigration Attorney Siskind Susser PC laxelrod@visalaw.com www.visalaw.com

SISKIND SUSSER PC Tennessee’s Largest

What could change when the Supreme Court considers the case again in October?

Business & Employment Immigration Practice

The Supreme Court will hear oral argument on this case in October, and will likely issue a decision within a few weeks or even days.

The Court still cannot rule on whether the travel ban is ultimately legal. The only issue presently on appeal is whether the travel ban should continue to be “on hold” while lower courts consider whether the ban is legal. Litigation on the underlying issue could drag on for years, and could reach the Supreme Court again.

The Court may decide to leave its June decision in place, and could offer further clarification. The Court could instead decide to allow the full travel ban to go into effect (as Justices Thomas, Alito, and Gorsuch wanted to do in June). The Court could change which pieces of the ban go into effect. The Court could also decide to put the entire ban back “on hold,” thus ending the summer’s arguments about “bona fide relationships.”

The Court may also decide that the whole case is moot, due to confusion in the language of the executive order about when it goes into effect. The initial language of the March 6 executive order specified that it would apply for 90 days beginning on March 16. The Court specifically requested that the parties address in their arguments whether the ban thus expired on June 14. If the Court decides that

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5

ways to boost your emotional intelligence during your vacation

By HARVEY DEUTSCHENDORF

It’s that time of year many of us at work look forward to all year, taking our holidays. This is a time we can get away from the stressors in the workplace to relax, regenerate, let loose and just have fun. The idea of doing anything that even remotely reminds us of our work might not seem very appealing.

However, vacation time doesn’t have to be dead time when it comes to our self-improvement. The good news is that we can increase our skill set while relaxing, having fun and getting away from the stressors of life. We just do it in ways that fit seamlessly into our holiday mode. According to the World Economic Forum, emotional intelligence will be one of the top Job Skills by 2020 Skhttps:// www.weforum.org/agenda/2016/01/the-10-skills-you-need-to-thrive-in-thefourth-industrial-revolution/ills by 2020. Boosting our emotional intelligence is something we can easily do in fun ways during our holidays.

Here are 5 ways we can do this: Increasing Self-awareness During vacations we tend to slow down, unwind and let our minds wander away from pressures in our day-to-day life. Or at least that’s what we are told, hope for and intend our holidays to be. Since self-awareness is the basis of emotional intelligence, we can notice things about ourselves that we don’t do in our everyday lives.

What kind of people irritates us? What kind of people are we drawn to? Who do these people remind us of? Being in a laid back, relaxed state is an excellent time to do some self-reflection.

Increasing Empathy Holidays are a great time to people watch. While doing this we could make a game out of noticing things about people with our friends and family and having discussions about them. Notice people and their facial expressions, posture, dress and manner of walking are all great ways to gather clues about what is going on for them.

This could also be used when going to movies, restaurants and live performances. It’s also a great way to engage with those we are close to that we are on holidays with.

Not only will this increase our empathy but may also add depth and meaning to our vacation experiences.

Increasing Assertiveness Many people struggle with asking for what they want and therefore miss out on getting more from life. The worst that can happen is getting a no, in which case, 54

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we are no worse off than before we asked. However, we could get a yes. Vacation time is a great time to practice stretching our "asking muscles". When checking into our accommodation, we could ask for an upgrade. If there is a problem with our meal at a restaurant we could tell the server. Because we often won’t see the people we are dealing with again, it may be easier to practice asking for what we want. Moving out of our comfort zone and asking for things we normally don’t ask for will make it easier to do it next time. It will also give us a feeling of satisfaction and increase our self- esteem.

Goal Setting and Visualization Vacations are a great time to revisit previous goals and, or set new ones. Away from our everyday routine gives us an opportunity to take a look at where we are in our life and contemplate where we would like to be. Just being away from the daily practices provide us with a great opportunity to refocus and do an inventory of our lives.

The stimulation and new experiences that come with vacations bring us out of our normal comfort zones and can stimulate new thoughts and ideas of new aspirations.

For myself I tend to be more creative and insightful when vacationing in the mountains or by the ocean. Is there a special place that does the same for you? If you are going back to a job/career that is not satisfying, this could provide you with the first steps towards making needed changes in your life towards more fulfilling work.

Being able to get away and do some self-reflection has resulted in many people coming up with life changing ideas during their holidays.

Increasing Stress Tolerance While we may tell ourselves that we intend to do things like meditate daily, life gets in the way and other things come up that seem more important. Vacations give us the opportunity to return to what we should do for ourselves, but don’t make time for. We can also try new things and stretch ourselves. We may find rewarding and relaxing ideas and decide to incorporate them into our daily lives when we return home. We may even discover new areas that we want to consider trying as a new career or business.

Harvey Deutschendorf 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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I worked in Huangshan, China for seven years

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