Volume 6 : Issue 12 TM
Compensation and Performance Management Does
The Changing Perspective on
Emotional Intelligence Influence How Much Money We Make?
Market Based Only Salary Structures
Bruce & Blair
Realizing the Future of
In Employee Benefits â€“ Part 2
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* Projection from Willis Towers Watson’s “Voluntary Beneﬁts and Services (VBS) Survey” ** Figure courtesy of the Identity Theft Resource Center Data Breach Report, December 31, 2015.
Bringing Human Resources & Management Expertise to You With similar education and experience, women earn 82% of men’s salaries 10 years after graduating from college. 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
R. Alex Boals Bruce E. Buchanan Brenda N. Canale William Carmichael Megan Connell Harvey Deutschendorf Sean Dryden Brad Federman Christine Ferris Tannera Gibson Alex Gramling Jimmy Hinton M. Kimberly Hodges Russell Jackson Stuart Jackson Bruce and Blair Johanson Jennifer S. Kiesewetter Chris Menard Kerstin Nemec Tim Norwood Joel Myers Blake Rogers Martin F. Thompson Ahu Yildirmaz 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. ©2016 The Thompson HR Firm, LLC | This publication is pledged to the spirit and letter of Equal Opportunity Law. The following is general educational information only. It is not legal advice. You need to consult with legal counsel regarding all employment law matters. This information is subject to change without notice.
3 70% of Companies Will Offer it by 2018 6 note from the editor 7 Profile: Bruce and Blair Johanson, Arkansas Compensation Gurus 44 Book Look: Recognizing & Engaging Employees for Dummies 45 In Memory of John E. Megley III 46 Highlights from the Talent Reality Workshop November 1
WEB EXCLUSIVES HTTP://HRProfessionalsMagazine.com /Exclusive
Compensation and Performance Management
12 3 Reasons Millennial Women Are Still Experiencing Gender Income Inequality 14 Changing Perspective on Performance Appraisals 18 Does our Emotional Intelligence Influence How Much Money We Make? 22 Will Market-Based-Only Salary Structures Survive Regulatory Reviews and Scrutiny?
4 Build a Better Benefits Package 24 Realizing the Future of Big Data in Employee Benefits – Part 2 26 Deciphering Fuzzy Language Under the ADA 28 HR Professionals Beware of Potential Antitrust Laws 30 What is Going to Happen to Healthcare in America? Profiles of Top Employee 31 Highlights from the 7th Annual MSBGH Healthcare Summit Benefits Companies 38 Rising Drug Costs Trending Up 40 How Healthcare Workers Are The New Epidemic in Workplace Injury 42 Open for Business Means Open for Benefits
10 2016 Roundup of Major State Employment Developments 16 37th Annual Wimberly Lawson Employment Law Update Conference 19 Breaking Down the Cornucopia of U.S. Immigrations Laws 20 Paid Sick Leave for Federal Contractors 26 Deciphering Fuzzy Language Under the ADA 28 HR Professionals Beware of Potential Antitrust Laws! 32 Post-Election Update: What Should Employers Expect from the Trump Administration? 34 Treading the Muddy Waters of the ADAAA 43 MBA Annual Seminar on Labor and Employment December 2
8 SHRM-Memphis HR Excellence Awards November 15 21 WTSHRM 7th Annual Human Resources & Employment Law Fall Conference November 2 37 NEMSHRA Workshop for Supervisors, Managers, and HR Professionals October 11 46 North Central MS HRA Meeting October 19 www.HRProfessionalsMagazine.com
a note from the Editor
(L-R) James Wimberly, Jr., Cynthia, and Ron Daves at the Thursday evening reception during the Wimberly Lawson 37th Annual Labor and Employment Law Conference in Knoxville November 3-4.
focus of our December issue is compensation and performance management. You are going to enjoy reading about the Johanson twins, Blair and Bruce, who are partners and co-owners of two HR management consulting firms in Fayetteville, AR. They have spent their entire careers in human resources since graduating from college before joining the family consulting business in 1999. Bruce has been a member of the NOARK Human Resources Association since 1986 and has served as President, Board member; Chair of several committees, and state conference chair and is a member of SHRM. They assist clients with developing and maintaining job classification and compensation plans for their organizations. In addition, they work with local SHRM chapters, state compensation and banking associations and organizations, representing various business sectors in the development and distribution of annual salary and benefit surveys.
We have quite a few articles in this issue to bring you up-to-date on the latest in the world of compensation and compensation management. ADP has provided an interesting article about millennial women and gender income inequality. Joel Myers and Brad Federman have written a wonderful article on the changing perspective of performance appraisals that you will love. Blair and Bruce Johansan provided an excellent article about market-based-only salary structures and regulatory scrutiny that you donâ€™t want to miss. And I know you will love reading about the correlation between emotional intelligence and your salary by Harvey Deutschendorf. Plus we have articles on employment law and benefits that are must-reads. Since it is the season of giving, donâ€™t forget to make your donation to the SHRM Foundation. Each year they provide over 200 scholarships to HR practitioners and students to help in their pursuit of HR certification and HR graduate and undergraduate degrees. They also provide much needed research for the HR community that you will not find anywhere else. We salute Mark Schmit, Ph.D., Executive Director of the Foundation, and his team for their work in advancing global human capital knowledge and practice by providing thought leadership and educational support. Next month our emphasis will be on top employee benefits companies. I hope you will join us for our monthly complimentary webinar sponsored by Data Facts. As always, you will receive SHRM and HRCI credit. Best wishes for a beautiful holiday season with your loved ones. Happy holidays!
Bruce & Blair on the cover
BRUCE & BLAIR JOHANSON Principal Partners and Co-Owners, Johanson Group & DB Squared, LLC Bruce (L) and Blair (R) Johanson are Principal Partners and Co-Owners of two Fayetteville, AR based companies, Johanson Group, an HR/Management consulting firm and DB Squared, LLC, an HR/Compensation software company. Bruce has been with Johanson Group for 30 years and Blair joined the family consulting business in 1999. Bruce was in Human Resources within the oil and gas industry his first five years after college. He has taught credit and non-credit classes at the University of Arkansas, Arkansas Tech University and Webster University since 1984. Blair completed twenty years in health care human resources and hospital administration prior to joining the family consulting firm. Both brothers partnered with Dale Oliver to form DB Squared, LLC in 2005. Bruce has been a member of the NOARK Human Resources Association since 1986 and has served as President, Board member, Chair of several committees, and state conference chair and is a member of SHRM. The brothers serve as board directors for several local non-profit organizations and they both are members of the Fayetteville Downtown Rotary Club. Blair and Bruce have consulted with numerous organizations and companies located primarily in Arkansas, Oklahoma, Missouri, Kentucky and Tennessee. Johanson Group and DBSquared have clients located in over 30 states. Most of the Johanson Group clients have requested assistance with developing and maintaining job classification and compensation plans for their organizations. In addition, Johanson Group has worked with local SHRM chapters, state compensation and banking associations and organizations, representing various business sectors in the development and distribution of annual salary and benefit surveys. Blair and Bruce have HR and business management careers approaching 40 years each. They both hold degrees in Human Resources Management and Masters in Business Administration from the University of Arkansas Sam M. Walton College of Business. ď Ž
The SHRM-Memphis Human Resource Excellence Awards will offer an exciting opportunity to recognize organizations both large and small as well as Individuals for outstanding human resource initiatives that significantly advance the field of Human Resource Management.
NOW OPEN FOR NOMINATIONS: www.SHRM-Memphis.org
Tuesday, November 15, SHRM-Memphis Human 2016
Resource Excellence Awards
Breakfast Holiday Inn-University of Memphis 7:30 to 9:00 am November 15, 2016 at 8 AM
Holiday Inn University of Memphis
SHRM-Memphis Human Resource Excellence Awards
Keynote speaker: 1 2 3 4 Cynthia Y. Thompson , MBA, SHRM-SCP, SPHR Showcase your 1 Tisch McDaniel, 2016 SHRM-Memphis President, welcomed members and guests. 2 Cynthia Y. Thompson, Editor | Publisher HR Professionals Magazine, WHY ENTER?
The Thompson HR Firm LLC organization’s was theexcelkeynote speaker. Her topic was “Achieving HR Excellence.” 3 Judy Bell, Judy Bell Consulting, presented a tribute to George Mabon. The George Editor/Publisher HR Professionals Magazine lence in employee Mabon HR Executive of the Year Award was presented to Tisch McDaniel, Director of Pension, Benefits & HRIS at Verso Corporation. 4 Verlinda Henning, President-Elect of SHRM-Memphis and owner of Faith People: HR Services for the Faith Community, presented the HR Lifetime Achievement Award to Judy Bell. management—educate, Award Presentations: motivate and inspire
Benchmark your company across the industry
HR Student of the Year
Celebrate your hard
George Mabon HR Executive of the Year
HR Emerging Leader Memphis HR Champion 5
Lifetime Achievement Award
5 Diane Heyman, SVP Human Resources at ALSAC St. Jude Children’s Cancer Research Hospital, presented the HR Emerging Leader Award to Dr. Mario Brown with First Horizon National Corporation where he is Manager, Leader Assessment & Development. 6 Nancye Claxton, SHRM-Memphis Vendor Email firstname.lastname@example.org with questions Relations Co Chair and Sr. Account Manager with Pro-Tech Systems Group, Inc, was the recipient of the Memphis HR Champion Award presented by David Estel, National Accounts Manager with Data Facts, Inc. 7 Dr. Kathy Tuberville with the Fogelman School of Business at the University of Memphis presented the HR Student of the Year Award to Tyler Stegall, a University of Memphis student and member of the University of Memphis SHRM Student Chapter. 8 Tyler Stegall was the recipient of the HR Student of the Year Award.
9 University of Memphis SHRM Student Chapter under the direction of Dr. Kathy Tuberville and Dr. Carol Danehower with the University of Memphis Fogelman Business School. 10 Family and friends of George Mabon were honored at the SHRM-Memphis HR Excellence Awards where the inaugural George Mabon Executive of the Year Award was presented in his honor. (L-R) Shawn Mathews, George’s partner; Dorsey Patterson, George’s brother-in-law; Rita Patterson, George’s sister; Odessa Mabon, George’s mother; Lauren Price, George’s daughter; Michael McDonald, George’s best friend. 8
Judges for the SHRM-Memphis HR Excellence Awards
Austin Baker HRO-Partners
Judy Bell Judy Bell Consulting
Dan Weddle President of Pro-Tech Systems Group, Inc.
David Estel Data Facts, Inc
Verlinda Henning SHRM-Memphis Board of Directors
Cynthia Thompson HR Professionals Magazine
Nominees for the HR Excellence Awards
George Mabon HR Executive of the Year Award Tisch McDaniel with Verso Corporation Antoinette Wiseman with Independent Bank Joy Johnson with Hilton Worldwide
Memphis HR Champion Award Nancye Claxton with Pro-Tech Systems Group, Inc. Jessica Van Eyck with Vaco Shana Scales with Baptist Memorial Care Corporation
HR Emerging Leader Award Dr. Mario Brown with First Horizon National Corporation Rolana Bourland with Barnhart Crane & Rigging Shana Scales with Baptist Memorial Health Care Corporation
HR Student of the Year Tyler Stegall from University of Memphis Rachel Junkins from University of Memphis Summer Rudd from Christian Brothers University
The Lifetime Achievement Award recipient was selected by the SHRMMemphis Board of Directors.
Employment Developments By MARTIN F. THOMPSON
The year 2016 is almost over, and what has occurred besides the biggest upset in presidential politics since Dewey almost beat Truman? In the area of state employment laws covering only Arkansas, Georgia, Kentucky, Mississippi and Tennessee, 2016 provided much new material from state legislatures and courts for an employer’s watch list. This summary contains some of those new laws and court decisions that concerned employers should know.
1. Arkansas’ Medical Marijuana Amendment, Issue 6 – On November 8, 2016, Arkansas joined the states approving the legal use of medical marijuana, knowing federal law considers such activities illegal. Significantly, this was done by constitutional amendment, not statute, which requires voter approval via a referendum to make medical marijuana illegal again. Importantly, this amendment states that an employer cannot discriminate against or penalize a person who is or was a qualified patient or caregiver under this law. Contrarily, most cases in other states approving medical use of marijuana have favored employers enforcing rules against marijuana users based on the federal laws. So, it may be only a matter of time before an Arkansas case will decide if an employee may recover for an adverse employment action due to medical marijuana usage. 2. Act 921 Requires Courts to Reform, Not Strike, Non-Compete Terms That Are Unreasonable or Overly Broad – Although this law became effective in April 2015, its coverage was not widely discussed. It applies only to employment non-competition agreements, not those associated with the sale or purchase of a business; agreements not to solicit, recruit or hire employees; confidentiality agreements; non-disclosure agreements; and employment agreements. The Act lists protectable interests that may be covered, and then seems to limit state courts from considering other possible interests as protectable: “. . . other valuable employer data that the employer has provided to an employee that an employer would reasonably seek to protect or safeguard from a competitor in the interest of fairness.” While it adopts many current case laws on non-competes, it changes others, such as explicitly saying the lack of a specific geographic restriction does not make a covenant overly broad if the agreement is otherwise limited in time or scope to adequately protect the employer’s interests. 10
Most importantly, the Act changes the prior practice of dismissing agreements found to be unreasonable, and requires courts to reform the agreement to make its limitations reasonable and impose a restraint no greater than needed to protect the employer’s business interests. It then requires the courts to enforce the reformed agreement. 3. Arkansas Supreme Court: Arkansas Minimum Wage Act (AMWA) Makes Donning and Doffing Compensable – From a class action complaint filed against Gerber Products Company in Sebastian County, The Arkansas Supreme Court found that the AMWA considers donning and doffing as compensable work, despite the FLSA exempting donning and doffing in collective bargaining agreements. The employer was required to pay over $3 million for such activity at its Arkansas facility. So unionized employers who require employees to wear specific gear, uniforms or clothing may not rely on a union’s agreement about non-compensable work under the AMWA. Consult an attorney soon.
1. Georgia’s New Garnishment Law – SB 255 was signed into law and became effective in May 2016 to repeal and replace the current garnishment law. SB 255 presents many changes, mostly in the notices to employees, such as making the creditor and employer send to the employee an updated list of funds which are exempt from garnishment. Also, a defined process is set for claiming an exemption for funds or property, making courts hold hearings within ten days of filing a claim and requiring exempt money to be returned in 48 hours. Also, new forms are created and new information is needed to answer a garnishment, including when the wages were earned and the priority of other garnishments, if an employee has more than one. The safe harbor rule still exists for employers acting in good faith, but with all the changes and the dire consequences of non-compliance, it is advisable to consult your employment lawyer about this new law.
2. Governor Vetoes Religious Freedom Law – In March 2016, the Free Exercise Protection Act was vetoed by Governor Deal due to its proposed language permitting discrimination and his review of the law indicating it was not good for the character of the state and its people. The law had passed the House by 104-65 and the Senate by 37-18. 3. Clarkston, GA Enacts $15 Minimum Wage for Municipal Employees – Although this applies only to three employees as of July 2016, it shows that Georgia’s local governments are not prevented by state law to set their own minimum wages. At least, not yet. Some states, like Tennessee, have prevented such local laws to control costs at such levels.
1. Kentucky Supreme Court Reversed Long-Standing Rule Requiring Employees Alleging Employment Discrimination to Pick Either Administrative Relief or Court Relief – In a recent case against University of Kentucky Chandler Medical Center (CMC), Janet Owen filed a complaint under the Kentucky Civil Rights Act (KCRA) with the Kentucky Human Rights Commission (KHRC) claiming her disability and health issues were the real bases for her termination. KHRC cross-filed the claim with the EEOC. Both charges were investigated and dismissed. Owen failed to pursue either claim. Instead, she filed a lawsuit in state court under the KCRA. CMC moved to dismiss the lawsuit, stating under KSR 344.270 Owen had elected the administrative path by filing with the KHRC; therefore, she could not now file in state court. However, Kentucky’s Supreme Court found that a 1996 amendment to statute KSR 344.270 removed any bar of filing a claim at the administrative level, and then filing again in state court after the result at the administrative level. Knowing the legislature created this two-headed approach, Kentucky’s Supreme Court voiced frustration that two recoveries and two avenues of relief for the same claim may occur, “But we cannot displace the legislature’s judgment for our own.” 2. Court of Appeals: No Liability for Supervisors for Discrimination Alleged Under the Kentucky Civil Rights Act (KCRA) – In 2014, a plaintiff filed a discrimination lawsuit under the KCRA against his employer for failure to reasonably accommodate his medical condition. He also alleged his supervisor violated the KCRA by “aiding and abetting” the employer’s discrimination. In August 2016, Kentucky’s Appeals Court found that the “intra-corporate conspiracy doctrine” prohibits KCRA claims against a supervisor because a corporation acts only through its employees, so they are one and the same, and cannot conspire with themselves. Two major developments here. First, it prevents discrimination claims under KCRA against supervisors. Second, it prevents plaintiffs like this one from filing KCRA claims in state court against another Kentucky resident (the supervisor) just to avoid federal court jurisdiction.
1. The Protecting Freedom of Conscience from Government Discrimination Act (PFCGD) – In April 2016, Mississippi enacted a religious freedom bill, PFCGD, which gives legal protection to companies, individuals and religious organizations who refuse to provide services to LGBT persons. If a religious group makes an employment-related decision that impacts an individual whose conduct or religious beliefs are inconsistent with those of the group, the state cannot take any action against the group. And if anyone establishes “sex-specific standards” for employee or student grooming
or dress, or for access to restrooms, dressing rooms, locker rooms, etc., “. . . based upon or in a manner consistent with a sincerely held religious belief or moral conviction . . . ,” the state cannot take any action. However, federal laws on these issues still apply and any employment decisions based on the above factors must still comply with these laws.
1. Tennessee Lawful Employment Act (TLEA) – By January 1, 2017, all Tennessee employers with 50 or more employees must use the E-Verify system when determining an employee’s eligibility for employment. Also, the time to remedy non-compliance after receiving an initial order of TLEA violations has been reduced to 45 days from 60 days. With TLEA’s current levels of fines ranging from $500 to $2,500 per violation per employee, these changes indicate an increased interest level by the Tennessee Department of Labor, so compliance with this law is paramount. 2. Tennessee Bans the Box for State Government Jobs – In April 2016, Tennessee passed a Ban-the-Box law applicable only to state jobs. It prohibits any state employer from inquiring about an applicant’s criminal history on the initial application. After the initial screening, an inquiry about criminal pasts may be conducted but certain considerations must be made by the employer regarding: the job’s duties; the bearing a criminal history has on the applicant’s ability to do the job; amount of time since the applicant’s conviction or release; applicant’s age when each offense was committed; frequency and seriousness of each offense; applicant’s good conduct and rehabilitation since each offense; and public policy considerations of the benefits of employing people with criminal histories. Exceptions are made for 1) positions requiring criminal background checks under federal law; and 2) positions where committing an offense is a disqualification under federal or state law. 3. Tennessee Grants Immunity for Waiver of Ban on Weapons – In an effort to encourage more waivers of bans against carrying weapons on private property, a new Tennessee law provides that a person/business which has the right to post property as a gun-free zone but does not do so “shall be immune from civil liability with respect to any claim based on such person’s, business’, or other entity’s failure to adopt a policy that prohibits weapons on the property. . . .” That immunity is lost if the permit holder is injured because the person/business acted with “gross negligence or willful or wanton misconduct.” Tennessee Public Chapter 947, amended (2016). 4. Revised Tennessee Data Breach Notice – Effective July 1, 2016, Tennessee became the first state to remove the encryption safe harbor from its data breach notification law: Tennessee Identity Theft Deterrence Act of 1999, TCA § 47-18-2101, et seq. The previous law triggered notice only if there was a breach of unencrypted data acquired by an unauthorized person. The amended law now triggers notice to Tennessee residents if there is a data breach – whether the data is encrypted or unencrypted. Also, businesses must notify Tennessee residents affected by data breaches “immediately, but no later than forty-five (45) days” from the discovery or notification of the breach. Only Tennessee and a few states require notice within a specific time. Finally, the amended law expands the definition of an “unauthorized person” to include an employee who obtained personal information “and intentionally used it for an unlawful purpose.” This could significantly increase the businesses now required to provide notice of a data breach, and all such businesses should update their policies on notice with these new requirements.
Martin F. Thompson, Senior Counsel Fisher Phillips email@example.com www.fisherphillips.com www.HRProfessionalsMagazine.com
3 Reasons Millennial Women Are Still Experiencing Gender Income Inequality
By AHU YILDIRMAZ
espite an immense amount of legislation and publicity around gender income inequality issues, researchers have found that millennial women are still experiencing a pay gap. According to the Milken Institute, over the past seven years, millennial women in jobs that pay over $140,000 have experienced a net wage decrease of one percent, whereas millennial male wages in equally highpaying roles are earning four percent more. Despite the fact that millennial women are more likely than female members of Generation X or baby boomers to hold high-earning positions, their relative compensation simply hasn't increased as consistently as their male peers.
It's now been 53 years since the Equal Pay Act of 1963 was passed. Since then, there's been a series of additional legislation passed to try to close the gender gap. The Lilly Ledbetter Fair Pay Act of 2009, the Equal Opportunity Commission and myriad state laws have all worked to create legislative control around gender and income inequality. But the Institute for Women's Policy Research (IWPR) notes that the current ratio of femaleto-male earnings is still 79 cents on the dollar.
for Economic Co-operation Development (OECD) indicates that while women are still less likely to pursue education in certain STEM fields, women are now out-performing men in educational attainment. More importantly, Milken Institute data also indicates that, even after holding high-paying positions, it's clear that women's wages across all generations aren't growing as quickly as men's. Research by NOW confirms that women are simply earning less. With "similar education and experience," women earn 82 percent of men's salaries 10 years after graduation. Even when tightly controlled by position, the gap remains. Female programmers earn 84 percent of the salary their male peers make. 2. Family Responsibilities Could Have an Impact Analysts are often quick to attribute gaps in family responsibilities to wage disparities. For example, Pew Research highlights that 39 percent of women have taken "significant time" off to care for children, while 42 percent have voluntarily "reduced hours" to care for family. The Joint Economic Commission (JEC) points out that this can decrease women's likelihood of being able to increase experience or qualify for tenure or merit-based pay increases. The concept of a "Mommy penalty," or decreased wage growth among women who choose to have children, is well-documented by the JEC and other research organizations. While just three U.S. states have implemented "state-level paid family leave programs," according to the Center for Progress, additional legislation to support gender-neutral leave for family responsibilities and lifetime earnings could work to protect women against delayed wage growth. 3. Negotiating Skills May Not Trump Perceptions Another common myth in understanding why the wage gap persists is "negotiating ability." Slate reports that a perceived gap in negotiating skills may not be as big a factor as cultural norms. Women are more likely to be perceived as "too demanding" when using similar negotiation tactics as their male peers, and are also more likely to suffer penalties from colleagues for being "unlikable." While the role of women in the workplace has evolved significantly since the 1963 Equal Pay Act, perceptions clearly have not. The Gender Gap Isn't Simple As employers strive to support the idea of "leaning in" for equal pay and opportunities, it's become readily apparent that gender income equality is a complicated issue and therefore will not have be solved with a "quick fix." Despite legislation, publicity and grassroots movements, closing the gap between male and female earnings still has a long way to go. Aiding female employees in earning the final $0.21 per hour that separates them from their male peers will more than likely require not just additional legislation, but a concerted effort by organizations on a national scale to make equality not just a cause, but the standard. To gain deeper insights into workforce dynamics and trends, check out the ADP Workforce Vitality Index. As seen on Spark, powered by ADP (adp.com/spark) Sign up for Spark, powered by ADP, for more insights that can help you ignite the power of your people (adp.com/spark)
So why does this pay gap still exist? Here are three possibilities: 1. The Achievement Gap Is Almost Certainly a Myth According to the Atlantic, researchers have traditionally attributed gender income inequality to a dearth of women in "specific jobs and industries," including STEM fields and managerial roles. However, the Organisation 12
Ahu Yildirmaz Vice President and Head Of ADP Research Institute
HR Professionals Should Do to Prepare for 2017 Background Screening By SEAN DRYDEN
As we merrily trot through the holidays, there are probably 1000 tasks on our plates. As always, hiring the right people continues to be one of the big ones. With the economic climate changes, Boomers retiring, and Millennials flooding the workforce, HR professionals must re-think, revise, and re-new the way they use all hiring tools, especially background screening. The good news is that with a little proactive planning, the new year can be laid out strategically and managed productively.
for a stockroom clerk, but you probably need one if you are hiring a bank teller. A delivery driver’s Motor Vehicle Registry needs to be searched, but a receptionist’s doesn’t. ACTION PLAN: Practice fair hiring and craft your screening process around the aspects of each position.
hoose the right background C screening vendor.
Do you expect a hot dog stand to sell you a select cut of premium steak? NO? Then please don't expect a fly-by-night cheapo background screening provider to return accurate information. Listen, folks, just missing one significant conviction or failing to catch one job falsification can cost your company big in terms of litigation and client loss. And who can even put a price tag on a potentially tarnished reputation and bad press?
Here are 6 things smart HR professionals should do to prepare for 2017 background screening.
ACTION PLAN: Commit to thoroughly screening your job candidates. Order the proper county, state, and database searches, as well as other verifications of employment and education. Review them closely and address any information that may put your workplace at risk.
ractice fairness and relevancy P in screening.
Before you declare "I will order every background check under the sun," hold your horses and think about the position. Failing to organize your background screening policy by position can embroil your company in costly litigation that takes years to work through. Recent EEOC Guidance advises the screening be fair and relevant to the position. For example, you don't need to pull a credit report
ractice PCP (perfect P compliance processes).
Never has compliance been more important than it will be in the 2017 hiring climate. Employment lawsuits are on the rise, with big rewards for the plaintiffs. Smart employers need to put proactive measures in place to cover themselves with documented, compliant processes that will hold up in court. ACTION PLAN: Make certain every single applicant signs an authorization agreement before you check their backgrounds, and stringently follow adverse action procedures if you decide in whole or part not to hire a person. Store the documents in an easy-toaccess system. Vigilantly pursue compliance perfection.
lan to thoroughly screen P your employees.
Slapping an instant database search order through the system and marking an applicant "screened" is, say it with me, Bad! Bad! BAD! Not only is such a search a mere tip of the iceberg of information that could be lurking in a potential hire's background, it doesn't cover your company legally in case the employee is a danger to co-workers or clients. The news is full of companies who thought their background screening process kept risk minimized, when in fact, it missed crucial information about an applicant’s criminal history. Don’t be in the news in this manner!
regarding hiring. Certain states have recently passed laws regarding issues such as "Ban the Box." Take what you learn back to your hiring managers. Make sure they understand the requirements of the state you are based in, as well as any additional states where you conduct hiring. This decreases the chances that ill-planned processes will open you up to negligent hiring lawsuits.
e a devoted advocate for B proper hiring standards.
While you may be the superstar of compliant, thorough, relevant hiring, all hiring managers need to be in the game, too. Just one errant person failing to follow the rules can derail your background screening process.
Action plan: Even if the pricing is a bit more expensive on the front end, do business with a reputable, NAPBS certified background screening vendor that has been in business a long time. Make certain they offer a robust suite of services, not just instant criminal checks. Ask them about the specific procedures they have in place to ensure the information they return is accurate and comprehensive. If you get a blank stare, mark them off your list.
et educated on your G state’s laws.
Regulations are added or changed quite often, and not paying proper attention can leave you out of compliance. “I didn’t know about it” is a paltry defense against a discrimination claim. ACTION PLAN: Devote some time to staying on top of the legislation in your state
ACTION PLAN: Offer consistent, written and verbal education to every employee involved in the hiring process, and reiterate them often. Let it be known there are serious consequences with being lax about these procedures. Answer any questions and address issues immediately to ensure they understand the importance of following the company's best practices to the letter. We all know that finding the right person who has the education, background, and cultural fit to be a productive employee is difficult, and next year will be no different. Hiring is always going to be a challenge. However, by preparing in advance for 2017 with these six actions, you will maximize your company's chances of making the best hiring decisions, and reduce the chance of negligent hiring litigation and disastrous new employee situations.
Sean Dryden National Account Executive firstname.lastname@example.org www.datafacts.com www.HRProfessionalsMagazine.com
CHANGING PERSPECTIVE on Performance Appraisals By JOEL MYERS and BRAD FEDERMAN
umerous Fortune 50 companies have abandoned traditional, accountability-oriented, annual performance appraisal systems. This trend has gained momentum over the past five years. Many early adapters have continued with alternative approaches while others have reinstated some elements of traditional plans.
SOME HISTORY - PERFORMANCE APPRAISAL SYSTEMS Today’s business environment is vastly different from circumstances that existed in the 70’s and 80’s when traditional performance appraisal systems began. The individual accountability approach, as expressed in Jack Welch’s GE model of forced ranking and deletion of the bottom tier, does not fit today’s climate. In this earlier business climate, yesterday’s successes could be replicated to serve as a predictor of future success. Today, things move much more quickly. It is tomorrow’s ideas that drive success. A company can’t afford to perpetuate the status quo. Agility and rapid change are strategic strengths. Talent is more scarce today and must be continually developed to meet changing needs. Therein lies some of the problems with the traditional performance appraisal model and why change is needed. Performance appraisals that focus on past accomplishments (accountabilities) do not sufficiently address attribute development that will be beneficial in the future such as collaboration, creativity, technological savvy, change and teamwork.
Talent is more scarce today and must be continually developed to meet changing needs. 14
WHAT TO FIX Performance appraisals often are driven by how well one executes a given plan over a designated timeframe. It does not evaluate the quality of the plan nor whether the plan is still appropriate as the circumstances change. The timeframe assigned to a plan is typically driven by the calendar. Thus, there is a year-end push to “finish” performance objectives, even when other matters may take higher priority. While we acknowledge the end of a fiscal year as a discrete event, business is a 24-7-365 occurrence. There is nothing sacred about year-end; important decisions are made daily. Performance results are often a matter of circumstance. Someone being in the right place at the right time may position them in an elite circle of high performers. Given rater bias that is present in every performance appraisal system, this elite status for a one-time success or one mistake, may ripple into future evaluations. Traditional performance appraisals are built around individual accountabilities. Yet, we acknowledge that few things in business are accomplished by an individual alone. Everything takes a team of people working toward common goals.
ALTERNATIVE APPROACHES Companies that have abandoned traditional, accountability-based performance appraisals have opted for ongoing feedback models. Here, feedback is continuous, driven by events, employee challenges, and the calendar. For example, at the conclusion of a project or key event, such as the opening of a new branch, or the major software instillation project, a manager meets with the team leader and team members to debrief the experience and critique what went well and where future improvement is needed. An after-action summary is written and preserved for future reference. Managers and employees meet quarterly to discuss performance. The focus of the discussion is 20% on past performance and 80% on the future. To a degree, this structure helps remove the angst that both employees and managers have over annual performance evaluations. The discussion shifts from being critical to being helpful, making it more constructive. Also, some organizations are incorporating 360° feedback from peers and others.
LIFE WITHOUT RATINGS Many organizations that adopt alternative approaches are abandoning performance ratings. Some are not providing a rating at all. Some have shifted to a narrative rating rather than a numerical one. Others use multiple ratings on different elements of the performance evaluation, such as accomplishments, collaboration, communications, personal skills development, and technical skills development. Removing ratings altogether creates some problems with other HRM systems. Awarding merit pay increases requires differentiation based on performance. Without some way of gauging individual performance, it is difficult to decide how to allocate talent development resources. Employees want to know where they stand. When performance difficulties are encountered, it is necessary to record evaluations and performance improvement plans.
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WHAT TO DO It is time to take a hard look at changing the traditional approach to performance evaluation. The new models are a better fit with today’s business environment and the new workforce. Yet, there remain some traditional aspects, e.g. ratings that are important to other management processes. So, proceed, but don’t be too quick to abandon the elements that still play a useful role.
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Wimberly Lawson Attorneys
SaveSave the Date the Date – November - November 2nd 3-5, & 3rd, 2016 2017, at at thethe Knoxville Downtown Marriott Marriott, Knoxville Knoxville
37th Annual LABOR & EMPLOYMENT LAW UPDATE CONFERENCE In Knoxville, Tennessee, on November 3 - 4, 2016
1 Ron Daves, Managing Member, welcomed attendees to the Conference. 2 Fredrick R. Baker was the emcee for the Conference. Fred is the editor of The Tennessee Workers’ Compensation Handbook, published by M. Lee Smith Publishers. 3 Jeffrey G. Jones, Regional Managing Member of the Cookeville office, was the “man behind the mic,” at the Conference announcing general session speakers. 4 James W. Wimberly, Jr., a founding principal of the Wimberly Lawson network, presented “The Year in Review.”
5 T. Joseph Lynch, III discussed “Legislative Updates on Workers’ Comp Reform.” 6 Carol R. Merchant spoke on an “Insider’s Look at Wage and Hour Developments.” 7 Fredrick J. Bissinger’s topic was “EEOC Initiatives, Including Retaliation Under the Proposed New Guidance.” Fred is Regional Managing Member of the Nashville office. 8 Inky Johnson, Keynote Speaker, is a former University of Tennessee football player and author of “Inky – An Amazing Story of Faith and Perseverance.” 16
Wimberly Lawson Attorneys
9 M. Lee Daniels, Jr. presented “Trends & Issues on the NLRB and Union Organizing.” 10 J. Larry Stine’s topic was “OSHA Update.” 11 Susan S. Davis discussed, “Mandatory E-Verify Coming to Tennessee in 2017.” 12 “Things That Go Bump in the Night and Other Things to Worry About in the Coming Year,” was William R. Seale’s topic. 13 Edward H. Trent presented “Heightened Scrutiny for Religious Accommodations.”
14 Kelly A. Campbell, Regional Managing Member of the Morristown Office, spoke on “Legal & Practical Issues for Pre-Employment Testing.” 15 Howard B. Jackson spoke on “Beyond FMLA Leave – The Wide, Wide World of Mandatory Paid Leave.” 16 J. Eric Harrison, Karen G. Crutchfield, and Jeffrey M. Cranford led a breakout session on “Cyber Security – Liability for Cyber Crimes and Data Breaches.”
17 G. Gerard Jabaley, Regional Manager Member of the Knoxville office, and Catherine E. Shuck presented “Where Does Your Lawyer Fit In?” 18 Mary Dee Allen spoke on “Is Management Training Necessary?” 19 “Cyber Security, Including Cyber Bullying & Ransomware” was Mary Moffatt Helms’ topic. 20 Ann E. Sartwell spoke on compensation.
Does our emotional intelligence influence how much money we make?
By HARVEY DEUTSCHENDORF
“Emotional intelligence is a way of recognizing, understanding, and choosing how we think, feel, and act. It shapes our interactions with others and our understanding of ourselves. It defines how and what we learn; it allows us to set priorities; it determines the majority of our daily actions. Research suggests it is responsible for as much as 80 percent of the "success" in our lives.” ~ J. Freedman ~ A great deal of research has shown a strong relationship between our levels of emotional intelligence and how successful we will be in our lives, not only in the workplace but in all areas. But, is there any direct relationship between emotional intelligence and how much money we make? Some research has shown that there is a relationship between the two. A study, published in November of 2014, looks at how the ability to recognize emotions (ERA) is associated with annual income. They used a sample of 142 employees---peer---supervisor triads taken from a very broad range of jobs and organizations. They found that there was a direct relationship between people’s ability to recognize the emotions of others and how much money they earned per year. People’s emotional abilities allowed them to better process affectladen information in a way that helped them to navigate the social world of organizations and use this in a way that led them to become more prosperous. Another study involved researchers from the University of Bonn in Germany. Volunteers were asked to identify the various emotions shown to them through a series of images and voice recordings and asked to try and determine their level of emotional intelligence. As more organizations recognized the importance of teamwork and collaboration, the researchers set out to see if any concrete results could be determined in terms of people’s emotional intelligence levels. Before organizations committed to using resources to determine emotional intelligence of new hires or develop their existing workforce, they were interested in discovering if increased emotional intelligence would result in increased performance results. The results of all of the volunteer’s ability to recognize emotions were tracked and the researchers looked deeper into the background of the participants. As well as asking for information about them from their coworkers, they also looked at some basic criteria, such as levels of income. It was discovered that those who had the ability to recognize emotions received higher incomes. They were also rated to be more socially skilled and were more likely to earn increasing salaries than those with lower scores. The researchers believed that this difference had to do with the ability to recognize moods and behaviours that in turn lead to more effective working relationships with coworkers as well as bosses. It is not much of a stretch to see that developing good working relationships with one’s coworkers and bosses leads to increased opportunities for promotion and increased earnings. One of the largest studies on the relationship between emotional intelligence and income was carried out by Dr. Travis Bradberry and Nick Tasler, M.S. Using the Emotional Intelligence Appraisal, they tested the emotional intelligence (EQ) of over 42,000 people. One benchmark that was compared in the study was the EQ scores to annual incomes. When mapped out on a graph. the results showed that regardless of the level of EQ, when the scores increased, so did the income levels. Overall the survey found that people with high EQ’s made on the average of $29,000 more than people with low EQ’s. It was discovered that on the average, every point increase in emotional intelligence resulted in an annual increase in salary of $1300. The authors of the study believed that the reason for this was that people with higher EQ delivered more 18
value to their companies. They were able to do their job more effectively, make better decisions and work more effectively in numerous other areas which lead to increased productivity for the organization and in turn increased their income. Many people in organizations are already aware that there is a benefit to developing EQ skills. There is a growing recognition that having self-awareness and an ability to tune into others emotional cues are important aspects of building strong teams and building loyal relationships with customers. Yet for people like Dr. Bradberry, who has been working in the field for many years, he has noted there is still a hesitancy, or unwillingness to making the development of EQ skills a priority. This reluctance to priorize EQ and put resources towards developing it has been found in talking to their trainers and customers. Many organizations profess that they believe in the value of emotional intelligence and see the benefits; yet they still have it in the back of their minds that it is a luxury and something that should be looked into once the more serious work is completed. What they are looking for is an answer to the proverbial question: What’s in it for me? Dr. Bradberry hopes that the results of his research will answer that question.
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.
Breaking Down the Cornucopia of U. S. Immigration Laws November 17, 2016 at The Crescent Club in Memphis
Fisher Phillips Memphis Partner David Jones presented on various aspects of U.S. immigration and how they relate to employers. The discussion included terms and concepts, the agencies involved, the most common visa types, the permanent residence process, and all related compliance and employment law aspects.
DATE AND TIME 11.17.16 8:00 AM- 1:00
LOCATION The Cresent Club 6075 Poplar Avenue #909 Memphis, TN 39119
To register, please visit https://www.fisherphillips.com/newsroom-events-memphis-immigrationlaws. David Jones, Fisher Phillips Memphis Partner, (L-R) Jeff Weintraub, Regional Managing Partner of Attendees enjoyed the presentation on presented on various aspects of U. S. immigration and Fisher Phillips Memphis Office, David Jones, and U. S. immigration laws. how they relate to employers.
Join Fisher Phillips Memphis Partner David Jones as he presents on various aspects of U.S. immigration and how they relate to employers. The discussion will include terms and concepts, the agencies involved, the most common visa types, the permanent residence process, and all related compliance and employment law aspects. Attendees should come away with the basic knowledge needed to facilitate communication with foreign national employees and ensure they are taking the right steps in their immigration programs.
Lead and Develop a Better Workforce in Jones represents clients in complex matters relating to both immigration benefits and enforcement Your Organization and in proceedings before the Department of Homeland Security, the Department of Labor, the
Department of Justice and the Department of State, as well as in matters related to citizenship status discrimination and export control compliance under the Export Administration Regulations (EAR) M.S. in Human Resources & Organization Development and International Traffic in Arms Regulations (ITAR). Transfer up to 6 graduate credits from a regionally accredited institution
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Paid Sick Leave for Federal Contractors
By RUSSELL JACKSON
On September 30, 2016, the U.S. Department of Labor (DOL) published the Final Rule for Establishing Paid Sick Leave for Federal Contractors. The Rule implements Executive Order 13706, signed by President Obama on September 7, 2015. The Order requires companies who contract with the federal government to provide their employees with up to seven days (or 56 hours) of annual paid sick leave, including time to spend with family members. The effective date for the Final Rule is January 1, 2017, which means it will apply to any covered contracts that have been issued or any contract that has been awarded after that date. The Final Rule applies to any contract with the federal government that falls within any of these four categories: 1. Procurement contracts for construction and contracts subject to the Davis-Bacon Act. This includes contracts for the construction, alteration or repair (including painting and decorating) of public buildings and public works of the federal government. 2. Procurement contracts for services covered by the Service Contract Act. This includes any contract that has its principal purpose of furnishing services through service employees. 3. Contracts for concessions. This would include any federal contracts for furnishing food, lodging, automobile fuel, souvenirs, newspaper stands and recreational equipment to the public (e.g., souvenir shops at national monuments, boat rental facilities at national parks). 4. Contracts in connection with federal property or lands and related to offering services. This includes contracts entered into in connection with federal property, such as leases of space in a federal building wherein the contractor operates a child care center, credit union, gift shop, etc. The rule also applies to subcontractors if the subcontract falls within one of the four specifically enumerated types of contracts discussed above. The requirement applies to employees performing work on or in connection with covered contracts. Employees performing “on” a covered contract are employees who are directly performing the specific services called for under the contract. The rule requires that contractors permit employees to accrue one hour of paid sick leave for every 30 hours worked on or in connection with a covered contract. A contractor must aggregate an employee’s hours worked on or in connection with all covered contracts for that contractor. For example, if a subcontractor sends employees to three separate covered projects, all the time the employee spends would be added together to determine how much sick time the employee has accrued. An employee is permitted to use paid sick time in four scenarios: 1. the employee’s own physical or mental illness, injury or medical condition; 2. the employee is obtaining diagnosis, care or preventative care from a health care provider; 3. the employee is caring for a child, parent, spouse, domestic partner or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any condition or is receiving any care (as described in paragraphs 1 and 2, above); or 4. the absence is related to domestic violence, sexual assault or stalking, or to assist an individual related to the employee (as described in paragraph 3) related to domestic violence, sexual assault or stalking. The DOL estimates the rule will affect more than 1.1 million people once it is fully in effect. Although many contractors already provide paid leave for their employees, the rule has been criticized by some who argue compliance with it will be costly for smaller businesses who struggle with labor costs, it is an added record-keeping and administrative responsibility, and if a company currently provides more generous benefits, the business may decrease its paid leave policy to comply with the minimum requirement. Any federal contractors who anticipate entering into covered contracts should become familiar with the Final Rule to ensure compliance. 20
FAIR PAY AND SAFE WORKPLACES On August 25, 2016, the DOL issued final rules and guidance implementing the Fair Pay and Safe Workplaces Executive Order, which also affects the federal contracting business community. The stated purpose is to improve federal contractor compliance with labor laws. The rule would require any contractor bidding on a contract that is estimated to exceed $500,000 to report whether any determination of violation of a labor law had been rendered against the contractor in the previous three years. Contractors are required to direct prospective subcontractors to also submit the required information to the DOL. Under the rule, federal contractors and subcontractors are required to report any violations of the numerous federal labor laws and to update their disclosures every six months while performing the government contracts. The required disclosures would include non-final administrative merits determinations, including any complaint issued by the General Counsel of the National Labor Relations Board, non-final determinations by the DOL’s Wage and Hour Division concerning alleged violations of the Fair Labor Standards Act, DavisBacon Act, Service Contract Act, and the Family and Medical Leave Act, non-final determinations by the Occupational Safety and Health Administration and determination letters that reasonable cause exists issued by the Equal Employment Opportunity Commission. The rule would also prohibit contractors and subcontractors who enter into contracts for non-commercial items over $1 million from entering into arbitration agreements with employees or independent contractors regarding matters arising under Title VII. The rule additionally requires contractors to inform their employees in each paycheck of the number of hours worked, overtime calculations, rates of pay, gross pay, additions or deductions from pay, and whether they have been classified as independent contractors. The rule’s effective date was October 25, 2016. However, on October 24, 2016, the U.S. District Court for the Eastern District of Texas enjoined the rule. In the ruling, Judge Marcia Crone found the requirement to report labor law violations was unconstitutional and enjoined the rule’s ban on arbitration agreements. Judge Crone issued a nationwide preliminary injunction. Affected contractors should be aware that an appeal is likely and should plan for potential compliance. The Court did not enjoin the rule’s paycheck transparency provision, which will take effect January 1, 2017.
Russell Jackson, Counsel FordHarrison Memphis Office firstname.lastname@example.org www.fordharrison.com
You’re invited to attend the
Human Resources & Employment Law Fall Conference Presented by: THE WEST TENNESSEE SOCIETY FOR HUMAN RESOURCE MANAGEMENT In coordination with: THE LAW FIRM OF RAINEY, KIZER, REVIERE & BELL, P.L.C. Join us for an informative day where you will explore crucial HR compliance topics including: Amy West, President of WTSHRM, welcomes attendees.
November 2, 2016 8 a.m. to 3:30 p.m.
Union University Carl Grant Event Center 1050 Union University Dr. Jackson, TN 38305
Dr. John Carbonell, Past President of WTSHRM.
FLSA Check-Up on Salary Basis Revisions – A review to make sure are you ready for the new revisions to the Fair Labor Standards Act that are effective December 1. Case Studies - An interactive discussion of recent employment law cases and the application of relevant concepts and HR strategies. Employment Law Update – A survey of recent changes to federal and state employment laws. Breakout Sessions: OSHA Revisions and Wellness Plans - These sessions will include a study of these timely topics.
2016 WTSHRM Board of Directors includes Jennifer Howell, VP Membership; Amy West, President; Dr. John Carbonell, Past President; Donna Dickinson, Treasurer; Rita Alexander, Communications Coordinator; Rhonda Livingston; Lunch Chair. is provided. Take advantage Community Outreach Coordinator; Anna Higgs, Certification Not pictured is Secretary Jane Mansfield. of
(R-L) James V. Thompson and Matthew R. Courtner presented “Rough Seas Ahead: FLSA Check-up on Salary Basis.”
our impressive showcase of HRrelated exhibitors. Door prizes and more. Registration Fee: $75 for WTSHRM Members $100 for non-WTSHRM Members
Join WTSHRM for only $25 at: wtshrm.shrm.org/join
The registration deadline is Thursday, October 27, 2016.
(L-R) James V. Thompson and Robert O. Binkley led a (L-R) Matthew R. Courtner and Michael L. Mansfield Registerdiscussed early“Wellness as seating is You limited. breakout session, “All Hands on Deck! OSHA Revisions.” Plans – See on the Lido Deck” during a breakout session.
V. Latosha Dexter, Deputy University Counsel at University of Memphis, joined John D. Burleson and presented “Ports of Call: HR Case Studies.”
You may pay by check or credit card. Questions: email@example.com
This program has been submitted to provide up to 5.5 recertification credit hours through HRCI and SHRM.
“Afternoon Watch: Employment Law Update” was the topic of (L-R) Gregory D. Jordan and Dale Conder, Jr.
Rainey Kizer attorneys (L-R) Matthew Courtner, John Burleson, Latosha Dexter with the University of Memphis, Michael Mansfield, James Thompson, Dale Conder Jr., Robert O. Binkley, and Gregory Jordan. www.HRProfessionalsMagazine.com
Will Market-Based-Only Salary Structures Survive Regulatory Reviews and Scrutiny? By BRUCE and BLAIR JOHANSON
Back in October 2012, WorldatWork and Deloitte Consulting LLP released and publicized a study on “Salary Structures Policies and Practices” based on 910 respondents out of 5,398 WorldatWork members who were invited to participate in this focused study.
Some of the key findings from this study follow: Market-based salary structures are more popular than traditional and broadband structures. • Traditional salary structure range spreads are increasing. • Larger organizations utilize wider ranges as opposed to narrower ranges for smaller organizations. • Market-based ranges are used more by Consulting, Professional, Scientific and Technical business sector organizations. • A majority of the survey respondents benchmark with the 50th percentile (median) of the market.
• A large percentage of the surveyed organizations adjust salary ranges on an annual basis. • Spreadsheet software applications (e.g., Microsoft Excel) are the most popular tool for salary structure design, administration, record and communication followed by Point Solutions (e.g., tools specifically focused on salary structure management) and then followed by enterprise systems. • Traditional salary structures have a percentage range spread from the mid 30’s to the low 50’s. • Market based salary structures have a percentage range spread from the upper 40’s to the upper 60’s.
WorldatWork and Deloitte Consulting LLP Study
OFCCP Definition and Discussion on Multiple Regression Analysis as stated on the DOL-OFCCP website.
Based on the WorldatWork and Deloitte Consulting LLP study, “Most of the survey respondents are putting a majority of their eggs in one basket.” Market based only salary structures tend to be mono-factor focused and heavily dependent on external market pay medians and means. Historically, aggregated market pay study data points tend to fluctuate annually due to variations in participating organizations and their respective employee pay data points.
Multiple regression analysis is a statistical tool for understanding the relationship between two or more variables…. The multiple regression model must include those factors that are important to how the contractor in practice makes pay decisions. Such factors could include the employees' education, work experience with previous employers, seniority in the job, time in a particular salary grade, performance ratings, and other factors.
A significant amount of market pay data is required to validate and neutralize the high and low outliers and market pay fluctuations. Market based only salary structures range spreads have a wider range spread to compensate for putting all the organization’s eggs in a mono-factor and heavily dependent market pay analysis basket. This popular approach based on the WorldatWork and Deloitte Consulting, LLP study runs counter to outside regulatory systemic compensation discrimination multi-factor regression analysis. The OFCCP uses statistical techniques inclusive of multiple regressions based on job content, skills, qualifications and responsibility levels. In addition, the OFCCP will evaluate legitimate factors that influence compensation inclusive of education, prior work experience, performance, productivity and time in job. The OFCCP has continued its efforts to promote and enforce pay equity and transparency by issuing a final rule as follows.
“OFCCP generally will attempt to build the regression model in such a way that controls for the factors that the investigation reveals are important to the employer's pay decisions, but also allows the agency to assess how the employers' pay decisions affect most employees. One factor that must be controlled in the regression model is categories or groupings of jobs that are similarly situated based on the analysis of job similarity noted above (i.e., similarity in the content of the work employees perform, and similarity in the skills, qualifications, and responsibility levels of the positions the employees occupy, and additional factors as discussed above). This will ensure that the analysis compares the treatment of employees who are in fact similarly situated.”
Systematic Pay Discrimination Given the regulatory trends toward identification and restitution of systemic pay practices, it would be prudent for organizations that utilize market based only salary structures to place a few eggs over in the internal job evaluation (point-factor solution) salary structure management process. The combination of an internal traditional multi-compensable factor and a market based salary validate structure should stand the scrutiny of outside regulatory multiple regression analysis, depending on if the management rabbits are progressively addressing systemic pay discrimination as opposed to blissfully hopping-down the bunny trail.
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Realizing the Future of Big Data in Employee Benefits PART 2 By ALEX GRAMLING
The following article is Part 2 of a two part series on the future of Big Data as it relates to employee benefits. Part 1 was published in the November 2016 edition of HR Professionals Magazine.
With competitors already utilizing analytics in the near term, strategic advantage will be afforded to those who embrace emerging Big Data techniques early. The following list sets forth a series of prerequisites that should be implemented as employers look for chances to incorporate Big Data into their employee benefits: 1) Capture key performance numbers and assess the baseline results before any interventional solutions are explored. Knowing current and historical key metrics will illuminate areas of weakness which may be corrected through personalization or recommendation. 2) Measure participation for every program and assess ways that improved communication or decision support may drive enhanced engagement.
In Part 1 of this two part series, employers were introduced to the mechanics of Big Data and its overall implications to the world of both HR and employee benefits. Four key avenues for Big Data impact within employee benefits were explored: (1) Personalized recommendation engines, (2) Chronic condition management, (3) Improved benefits decision making, and (4) Targeted employee communications.
3) Create a data-driven decision culture where actionable insights, whether gleaned through empirical or predictive methods, are championed and considered.
Part 2 of this series will address valid concerns that HR professionals should evaluate when pursuing Big Data solutions. In addition, a review of possible prerequisite activities has been constructed, which may assist employers as they look for opportunities to leverage developing Big Data services.
4) Set performance targets for every program and use reviews to understand the underlying drivers of success or failure.
What are some of the drawbacks of Big Data?
As a final thought, consider the results of a Harvard Business Review survey which found that 71% of CEOs surveyed believe that human capital is the main factor in creating sustainable economic value. Given this significance, it’s no wonder that HR professionals are feeling the expectation to deliver, retain and engage the best talent. Luckily, Big Data is poised to be a transformative force in the HR world. Connecting activities such as performance reviews, hiring success, retention factors, engagement levels, benefit appreciation, resource development, and employee satisfaction to traditional business and value metrics can ultimately validate the activities of the entire HR department.
The most obvious detraction from Big Data is the looming specter of “Big Brother.” Collecting, housing and analyzing hundreds or thousands of personally-identifiable data points will certainly require extreme diligence to assure employee privacy is safeguarded. These concerns must be weighed and overcome before employers try to tackle the major issues of disclosure and sharing. Big Data is built upon connecting information to other data sources to create a complete view of a particular person or event. Without the ability to share and make connections between these disparate sources, the promise of Big Data may not be fully recognized. If there is apprehension related to simply collecting and housing the data, what kind of anxiety is brought about by personalized communications or recommendations tailored to employees through employment related data, benefit utilization, fitness trackers, or even their own social media postings? At what point do employers know too much about their employees? While privacy remains at the forefront of any discussion, other critics have pointed to the fact that simply analyzing large sets of data for correlation is not a theoretically valid method for generating conclusions. A quick search of “Google Flu Trends” will illustrate one of the early failures of Big Data. Despite promising early results from Google’s influenza tracking service, the program was ultimately scrapped following intervals with consistently poor predictions, including spans such the 2012-2013 flu season when it predicted twice as many cases as actually recorded. As with the analyses provided by traditional business intelligence, there will always be a human element of judgment necessary to objectively review the findings of these new analytical methods. Big Data solutions which are common-sense, privacy-first will ensure that the benefits gained through new insights won’t be offset through negative reactions or poor strategy vectors based on false positives.
How can employers prepare for Big Data’s entrance into employee benefits? Analytics in HR is not a new idea. In fact, a study by Oxford Economics found that only 7% of respondents do not use business analytics within HR. However, 84% of these organizations say that greater analytical adoption will drive their operation in the next three years. 24
Given the relative infancy of Big Data in the employee benefit world, nearly every HR shop in the country is on equal footing. As with any emerging technology, those who plan, execute and realize the proper Big Data strategies will have a decided advantage over their peers. It appears to be only a matter of time before those that understand Big Data’s importance see their ranks swell with talented and productive resources while their competition languishes within the structured box of traditional business intelligence.
Alex Gramling Financial Analyst Regions Insurance Group Alex.Gramling@Regions.com
Do employee benefit laws remind you of alphabet soup? Regions Insurance is here to provide meaningful solutions that best support your organization’s goals. Our employee benefit advisors and law-trained professionals can help develop the right plan of action and break down all the confusing laws and regulatory acronyms so you’re not left staring at a bowl of alphabet soup.
Tom Hayes Employee Benefits Practice Leader email@example.com 479-684-5259 www.regionsinsurance.com
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DECIPHERING FUZZY LANGUAGE UNDER THE ADA: What Does It Mean to be “Job-Related and Consistent with Business Necessity” By STUART JACKSON
As most of you know, any type of medical question an employer poses to an employee is highly regulated by the Americans with Disabilities Act (ADA). Under the statute, medical inquiries or examinations are permissible only at specific times and for specific reasons, one of which is when a medical inquiry or examination is “job-related and consistent with business necessity.” That phrase has always been a bit fuzzy to me, but recently the Eighth Circuit Court of Appeals shed some light on just what it means. THE FACTS OF THE CASE: TRUCK DRIVERS AND SLEEP STUDIES In Parker v. Crete Carrier Corporation, the Court tackled an interesting fact scenario. Parker was an over-the-road trucker hired by Crete in 2006. In 2010, Crete started a sleep apnea program based on recommendations from two advisory committees to the U.S. Department of Transportation’s (DOT) Federal Motor Carrier Safety Administration. Those committees recommended that any driver with a Body Mass Index (BMI) greater than 35 a) receive only a conditional DOT certification to drive and b) undergo an examination for obstructive sleep apnea, preferably in an in-lab sleep study at a sleep center. One of the advisory committees changed its recommendation in 2016 – it recommended sleep studies for any driver who 1) had a BMI of 40 or above or 2) had a BMI of 33 or above and some additional risk factors. The underlying reason for the recommendations was simple – sleep apnea can cause daytime sleepiness, making drivers more likely to have accidents. Crete’s sleep apnea program required an in-lab sleep study if 1) the driver’s BMI was 35 or above or 2) the driver’s doctor recommended a sleep study. Even though Parker’s BMI was over 35, he tried to avoid an in-lab sleep study based on a certified physician assistant’s note stating “I do not feel it is medically necessary for [Parker] to have a sleep study.” Parker subsequently refused to do a sleep study, and Crete took Parker out of service. Parker sued Crete, alleging it required a medical examination violating the ADA and alleging it “regarded” him as having a disability. The district court disagreed with Parker and granted Crete’s motion for summary judgment. Parker appealed. On appeal, the Eighth Circuit talked about what “job-related and consistent with business necessity” meant: When an employer requires a medical exam of its employees, the employer has the burden of showing that the exam is job-related and that “the asserted ‘business necessity’ is vital to the business and the request for a medical examination or inquiry is no broader or more intrusive than necessary.” “Courts will readily find a business necessity if an employer can demonstrate . . . a medical examination or inquiry is necessary to determine . . . whether the employee can perform job-related duties when the employer can identify legitimate, non-discriminatory reasons to doubt the employee’s capacity to perform his or her duties.” “The examination or inquiry need not be the only way to achieve a business necessity, but it must be a reasonably effective method to achieve the employer’s goals.” Three things you should note from this: first, it is always the employer’s burden to show that a medical exam or inquiry is job-related and consistent with business necessity; second, an employer must have solid reasons to doubt the employee’s ability to perform his or her duties; and third, the medical exam or inquiry must be narrowly-tailored to the issue at hand. 26
THE EIGHTH CIRCUIT’S RULING: THE SLEEP STUDY WAS “JOB-RELATED AND CONSISTENT WITH BUSINESS NECESSITY” In upholding the district court’s decision in favor of Crete, the Eighth Circuit noted that the ADA permits an employer such as Crete to require a class of employees to get medical exams as long as it can show that the class “poses a genuine safety risk and the exam requirement allows the employer to decrease the risk effectively.” The class in this case – those over-the-road drivers with a BMI of 35 or above – was legitimate because Crete established the following, in part through the use of expert testimony:
➊ Untreated obstructive sleep apnea tends to impair driving skills, increasing the risk of accidents;
➋ A sleep study is the only way to confirm or rule out obstructive sleep apnea, and an in-lab sleep study is the “gold standard” for diagnosing obstructive sleep apnea; ➌ Obesity is the primary anatomic risk factor for obstructive sleep apnea; ➍ A BMI of 33 is the “optimal cut-off” to identify subjects likely to have obstructive sleep apnea since over 75% of people with obstructive sleep apnea have a BMI of over 33; and ➎ Obstructive sleep apnea can be treated, which decreases the risk of accidents. Based on these facts, the Eighth Circuit held Crete’s sleep study requirement was job-related because “it deals with a condition that impairs drivers’ abilities to operate their vehicles” and was consistent with business necessity because “[a]n examination is necessary to determine whether an individual has obstructive sleep apnea, a condition that poses a public safety hazard by increasing the risk of motor vehicle incidents.” Additionally, Crete had a solid reason to suspect that Parker had sleep apnea, based on his BMI, and the sleep study required by Crete was “no broader or more intrusive than necessary because an examination is needed to diagnose obstructive sleep apnea and an in-lab sleep study is the best way to diagnose it.” It further held that Crete did not “regard” Parker as disabled since the sleep study requirement was legitimate and lawful. By refusing to participate in a lawful medical exam, Parker handed Crete a legitimate, non-discriminatory reason to suspend him. KEY POINTS FOR HR PROFESSIONALS What are the takeaways from this? First, before you make any type of medical inquiry, be ready to explain why you doubt an employee’s ability to perform his or her job duties and be ready to produce specific examples of what is driving your doubt. Second, make sure your doubts pass the “smell test” – run the issues (and any relevant job description) by other HR professionals or counsel to ensure your concerns are reasonable and objective. Third, when seeking medical information from or about an employee, narrowly tailor your questions or the inquiry to the specific situation at hand, and do not forget to include the “safe harbor” language found under the Genetic Information Nondiscrimination Act in any written request for information. Don’t meet your obligations under the ADA, only to forget about your obligations under GINA. Finally, if an employee refuses to provide medical information in response to a lawful inquiry, you may have reason to take action against the employee.
William Stuart Jackson, Partner Labor & Employment Team Leader Wright Lindsey Jennings firstname.lastname@example.org www.WLJ.com
May all your wishes come true this holiday season.
Seasonâ€™s Greetings from
LITTLE ROCK | NORTHWEST ARKANSAS | CGWG.COM |
HR Professionals Beware of Potential Violations of Antitrust Laws
By M. KIMBERLY HODGES
ompanies have long been aware of the need to vigilantly guard against antitrust violations with sales and marketing employees. However, recent guidance from the United States Department of Justice (DOJ) and Federal Trade Commission (FTC) drives home the point that antitrust compliance is not just an issue when it comes to the goods and services companies sell, but also with the labor they employ. On October 20, 2106, the DOJ’s Antitrust Division and the FTC issued its “Antitrust Guidance for Human Resource Professionals” outlining how agreements with competing employers related to wages and other terms of employment can result in antitrust violations. The guidance was intended to educate HR professionals about how the antitrust laws apply to the employment context and to provide a clear warning that both agencies are taking direct aim at agreements which depress competition in the labor force. According to the DOJ, open competition to recruit and retain employees is essential to the job market. That competition is impeded when companies that would otherwise compete with one another to recruit or retain the same employees enter into certain types of agreements. The agencies take a serious view of the issue, comparing certain agreements among employers to hardcore cartel conduct. One of the biggest revelations from the guidance was the DOJ’s declaration of its intent to actively pursue criminal investigations into agreements restraining competition going forward. Up to this point, the bulk of the DOJ’s enforcement activity in this area has been limited to civil actions. According to the Antitrust Division’s Acting Assistant Attorney General Renata Hesse, “Antitrust violations in the employment arena can greatly 28
harm employees and impact earnings over the course of their entire careers. HR professionals need to understand that these violations can lead to severe consequences, including criminal prosecution.” It is not just the company at risk, though. As the DOJ outlined in its recent “Yates Memo” on individual accountability, it may also bring a criminal action against individuals who engage in unlawful activity. That means HR professionals who fail to educate themselves on how to avoid activity that violates antitrust laws may do so at their own peril and at the risk of their own imprisonment. Even those agreements that don’t rise to the level of a criminal violation may still result in civil liability if, for example, an employee or another private party was injured by an illegal agreement. Damages in such a case could be as high as three times the damages the party actually suffered.
What Types of Agreements Run Afoul of Antitrust Laws? The main types of agreements prohibited by antitrust laws are “wagefixing” and “no-poaching” agreements. Wage-fixing is an agreement between competing companies to set employee salaries or other terms of compensation at a particular range or level. Despite the moniker, however, wage-fixing agreements are not limited to agreements concerning actual wages. The DOJ offers the example of competing companies agreeing to stop offering paid gym memberships or subsidies for parking or meals. Because these are all considered job benefits, agreements among employers to eliminate them plainly violate antitrust laws.
A “no-poaching” agreement is one in which companies agree to not solicit or to refuse to hire each other’s employees. Over the past few years, the DOJ brought three separate civil enforcement actions against technology companies, eBay and Intuit, Lucasfilm and Pixar, and Adobe, Apple, Google, Intel, and Pixar, each charging that the employers entered into agreements not to cold call each other’s employees. In two of the cases, at least one company also agreed to limit its hiring of employees who currently worked at a competitor. All three of the DOJ’s actions resulted in consent judgments against the technology companies. Both wage-fixing and no-poaching agreements are per se violations of antitrust laws and carry serious consequences. According to the guidance, these types of agreements are just as dangerous to free competition as agreements among companies to fix prices. Avoiding entering into obvious illegal agreements might not seem that difficult. It is critical to understand, though, that they aren’t always formal written documents. An agreement may be oral and may be implied merely from evidence of discussions or from evidence of companies taking suspiciously similar actions with regard to compensation or terms of employment. The guidance warns that simply attending a trade association meeting where such agreements are discussed is enough to raise a red flag. It is also worth noting that in the employment context, the guidance does not limit a “competitor” to other companies within the same industry. A company can be considered a competitor in this context if it simply competes for the same type of employees.
What About Activities Other than Naked Wage-Fixing or No-Poaching Agreement? Express or oral wage-fixing and no-poaching agreements are plainly illegal. However, the guidance takes a deeper dive into other forms of potentially illegal behavior, including sharing sensitive compensation information between employers, as evidence of an implicit agreement not to compete. For example, the DOJ pursued an action against an association of Human Resource professionals for conspiring to exchange non-public prospective and current compensation information about nurses, which caused hospitals to match each other’s wages and had the effect of artificially depressing nurses’ compensation. The DOJ and FTC’s guidance also implicates employee non-solicitation covenants that clients frequently enter into as part of a legitimate business relationship, such as services agreements or non-disclosure agreements signed to conduct due diligence during mergers and acquisitions. Companies must be very careful in constructing these agreements to make sure that they do not go too far. So long as the non-solicitation covenants are reasonably tailored in scope and duration, they should not raise significant antitrust risks. For example, a non-solicitation agreement entered into by companies as part of conducting due diligence should end as soon as possible after a potential acquirer declines to merge or acquires the target company. Likewise, a non-solicitation covenant agreed upon as part of a services agreement should be limited only to the types of employees directly involved in the services provided under the agreement and should terminate as soon as possible after the termination of the agreement. During an IT consulting project, for example, the companies may agree to not poach only those employees working on that project. The guidance has a direct impact on common HR functions like benchmarking and compensation surveys, so HR professionals should take it seriously. The DOJ does not explicitly prohibit these activities, but does proscribe certain boundaries for how HR professionals should go about them without crossing the line. As restrictive as the regulations may seem, it is possible to exchange information in a way that conforms with antitrust laws if the exchange is carefully designed to prevent harm to competition. An information exchange may be lawful if: • A neutral third party manages the exchange, • The exchange involves information that is relatively old, • The information is aggregated to protect the identity of the underlying source, and • Enough sources are aggregated to prevent competitors from linking particular data to an individual source.
What Can HR Professionals Do to Limit the Risk of Antitrust Violations? What should companies do now? First, the guidance from the DOJ and FTC included an informative Q&A on how antitrust violations may arise in the HR profession and a Quick Reference Guide with a list of “Antitrust Red Flags for Employment Practices.” Some of the most noteworthy red flags include: • Exchanges of competitively sensitive information with individuals at other companies, • Participation in meetings or informal gatherings with competitors where employment decisions are discussed, and • Merely receiving information about another company’s compensation information. The scenarios listed on the Quick Reference Guide are not exhaustive, and the presence of a red flag does not necessarily imply an antitrust violation. However, if you are an HR professional, or anyone with decision-making input into hiring and compensation issues, you should, at a minimum, read and familiarize yourself with these tools and proceed with caution if you are confronted with any of the scenarios. Second, companies should take this issue very seriously and incorporate the lessons from the DOJ and FTC’s guidance into their antitrust compliance training programs. Companies are accustomed to training their sales and marketing staff on antitrust laws when it comes to issues like price-fixing and non-competition agreements. Now, however, HR employees will need to become more educated on potential violations to make sure that their interactions with, for example, HR colleagues at another company do not result in an inference of illegal activity. Third, review other types of agreements, such as service agreements or non-disclosure agreements carefully to ensure they do not contain covenants which could potentially be considered a violation of the antitrust laws. When in doubt, consider having an experienced attorney review your agreements. Taking the extra effort on the front end may go far to protect both your company and yourself from criminal and civil liability.
Kimberly Hodges, Shareholder Ogletree Deakins - Memphis Kim.Hodges@OgletreeDeakins.com www.OgletreeDeakins.com www.HRProfessionalsMagazine.com
63% of Americans Favor Some Type of Universal Healthcare The Affordable Care Act of 2010 was created with the intention of getting more Americans affordable health insurance, primarily through Medicaid expansion and the establishment of Health Insurance Marketplaces. While not a perfect health reform, the ACA has been successful in reducing the number of uninsured Americans by almost 20 million Americans. While not always front page news, 80% of Americans believe having a system that ensures sick people get the care they need is a moral issue, and that 63% of us favor some type of Universal Healthcare System (Health Day/Harris Poll).
Does Anyone Have a Crystal Ball?
What is going to happen to healthcare in America? By KERSTIN NEMEC and TIM NORWOOD
ealth insurance premiums through HealthCare.gov are reported to rise almost 23 percent in 2017. Individuals seeking coverage through the Marketplace are not alone, as employer provided plans are also experiencing increased costs of 6.5 percent. Per the Large Employer’s
2017 Health Plan Design Survey, the primary cause driving these cost increases is the surge in spending on pharmaceuticals and specialty drugs, followed by high cost claimants and specific diseases and conditions.
So, what is on the horizon for healthcare and managing costs? There are many individual strategies that employers can utilize yet the looming question remains that impacts both
2017 Will Be a Transitional Year for Everyone As you can see, it is complicated and hard to predict what’s next for health reform and what it means for employers and employees. We do know for certain there will be change and if the past is any indicator of the future, it will take longer than anyone would like. We also believe that some type of system that ensures access for those who need it most will be part of the picture. It will be critical for employers and employees to stay close to the changes. Employers will need to do so in order to craft benefit plans that make the most sense for their employees, control costs and fit the culture of their company. Employees will need to do so as coverage through their employer may not always be the best option for their personal circumstances. Either way, we see 2017 as a transitional year of evaluation and education for all parties, with a fresh look at more marketplace freedom.
businesses and individuals alike. How do we provide affordable access to medical coverage to all Americans without costs skyrocketing? Affordable Healthcare Under the Trump Administration
During the recent election, there was discussion by both candidates regarding affordable
President Med-Enroll, Inc.
healthcare. Under the new Trump administration many reforms are under discussion, especially those surrounding the Affordable Care Act of 2010. Changes under discussion include repealing penalties and mandates, allowing the sale of health insurance across states lines to expand competition and reduce costs, allowing individual health premium deductions on tax returns and HSA’s, and many other reforms to lower healthcare costs that burden all Americans. 30
Tim Norwood Executive Vice President Med-Enroll, Inc.
H E A LT H C A R E Summit H E A LT H C A R E MSBGH and MC School of Business present the 7th Annual
THE BUSINESS OF HEALTHCARE COST • MANAGEMENT • PLANNING
OCTOBER 25, 2016 THE BUSINESS OF HEALTHCARE TUESDAY, OCTOBER 25, 2016
C O S T • M A 8:00 N A GAM E M- 3:00 E N TPM • PLANNING
TUESDAY, OCTOBER 25, 2016 Mississippi College 8:00 AM - 3:00 PM
200 S. Capitol Street 1 Dr. Marcelo Eduardo, Dean of the MC School of Business, welcomed attendees to the Summit. 2 Randy Vogenberg, PhD, RPh, spoke on “Benefit Design MSBGH and MC School ofofBusiness theCare 7th Annual Clinton, Mississippi in the Post ACA Environment.” 3 Panel discussion on “A Physician’s Perspective Populationpresent Health and Delivery.” (L-R) John Fitzpatrick, M.D., President, Hattiesburg Clinic; Greg Olden, M.D., Chief Medical Officer, Merit Health; J. Clay Hays, Jr., M.D., FACC, Interventional Cardiologist, Jackson Heart Clinic; Moderator Marshall Bouldin, M.D., Vice-Chairman & Chief Medical Officer, Southern Health Network; Executive Vice President & Chief Medical Officer, Diabetes Care Group.
H E A LT H C A R E College ~ ~ Mississippi 200 S. Capitol Street
Mississippi The Mississippi Healthcare SummitClinton, brings together national healthcare experts and key state leaders in government and business to address the most pressing topics businesses face in managing healthcare programs and costs. Summit participants will hear directly from our state’s policy makers, medical and corporate professionals on the leading edge THE leaders BUSINESS OF HEALTHCARE 4 5 sweeping through our state’s healthcare system. The Mississippichanges Healthcare national CSummit O S T • brings M A N together AGEMEN T • P Lhealthcare A N N I N G experts and key 4 Panel discussion on “An Employer’s Perspective of Employee Health & Well-Being.” (L-R) Maury Hull, Vice President of Human Resources, Hol-Mac Corpostate leaders in government and business to address the most pressing topics businesses ration; Curnis Upkins, Vice President of Human Resources & Workforce Services, Mississippi Hospital Association; Katherine Murray, Benefits Manager, Sanderson Farms; Deidrehealthcare Bell, CPA, FHMA,programs Executive Vice President and CFO, St. Dominic Health Services, Inc. 5 Panel on “A Health face inModerator managing and costs. Summit participants will heardiscussion directly from Care Executive’s Perspective on Population Health and Payment.” (L-R) Henry Sullivant, M.D., Chief Medical Officer, Select Health Alliance; Jon-Paul Croom, TUESDAY, OCTOBER 25, 2016 Chief Executive Officer, Merit Health;makers, Aaron Sisk, medical Plan President & CEO, Magnolia Health Plan; Moderator Murray Harber, Director, Mississippi our state’s policy leaders and corporate professionals onExecutive the leading edge AVAILABLE 8:00 AM - 3:00 PM Business Group on Health.DIFFERENT SPONSORSHIP LEVELS changes our state’s healthcare system. Please contact us at:sweeping 601.925.3214through or email@example.com
Mississippi College ~ ~ www.business.mc.edu/health-care-summit | 601.925.3214 200 S. Capitol Street DIFFERENT SPONSORSHIP LEVELS AVAILABLE Clinton, Mississippi Please contact us at: 601.925.3214 or firstname.lastname@example.org 6
7 8 9 The Mississippi Healthcare Summit brings together national healthcare experts and key 6 Congressman Gregg Harper (R-MS) was the keynote speaker.and Harper is serving his fourththe term in the U.S. House of Representatives. 7 Cristie state leaders luncheon in government business to address most pressing topics businesses Upshaw Travis, Chief Executive Officer, Memphis Business Group on Health spoke onand “Understanding Health Care Quality 8 John Damon, face in managing healthcare programs costs. Summit participants willRating hear Systems.” directly from MD, Chief Executive Officer, Mississippi Children’s Home Services, presented “Mental Health – Its Costs to Employers and Our State.” 9 (L-R) Cynthia our state’s policy makers, medical leadersBusiness and corporate professionals the leading edge Thompson with HR Professionals Magazine, Cristie Upshaw Travis with the Memphis Group on Health, and on Murray Harber with the Mississippi sweeping through our state’s healthcare system. Business Group on Health, and Scott Shuford with Merck, atchanges the dinner prior to the Summit.
www.business.mc.edu/health-care-summit | 601.925.3214
10 Approximately 200 people attended the Summit.
DIFFERENT SPONSORSHIP LEVELS AVAILABLE
Please contact us at: 601.925.3214 or email@example.com 10 MSBGH and MC School of Business present the 7th Annual
www.business.mc.edu/health-care-summit | 601.925.3214
H E A LT H C A R E
POST-ELECTION UPDATE: What Should Employers Expect from the
Trump Administration? By ALEX BOALS and BRENDA CANALE
The 2016 Presidential election was one of the most contentious and polarizing races in recent memory, with each candidate endorsing starkly different visions for the role of government in a host of different areas, including the workplace. With Donald Trump succeeding at the ballot box and the Republicans maintaining control of both houses of Congress, employers can expect that the Trump administration will work aggressively to roll back President Obama’s workplace policies developed over the past eight years. Although it is impossible to predict the coming changes with absolute certainty, we can examine the workplace policy agenda that President-elect Trump promised to pursue during his campaign.
Judicial Appointments President-elect Trump has made it clear that filling Justice Scalia’s vacancy on the U.S. Supreme Court will be a top priority of his administration. He has promised to choose a jurist “based on constitutional principles, with input from respected conservative leaders” and has issued a list of potential nominees, all of whom have wellestablished conservative track records. Accordingly, if a Trump nominee is confirmed, the Court should maintain the conservative tilt established several years before Justice Scalia’s death. Although the composition of the Supreme Court will have significant long-term ramifications, there are several labor and employment cases pending before the Court that may be affected more immediately. The case with the broadest significance for employers, Ernst & Young v. Morris, involves the enforceability of class action waivers contained in mandatory arbitration provisions under the Federal Arbitration Act (FAA) and the National Labor Relations Act (NLRA). The U.S. Courts of Appeal for the Ninth and Seventh Circuits have held that such waivers violate the NLRA and are unenforceable, while the Fifth, Eighth, and Second Circuits upheld them as lawful. The last 20 years have seen a sharp rise in class and collective action claims in the employment context, which plaintiff’s attorneys have used to leverage lucrative settlements from employers looking to avoid the time and expense of class-wide discovery and motion practice. In light of this trend, employers have increasingly used class action waivers to limit litigation to single-plaintiff claims. A Supreme Court with a conservative majority may be more likely to affirm the use of class action waivers, which would represent a welcome victory for employers. 32
Immigration Law President-elect Trump made illegal immigration one of the focal points of his campaign. In light of his hard line on this issue, including his suggestion to create a special deportation task force within the Department of Homeland Security’s Immigration and Customs Enforcement (ICE), employers can expect a renewed emphasis on enforcement of employment verification documentation. In a recent speech, Trump said he intended to “ensure that E-verify is used to the fullest extent possible under existing law” and was committed to “work with Congress to strengthen and expand its use across the country.” Although federal law and most states do not require enrollment in E-verify, employers who have not registered for the E-Verify system may want to consider doing so, to reduce the likelihood of attracting unwanted attention from ICE. Employers should also ensure that employees who are legal immigrants timely renew their visas.
Benefits Law Another cornerstone of President-elect Trump’s campaign was the repeal of the Affordable Care Act (ACA), commonly referred to as “Obamacare.” With majorities in both the House and Senate, repeal of the ACA may be within the Trump administration’s grasp. Even if Republicans are unable to formally repeal the ACA, they may be able to essentially gut the program by denying funding. Either way, Trump has suggested that he will alter or supplant the ACA with a health-care initiative that will emphasize the use of Health Savings Accounts and increase competition by allowing insurance companies to sell plans across state lines. The precise contours of “Trumpcare” are unclear at present, but are likely to represent significant changes that Human Resources and their benefits and payroll partners should be sure to track.
Paid leave constituted another central issue in the recent election. Although both candidates endorsed the notion of paid leave, Trump advocated for six weeks of maternity leave, which is less than the leave offered by his Democratic opponent. The details of Trump’s plan have not been fully fleshed out, so it is unclear whether paid leave would be offered to fathers or adoptive parents. Even if the Republican Congress balks at providing paid leave, employers should be aware that they may have to provide such leave under state or municipal law.
The Trump administration also may clash with the EEOC on LGBT rights. In recent years, the EEOC has taken the position that Title VII’s prohibition of discrimination based on “sex” extends to discrimination on the basis of sexual orientation or gender identity. The GOP has consistently rejected this approach, noting that there is no federal law codifying this interpretation of Title VII and that Congress has declined to pass the Employment Non-Discrimination Act, which would have expressly extended protection to sexual orientation and gender identity.
The election of President-elect Trump promises to represent a sea-change in the government’s approach to labor and employment issues. With Senate Democrats still capable of mounting a filibuster, however, Trump may not necessarily realize the full scope of changes he would like to implement. Nonetheless, significant changes are nearly certain to occur on a host of issues. Although many of these changes promise to be employer-friendly, it will be critical for Human Resources professionals to keep abreast of the situation and guide their organizations through any necessary workplace adjustments.
It is anticipated that the new administration will pursue a dramatic shift in labor policy, as well. While employers must continue to follow existing law, the business community can anticipate a more employer-friendly National Labor Relations Board (NLRB), or at least one less inclined to stretch Section 7 coverage to unworkable limits. Last year, the NLRB implemented the oft-termed “quickie election” rule which, among other things, shortens the time period between a union’s filing of a representation petition and the holding of an election. The rule is widely perceived as a pro-union measure because it makes it more difficult for employers to run a campaign and oppose union representation within the shortened time frame provided by the rule. Although employers have challenged the rule in court, it has survived attack to date. It is expected, however, that the rule will be much more vulnerable to attack under the Trump administration.
R. Alex Boals, Associate Littler Memphis Office firstname.lastname@example.org www.littler.com
Brenda N. Canale, Associate In addition to the “quickie election” rule, both the NLRB and Department of Labor (DOL) have handed down a multitude of expansive rules and decisions impacting labor law. Employers have pushed back in a number of areas, resulting in on-going litigation. Notable areas include the issue of whether class action waivers in arbitration agreements violate the National Labor Relations Act (NLRA), as discussed above; the standard for determining whether two or more employers are joint-employers of a single workforce; and, finally, the DOL’s “persuader rule” requiring employers to file public reports with the DOL when they use consultants, including lawyers, to provide labor relations advice and services that have the purpose of persuading employees regarding union organizing or collective bargaining. These issues currently are pending in various federal courts across the country. Finally, the current NLRB continues to articulate new positions in an effort to further expand employee rights under the NLRA – including nonunion workplaces. Although any changes necessarily will require time and resources, President-elect Trump now has an opportunity to reshape the NLRB and may significantly stem this expansion of Section 7 coverage.
EEO Law During President Obama’s administration, the EEOC advanced an ambitious agenda on several fronts that President-elect Trump likely will try to roll back. The Trump administration may first address the EEOC’s revised EEO-1 reporting requirements, which are set to take effect with the 2017 EEO-1 reports due on March 1, 2018. The new reporting requirements obligate employers to provide pay information in an effort to promote pay equity. The EEO-1 requirements have been roundly criticized by employers as expensive, burdensome, and poorly structured. Republican lawmakers already have introduced legislation to prevent implementation of the new requirements, which would likely be signed into law if it were to reach President-elect Trump’s desk.
Littler Memphis Office email@example.com www.littler.com
GO CONFIDENTLY. Bass, Berry & Sims listens and responds with creative yet practical counsel. We stay on pace with the complex and rapidly evolving employment landscape, connecting your dynamic human resources needs to proactive strategies. Relationships, reliability, and respect – at the center of our Labor & Employment and Employee Benefits practices.
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Treading the Muddy Waters of the ADAAA By TANNERA GIBSON
The Americans with Disabilities Act Amendments Act (“ADAAA”) has been making waves since its enactment in September, 2008. The ADAAA was enacted with the intent to broaden protections afforded by the ADA in previous years, and to overrule the narrow approach utilized by courts. These changes, however, muddied the compliance waters. The ADAAA brought about a significant number of changes to the definitions of disability, substantial limitation, and major life activities. There is also an expansion of the “regarded as” prong of the ADA, which now permits recovery regardless of the disability’s limitation on life activities.
What’s a Disability under the ADAAA? The amended definition of a disability requires an individual to show 1) the existence of a physical or mental impairment that substantially limits one or more major life activities, or 2) a record of a physical or mental impairment that substantially limited a major life activity, or 3) that a covered entity took a prohibited action based of an actual or perceived impairment (“regarded as). Short-term impairments may also be classified as disabilities, if sufficiently severe. In this case, leave should be considered as an accommodation. This is a sharp departure from the pre-amendment ADA, which had been construed to exact a demanding standard for those seeking to qualify as disabled. Prior to the ADAAA, the substantial limitation prong was nearly impossible to meet for those who were somewhat limited in in their activities.
The New Substantially Limited Requirement and Mitigation Measures The ADAAA mandates that the substantial limitation prong be construed to apply a less demanding standard in order to cover a broader range of people. To this effect, the ADAAA eliminated the consideration of mitigating measures in determining whether an individual was substantially limited in a major life activity. With the exception of contact lenses and glasses, mitigating measures are no longer to be considered. Moreover, an employer may not require an employee to utilize mitigating measures. The amendment relating to mitigating measures was a direct response to cases such as Sutton v. United Air Lines, which held that the plaintiffs did not have a disability because mitigating measures corrected their impairment.
Major Life Activities? In the same vein as the expansion of the definition of a disability and substantial limitations, the ADAAA also expanded covered major life activities to include a non-exhaustive list of activities such as learning. The major life activity of working is also included; however, substantial limitation in this activity will be determined based on difficulty performing either a class of jobs rather than a type of work. The expansion also included bodily functions, which broadened the previous construction of the term to include only activities of central importance to most people’s daily lives. The law goes further to clarify that an impairment is not required to limit more than one major life activity to be considered a disability, and also clarifies that conditions which are episodic or in remission are considered disabilities if the impairment would substantially limit a major life activity when it is active. 34
Prior to the enactment of the ADAAA, an employee making a “regarded as” claim had to prove that her employer believed that the perceived disability substantially limited a major life activity. The ADAAA, however, only requires that an employee prove that said employer treated her as though she had an impairment, regardless of the employer’s perception of a substantial limitation.
What say the courts? With the multitude of changes brought about with the enactment of the ADAAA, employers have struggled with uncertain circumstances while employee claims have sharply increased since 2009. The courts have addressed several unclear circumstances, thereby serving as a beacon of light to guide employers through the muddy waters.
Is it a Disability under the ADAAA? The 4th Circuit, reversing the lower court in Jacobs v. N.C. Administrative Office of the Courts, 780 F.3d 562, held that a deputy clerk who suffered panic attacks while working at the front counter, could be substantially limited in interacting with others. While the employer asserted that the plaintiff could not be so limited because she routinely answered questions and socialized with coworkers outside of work, the court held that a person need not live as a hermit to be substantially limited in interacting with others. The plaintiff’s ability to cope with the anxiety could not be held against her, as it was effectively a mitigating measure. Further, working at the front desk was not an essential job function, as there were over 20 other clerks who were able but not required to perform that function. Jacobs teaches that instead of making assumptions relating to an employee’s circumstances, especially where the impairment is not apparent, an employer should request medical documentation certifying a substantial limitation. Further, an employer should not deny an accommodation when there are a sufficient number of non-disabled employees available to complete tasks that would otherwise have been completed by the disabled employee.
Can this Person do the Job? Regarded As? In Cannon v. Jacobs, Field Svcs. N. Am., 813 F.3d 586, the 5th circuit held that refusing to hire an engineer on the basis that a rotator-cuff impairment prevented him from lifting over his head, could be viewed by a jury as the result of regarding the engineer as impaired. Plaintiff’s impairment limited the major life activity of lifting, and as such, he was disabled under the ADAAA. Because the ADAAA only requires that an employee/potential employee be regarded as physically impaired, as opposed to being regarded as substantially limited in a major life activity, evidence that he was denied employment because of his impairment, was sufficient to meet his burden. The ADAAA’s shift from requiring that a person be regarded as substantially limited in a major life activity, to requiring that a person simply be regarded as impaired places a greater onus upon employers to exercise due diligence before taking any action affecting employment. An impaired person must be given an opportunity to demonstrate fitness for the position at issue.
Is it really a Disability? In Carothers v. County of Cook, 808 F.3d 1140, the 7th Circuit held that a hearing officer at a juvenile detention center who had an altercation with an inmate, and subsequently developed an anxiety condition that prevented her from interacting with juvenile detainees was not disabled under the ADAAA. The court reasoned that the impairment did not prevent her from performing either a class of jobs or a broad range of jobs; rather, the condition only prevented her from performing a unique aspect of a single specific job related to her work as a hearing officer. Carters is distinguishable from Jacobs, above, because the Jacobs plaintiff was substantially limited in interacting with others, affecting her ability to perform a class of jobs requiring interpersonal interaction. The Carters plaintiff was only limited in interacting with detainees, a duty related solely to her particular job as a hearing officer. This distinction is critical in determining whether a person’s impairment is a disability under the ADAAA. If said person’s impairment does not limit her ability to perform a task or tasks across the board, regardless of position, that impairment will not meet the ADAAA definition of disability. In Weaving, v. City of Hillsboro, the 9th Circuit held that a sergeant with the police department was properly terminated based on interpersonal problems he experienced while interacting with peers and subordinates. Plaintiff’s claim that his ADHD substantially limited his ability to work and interact with others failed because he was able to engage in normal social interactions, and his interpersonal difficulties existed almost exclusively in his relationships with peers and subordinates. The court distinguished between an inability to get along with others and interacting with others generally, and noted that the ADAAA does not protect a cantankerous person who has mere trouble getting along with coworkers. An employer is not required to tolerate bad behavior of an employee who seeks to hide behind the ADAAA. The ADAAA does not protect employees who have difficult personalities, even where the employee is impaired, if there is not a substantial limitation on a major life activity and does not affect the employee’s ability to perform a class of jobs.
or refusing to accommodate. Courts have held that where medical records were insufficient to support an employee’s substantial limitation claim, the employee was not disabled under the ADAAA In Gogos v. AMS Mechanical Systems, Inc., a welder was terminated when he asked to leave work because his blood pressure spiked and caused vision problems. The court held that blood pressure is a condition of the type that is episodic and can be a disability if it’s substantially limiting when active. Plaintiff could not be required to medicate, and further, his substantial limitation must have been determined without reference to mitigating measures, such as medications.
Conclusion The cases above illustrate the difficulties that employers have faced in determining whether an employee or potential employee should be afforded an accommodation pursuant to the ADAAA, and the importance of not taking action based on a perceived or actual impairment. However, an employer exercising due diligence with persons who are impaired so as to avoid a regarded as claim, and an employer seeking medical documentation to confirm impairments and limitations that are not apparent, will be less likely to run afoul of the ADAAA. Avoid snap decisions, and avoid taking action(s) without obtaining a full picture of the employee/potential employee’s particular circumstances and an employer will find the ADAAA easier to comply with.
Tannera Gibson, Attorney Burch Porter & Johnson firstname.lastname@example.org www.bpjlaw.com
SISKIND SUSSER PC
What if the Disability is Short-Term? Leave as an accommodation? It is best to err on the side of leave as an accommodation to avoid a situation where an employer is forced to argue that leave was an undue burden. Leave under the ADAAA is an entitlement that attaches upon employment, distinct from the FMLA, which requires 1 year of service before attaching. If an employer does not have sufficient employees to cover the impaired employee while on leave, the length of the requested leave may be considered. The ADAAA’s requirement that short term impairments can be disabilities if sufficiently severe, and that leave should be granted as an accommodation, is illustrated by the 4th Circuit’s decision in, Summers v. Altarum Instute, Corp., 740 F.3d 325. There, a government contractor was terminated while on short term disability to recover from surgery related to a leg injury. The contractor required 7 months of recovery time to permit him to regain his ability to walk correctly. The court held that the ADAAA is clear that short term impairments can be disabilities if they are sufficiently severe, as there is not a temporal element in the actual disability prongs of the ADAAA. Further, temporary disabilities only require temporary accommodations, so it would be difficult for an employer to argue undue burden, as any burden would be limited to the duration of the temporary affliction. Leave should have been granted as an accommodation.
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Episodic Conditions It is critically important for an employer to avoid writing off an impaired employee because a substantial limitation isn’t always present when a condition is episodic. Seek medical documentation before taking any action, www.HRProfessionalsMagazine.com
Guidance on Pre-Population of I-9 Forms and New Decision on St. Croix Personnel Services, Inc. By BRUCE E. BUCHANAN
USCIS AND PRE-POPULATION In the most recent E-Verify Connection, Number 33, released in November 2016, the United States Citizenship and Immigration Services (USCIS) has re-visited the issue of the “pre-population” or “auto-population” of employee data into section 1 of an electronic I-9 form and offered clear guidance. What is “pre-population” or “auto-population” of employee data? It is when portions of the I-9 form have already been filled out by a computer program before the employee or employer has started to complete the I-9 form. The E-Verify Connection raised the following question: can Section 1 be auto-populated in the case of an electronically prepared Form I-9? The USCIS answered “Form I-9, Section 1, cannot be auto-populated by an electronic system that collects information during the on-boarding process for a new hire.” However, it also stated the following fields can be auto-populated in Section 2: Employer’s Business or Organization Name, Employer’s Business or Organization Address (Street Number and Name), City or Town, State, and Zip Code. USCIS’s Positions on Pre-Population USCIS first addressed the issue in August 2012 and stated they were “not opposed to autofilling Section 1 of Form I-9 by a company’s human resources system, provided the employee and employer review and complete the attestation. Additionally, if Section 1 of Form I-9 is being completed on behalf of the employee, then the Preparer-Translator section must be completed.” However, six months later, USCIS said that employers should not electronically pre-populate section 1, even if the employee could review the information before signing. Then, later, the USCIS stated it was not taking a position on the issue. ICE’s Positions on Pre-Population Immigration and Customs Enforcement (ICE) originally stated section 1 pre-population in an electronic I-9 form was permissible if the employer also completed the preparer and/or translator section. In early 2013, ICE changed its position to that it was never permissible regardless of whether the preparer and/or translator section was used and regardless of whether the employee inputted the information that is pre-populated into the system. But in October 2013, ICE stated it had no specific position on the issue and advised employers to simply follow the “regulations.” However, the regulations currently do not address the specific issue of pre-population in section 1. Additionally, ICE stated it would evaluate the matter on a case by case basis. Why is the Issue of Pre-Population Important? In a Notice of Inspection, ICE analyzes an employer’s I-9 forms. If it deems the pre-population of section 1 to be a substantive violation, the employer is subject to a penalty. If all the employer’s I-9 forms were pre-populated, then that would be subject to a penalty of about $2000 (under new increased penalties) per I-9 form in error. 36
Office of Chief Administrative Hearing Officer (OCAHO) has recently issued several decisions, including U.S. v. St. Croix Personnel Services, Inc., 12 OCAHO no. 1289 (October 2016). In SCPS, OCAHO found in favor of the employer on eight of the 17 alleged violations, thereby reducing the penalty sought from $16,690 to $5,450. After being served with a Notice of Inspection, SCPS provided 16 Form I-9s to Immigration and Customs Enforcement (ICE). ICE issued a Complaint alleging the 16 form I-9s were in violation of the Immigration Reform and Control Act for failure to timely complete sections 1 or 2 of the I-9 form plus failure to provide an I-9 form for one employee. ICE sought a baseline penalty of $935 per violation based upon an error rate of over 50%. In its Answer, SCPS admitted to nine violations – the one failure to prepare an I-9 form and eight of the 16 other violations. However, it argued the other eight violations were timeliness violations beyond the five-year statute of limitations. Allegations Time-Barred? The evidence established SCPS failed to ensure the employees completed section 1 on their first day of employment and failed to complete section 2 within three business days of their hire dates. OCAHO carefully reviewed the eight employees’ dates of hire and the dates that the I-9 forms were competed. The complaint was filed on July 30, 2015; thus, any timeliness claims which occurred before July 30, 2010 were time-barred. OCAHO found the eight employees in question were hired between April 2, 1999 and October 1, 2007 and section 2 should have been completed within three days thereafter; thus, all eight allegations were time-barred as they occurred before July 30, 2010. Statutory Factors in Assessing Penalty Concerning the five statutory factors in assessing a penalty, small business, seriousness of violation, good faith/bad faith, employment of unauthorized workers, and history of violations, OCAHO found the violations were serious and a 5% aggravation was appropriate. However, it found SCPS was a small business, which should receive a 5% mitigation based upon this factor. The other three factors were treated as neutral. Conclusion In conclusion, OCAHO found SCPS deserved leniency due to consideration of the public policy of leniency to small businesses. As such, OCAHO assessed a $650 penalty for the failure to prepare one Form I-9 and $600 per violation for the other eight violations for a total of $5,450.
Bruce E. Buchanan, Attorney Siskind Susser PC email@example.com www.visalaw.com
NORTHEAST MISSISSIPPI HUMAN RESOURCES ASSOCIATION
Managing and Communicating Regulatory Change A Workshop for Supervisors, Managers, and HR Professionals OCTOBER 11, 2016 BANCORPSOUTH ARENA IN TUPELO
1 Northeast Mississippi Human Resource Association Board of Directors (Row 1, L-R) Leslie Barry, JD, Government Affairs Director; Charlotte Pratt, SHRM-SCP, President Elect; Kim Hardin, PHR, Secretary (Row 2, L-R) Scott Richardson, SHRM-SCP, SPHR, Past President; Scott Williams, SHRM-SCP, SPHR, President; Stacy Crowley, PHR, Diversity Director. 2 Scott Williams, SHRM-SCP, SPHR, 2016 NEMSHRA President, welcomed attendees to the Workshop. 3 Leslie Barry, JD, Government Affairs Director, introduced Taylor B. Smith. 4 Taylor B. Smith, attorney with The Kullman Firm, presented “FLSA Regulations Affecting Large and Small Businesses, Including the New White Collar Exemption Rule.” 5 Cynthia Y. Thompson, MBA, SHRM-SCP, SPHR, Editor | Publisher of HR Professionals Magazine, discussed the “2016 Election and 2017 Legislation Impacting HR.” 6 Scott Richardson, SHRM-SCP, SPHR, Past President of NEMSHRA. 7 Mandy Stanley’s topic was “Communicating Change – How to increase Your Effectiveness in Making Presentations to Facilitate Managing Change.” 8 Charlotte Pratt, MBA, SHRM-SCP, SPHR, President –Elect of NEMSHRA. 9 Attendees enjoyed the presentations at the NEMSHRA Workshop for Supervisors, Managers and HR Professionals.
s i R
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light of recent political events, health care, and the cost of health care, is on the forefront of everyone’s mind. With 2017 quickly approaching, and a new President taking office in January, predictions as to health care costs are running rampant. However, one of the leading drivers of health care costs is the rising costs of prescription drugs. This trend has been a topic of conversation long before the most recent Presidential election. As we move into 2017, the cost of prescription drugs will continue to increase at a sharp clip in certain categories. From 2004-2014, according to the Peterson-Kaiser Health System Tracker, the annual growth rate for per-person retail prescription drugs for those individuals participating in large employer group health plans, was relatively low, falling between zero percent (0%) and five percent (5%) growth for each year. However, in 2014, this same annual growth rate climbed to fourteen percent (14%). Specialty drugs, such as those for chronic, rare conditions – like multiple sclerosis, hepatitis C, and cancers, are the driving force behind this sharp increase. According to David Dross of Mercer’s Managed Pharmacy practice group, since 2011, this segment of prescription drug spending has nearly doubled, to more than $150 billion in 2015. In 2014, specialty drugs increase by almost thirty-one percent (31%). In 2015, specialty drugs increased again at just over twelve percent (12%).
In 2014, specialty drugs increase by almost
thirty-one percent (31%). In 2015, specialty drugs
increased again at just over twelve percent (12%). 38
By JENNIFER S. KIESEWETTER
According to Segal’s 2017 Health Plan Costs Trend Survey, for 2017, these specialty drugs are projected to grow to 18.7% of all drug costs, which is on top of the 18.9% prediction for 2016. Interestingly, only one percent (1%) of all medications prescribed are specialty prescription drugs; however, Segal notes that these drugs account for thirty-five percent (35%) of the trend for prescription drug growth. Specialty drugs have accounted for seventy-three percent (73%) of all prescription drug spending growth. Specialty drugs are not the only prescriptions that are vulnerable to price increase. The overall cost of prescription drugs for active employees and retirees under the age of sixty-five (65) is projected to increase to 11.6% in 2017. This is in addition to the 11.3% increase these drugs experienced in 2016. According to the Centers for Disease Control and Prevention, as evidenced from 2009-2012, almost forty-nine percent (49%) of people have used at least one (1) prescription in the past thirty (30) days. Almost twenty-two percent (22%) of people have used three (3) or more prescriptions in the last thirty (30) days, and almost eleven percent (11%) of people have used five (5) or more prescriptions during the same time period. In fact, during doctor office visits alone, health care providers have ordered $2.3 billion in prescription drugs, with approximately seventy-three percent (73%) of visits calling for a prescription. As such, the rising costs of prescription drugs have a direct impact on a large percentage of the population, especially since wages are projected to rise by only 2.5% in the coming year. A new Kaiser Family Foundation study found that overall, annual out-of-pocket prescription spending has decreased from $167 in 2009 to $144 in 2014. Most of this decline was due to prescribing generic drugs. Additionally, the Affordable Care Act’s requirement for contraceptive coverage without cost-sharing contributed to this decrease in out-of-pocket spending. For example, the percentage of women with out-of-pocket expenses for birth control fell from twentytwo percent (22%) in 2012 to almost four percent (4%) in 2014.
â€Śthe percentage of women with out-of-pocket expenses for birth control fell from twenty-two percent (22%) in 2012
to almost four percent (4%) in 2014. Notwithstanding the above, the percentage of people spending more than $1,000 a year out-of-pocket on prescription drugs increased from one percent (1%) to almost three percent (3%) in 2014. Although this is a small number of employees, this spending accounted for
Because of these growing trends, employers offering group health coverage are implementing strategies in plan design to help curb costs. For example, certain strategies include requiring prior authorization before certain prescriptions are filled; requiring that lower-cost drugs be tried by the participant first before more expensive drugs are prescribed; and increasing cost-sharing mechanisms, such as co-payments. As prescription drug costs continue to increase, employers will need to find the balance between offering satisfactory prescription coverage for employees with cost-saving measures. As new drugs continue to be invented, especially in the specialty drugs arena, combined with an aging population, the focus on the provision and the cost of prescription drugs must be monitored. Prescription coverage will be just as instrumental in plan design for employers as deductibles and co-payments.
approximately thirty-three percent (33%) of all out-of-pocket spending in large employer-provided health plans in 2014. The high costs of prescription drugs not only affect health plan participants, but also affect employers offering health care coverage. For example, average retail drug spending spiked in 2014, which was a thirteen percent (13%) increase after slow growth for the previous nine (9) years. Employer-provided health plans absorbed much of this increase as health plans spent an average of $909 per year per person on prescription drugs, up from $584 in 2004.
Jennifer S. Kiesewetter, Esq. Kiesewetter Law Firm, PLLC firstname.lastname@example.org www.kiesewetterfirm.com
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COLLABORATIVE COMPREHENSIVE CLIENT DRIVEN Real world solutions to your employee benefits needs. kiesewetter law firm www.kiesewetterfirm.com 901.818.3067 Follow us @KieseERISA
From Profession to Patient: How healthcare workers are the new epidemic in workplace injury By CHRISTINE FERRIS and MEGAN CONNELL
Once the domain of the construction, mining and manufacturing sectors, low back and musculoskeletal injury among healthcare workers has become a rapidly growing concern. In the health industry, low back injuries are due in large part to repeated manual handling activities, often involving heavy manual lifting associated with transferring and repositioning patients, and working in extremely awkward postures. The prevalence of injured nurses has been described as an epidemic in the US, where nursing employees suffer more than 35,000 injuries each year, which are so severe that they require time off work. Nurses are turning into patients themselves, with the profession listed alongside laborers and freight handlers as having the highest number of musculoskeletal disorder cases in 2014. Injury prevention in the healthcare industry is not a new concept – hospitals and nursing schools have long acknowledged the risks involved with patient handling and care, and have developed best practice techniques to minimize harm to workers. However, recent university and government studies have shown that the traditional “bend your knees and keep your back straight” lifting technique is no longer the standard of care. So what next?
A Multifaceted Approach: marrying technology and training New methods of working are constantly being tested and introduced into healthcare organizations, using innovative technology and training methods to reduce the risk of workplace injury. Connect Healthcare Collaboration works alongside companies to help find the best solutions to be proactive in preventing these injuries rather than being forced into a reactive, and costly, situation. Partnerships with innovators such as dorsaVi allow companies to protect their employees in groundbreaking ways. dorsaVi undertook a project with Monash Health to provide an objective, quantitative overview of the current demands on its nursing staff. 40
Kim Flanagan, Head of Workplace Health, Safety and Security says:
“Safety in the workplace is paramount. Without a safe environment for staff, they can’t provide the best care for patients, which is our top priority.” In reviewing our claims performance manual handling injuries were shown to result in the greatest number of claims. In an effort to tackle the ever increasing numbers, we needed to look outside the traditional methods of hazard management. Patient handling is a unique area that can be greatly improved by increased knowledge, innovative design and the use of mechanical aids, and that’s why we engaged the use of dorsaVi’s wearable technology, ViSafe.” The wearable ViSafe sensors were used to provide in-depth data on employee’s lower back movements, shoulder elevations and muscle activity during daily tasks to establish a baseline of the workforce. At the time of the study, manual handling injuries accounted for 58% of all employee injuries at Monash Health, with back and shoulder injuries making up the vast majority of cases. In the initial ViSafe baseline assessment, 10 workers were assessed for back and shoulder postural risk factors in three key areas: Operating Theatre, Intensive Care Unit (ICU) and Hospital Ward South West 4 (SW4). After validating certain priority areas and higher risk activities, for example direct patient care and operating the hoist, dorsaVi could commence intervention planning. Through an in-depth analysis of the baseline data, the dorsaVi assessment team worked with Monash Health to design potential solutions to reduce the frequency and duration of high risk muscle movements. These new intervention options were then tested, again using wearable sensors to determine their impact on high risk movement. A specific assessment methodology was developed for each task, according to a targeted plan. Following this testing, dorsaVi conducted a follow- up assessment focusing on the same areas of study utilizing the new procedures and equipment.
Direct Patient Care: the solution can be simple but scientific validation is key A key finding from the initial study showed that when it came to changing a patient’s linen, nurses spent 43% of the time bent over, with a spinal lumbar flexion of more than 40%. This direct patient care activity was placing Monash nurses in the “red zone” for risk of injury, indicating a high potential for lower back injury. dorsaVi tested two new systems, designed to reduce risk when changing linen. System A was an automatic patient turning system controlled by a remote. System B was an inflatable lateral turning device, with two inflated chambers.
While nurses were performing their daily task, Monash was able to survey the movement data and subsequently analyze the tangible decrease in high-risk movements, and the cost/benefit of each system. From the data obtained, Monash was able to see that both systems would provide a significant improvement to risk reduction among their nursing staff. Therefore, to make the final decision a return-on-investment (ROI) calculation was performed to evaluate both system’s implementation costs and effectiveness to reduce injury costs per year. After reviewing the data obtained in ViSafe’s ROI calculation, Monash selected System A.
“System A was the clear winner, as it allowed us to mitigate a high risk patient handling task, while reducing the time and number of staff required to do a task, and increasing productivity. The ViSafe data was used as the foundation for a business case to implement this system throughout our hospitals. Showcasing a proven return on investment is a powerful tool when trying to implement change within the business, and dorsaVi’s data allowed us to do just that.” - Andrew Williamson, Head of Public Affairs and Foundation at Monash Health
Data Driven Decision Making dorsaVi’s ViSafe is a total workplace safety solution, which includes collecting and analyzing data from wearable sensor technology, as well as recommending applied changes to work practices. It enables employers to watch video footage of workers moving in real-time work situations, and see first-hand through live data how different movements and actions can increase and reduce risk of injury for their workforce. ViSafe also tests the effectiveness of proposed changes to workplace design, equipment or methods based on objective evidence. It is one of the only technologies in the world that can accurately measure movement and provide truly objective data to inform workplace decisions. Because dorsaVi offers the only FDA-approved activity tracking system for workplace injury prevention, US employers have a unique opportunity to marry wearable technology with proven results. To learn more about how medical-grade wearables can reduce workplace injuries and improve productivity for your organization, please contact email@example.com.
Christine Ferris Connect Health Collaboration firstname.lastname@example.org www.connecthealthcollaboration.com www.HRProfessionalsMagazine.com
Open for business means open for benefits Why benefits communication is — or should be — a year-round effort By BLAKE ROGERS, JIMMY HINTON, and CHRIS MENARD
Health insurance? Check. Dental plan? Check. Life, disability or other supplemental coverage? Check, check and check. If your company is like most in America, you just completed your annual benefits enrollment. The meetings are over, the posters are down and the enrollment forms are tidied away in their virtual filing cabinet. Even with good benefits providers on your team doing the heavy lifting, it was a lot of work. Thank goodness it only happens once a year. Except for a few new hires you’ll probably make over the next year, you’re good until next fall, right? Sorry to burst that euphoric bubble, but to maximize the major investment your company makes in its benefits program, helping your employees understand and make the best use of their benefits requires year-round effort. But it’s worth the work, and here are two great reasons: employee engagement and cost control.
BUILD A BOND WITH WORKERS Strong benefits communication does more than help your employees make better benefits choices during open enrollment. It also helps you hold onto your top talent by increasing job satisfaction and workplace loyalty. Research shows there’s a strong, direct tie between how employees feel about their benefits communication and how they feel about the place they work. In fact, employees who rate their benefits education highly are also much more likely — 76 percent — to rate their workplaces as very good or excellent, according to the Colonial Life/Unum U.S. Worker Benefits Survey released last year. Building a strong, long-term relationship with your employees drives up retention, morale and productivity — and all three affect profit. Think what it costs you to replace a worker who leaves for perceived greener pastures. Now add in the resource drain of performance-managing out a disengaged employee, who later then must be replaced. Of course, great benefits communication alone isn’t going to change a slacker into a superstar, but there’s a clear connection between how well you communicate and how committed your employees are to their work and their company. 42
THE BOTTOM LINE ON THE BOTTOM LINE Avoiding turnover is only part of the cost-control formula. There are hard dollar costs associated with your employees not understanding and using their benefits to protect their health and well-being. Take chronic diseases such as diabetes, obesity and arthritis, for example. The U.S. Centers for Disease Control and Prevention say they account for three-fourths of health care costs. In fact, the Arthritis Foundation says arthritis is the nation’s top cause of disability. Yet these types of chronic conditions are among the most preventable problems. Not taking advantage of preventive care coverage such as health screenings and flu shots for fear of the doctor’s bill can lead to more serious illnesses and lost time at work that might have been avoided. If your company offers more than one health plan option — for example, a lower-deductible, higher-premium traditional preferred provider organization plan and a high-deductible “consumer-driven” plan with lower premiums — it’s important for your employees to understand how each works so they can make the best financial and health decisions for themselves and their families. Health savings accounts and flexible spending accounts can help employees plan for and manage health care expenses — but only if they participate in them. And that won’t happen if they don’t understand them. By the way, if you’re ready to pat yourself on the back because your benefits communication is pretty good, you might want to ask your employees if they agree. Research we’ve seen shows there’s a pretty big disconnect on this issue. Less than 40 percent of employers have a formal benefits communication plan (surely, you’re not one of those), yet the vast majority — 90 percent — think their approach is effective, according to LIMRA’s 2016 Help Employers Connect the Dots report. But only a third of employees in our U.S. Worker survey said they understand their benefits very well.
KEEP TALKING Keeping the benefits conversation with your employees going all year doesn’t have to drain your resources. Here are some simple low- or no-cost ideas to build benefits and health knowledge beyond enrollment season:
) Benefit of the month — Run a series of articles on your employee intranet site explaining in plain language different benefits and how to tell if they’re a good fit. Just because you explained the difference between term and whole life six months ago doesn’t mean Janet who’s now expecting a baby will remember it. Keep the stories archived where they’re easy to find and refer back to.
Blake Rogers Tennessee territory sales manager, Colonial Life & Accident Insurance Company email@example.com or 615-696-6672
) Share success stories — Use email newsletters, websites or displays to celebrate employees who’ve lost weight or reduced their dependence on medication for high cholesterol.
) Think seasonally — Create a calendar to talk with employees about
Jimmy Hinton Mississippi territory sales manager, Colonial Life & Accident Insurance Company firstname.lastname@example.org or 601-326-2954
seasonal health issues such as staying in shape in the winter and safety for outdoor summer activities.
) Promote free external resources — Websites such as Colonial Life’s WorkLife (http://worklife.coloniallife.com) have a wealth of information on benefits and health. Or check out Colonial Life’s interactive Benefits Learning Center website (http://www.benefitslearningcenter.com/en/coloniallife) that can be customized with your company’s benefits.
) Bring in experts — Invite your benefits providers to hold open hours or brown-bag lunch-and-learns to explain different benefits throughout the year and answer employees’ questions. If you’d like to learn more about how to keep the benefits conversation going with your employees all year, call or email us. They say talk is cheap, but in our opinion, it’s sometimes priceless.
Chris Menard Kentucky territory sales manager, Colonial Life & Accident Insurance Company email@example.com or 502-272-9664
ABOUT COLONIAL LIFE Colonial Life & Accident Insurance Company is a market leader in providing financial protection benefits through the workplace, including disability, life, accident, dental, cancer, critical illness and hospital confinement indemnity insurance. The company’s benefit services and education, innovative enrollment technology and personal service support 85,000 businesses and organizations, representing 3.5 million of America’s workers and their families. For more information, visit www.ColonialLife.com, www.facebook.com/coloniallifebenefits, www.twitter.com/coloniallife and www.linkedin.com/company/colonial-life. Colonial Life is a registered trademark and marketing brand of Colonial Life & Accident Insurance Company.
Annual Seminar on Labor & Employment Law
Friday, December 2, 2016 8:30 am—5:00 pm Holiday Inn—University of Memphis, 3700 Central Ave. Registration opens at 8:00 am
Get all the tools you need to address current labor and employment law issues Hear from the experts on these issues Receive HRCI and SHRM Credit Network with other HR Professionals, business owners and attorneys Enjoy continental breakfast, lunch and snacks
Register at memphisbar.org/cle Questions? 901-527-3573 or firstname.lastname@example.org
The fact is that happy employees are productive employees. They get results. They innovate. They are the force behind the advancement of industries. Effective employee recognition programs are self-sustaining motivational tools that keep the fire lit. If you're ready to spark the flame, Recognizing and Engaging Employees for Dummies is the ideal guide for designing, implementing, and maintaining the program your employees have been waiting for.
Recognizing & Engaging Employees for Dummies By WILLIAM CARMICHAEL
INTRODUCTION Regardless of your current role, this anecdote will sound eerily familiar. You are a new employee and sitting in a training class with other newbies when you hear the trainer’s question; “What motivates you?” “Money” one person replies. Heads nod. Another responds with “My family!” More positive nods. Then, “Time-off” is heard from somewhere in the back of the room. Agreement, all around, to be sure. But then, without warning the person next to you raises her hand, clears her voice and says, “To be recognized and appreciated for the work I do!” Suddenly everyone in the room looks in your direction and applauds. Somehow, money, family, and time-off just took a back seat. If we are honest, this scene is played out every week in every organization across the country and resonates with us all. Unfortunately, we as managers fail to heed the simple message being delivered. Employees simply want to be recognized for the work they do. Recognizing and Engaging Employees for Dummies by Dr. Bob Nelson, shows us how!
WHY THIS IS A MUST-READ To borrow from the author’s introduction, Recognizing and Engaging Employees for Dummies gives you the tools and information you need to improve morale, productivity, and personal achievement with a successful employee recognition program. Written by a world-leading authority in employee recognition, this book walks you step-by-step through the design and implementation process and describes the incentives that work, the behaviors to reward, and the mechanisms that must be in place for the program to be effective in the long term. You'll learn how to pinpoint the places where engagement and recognition could improve the bottom line, and how to structure the reward for optimal balance between motivational, financial, and organizational effectiveness. With clear explanations and a fun, friendly style, this book is your quick and easy guide to boosting productivity, profit, and customer satisfaction. Most Americans who leave their jobs cite lack of recognition as the driving factor. When your employees feel appreciated, they stick around, work harder, achieve more, and drive your business onward and upward. This book shows you how to bring that dynamic to your workplace, with stepby-step guidance and helpful advice to: • Design successful recognition programs • Create powerful incentives for employees • Reduce turnover, improve engagement, and drive excellence • Foster a happier and more productive workplace 44
STRUCTURE, LAYOUT, AND CONTENT Similar to other ‘…for dummies” books published by Wiley & Sons, the modular structure and layout is comfortably familiar, as one would expect from a textbook. What I find most appealing however is that Nelson presents the information as a reference guide. A “field manual,” if you will, that is easy to follow and provides countless approaches for solving engagement and recognition problems within any organization. And as a common feature, throughout the book readers will notice very specific icons that identify: • Useful or practical pieces of advice • Ideas worth remembering • Anecdotes from the author • Case studies • How to avoid problems Interestingly, readers will also find the book has a cathartic ebb and flow to it. They will immediately recognize the industry, organization, situation or individual being described and find they have a connection to it. Suddenly, employee recognition and engagement makes sense. As a former HR practitioner, I was drawn to the applicability of the topics. As an example, Chapter 14’s- Troubleshooting Recognition Problems skillfully maneuvers through the very delicate topic of when and how to recognize employees effectively while Chapter 18’s- Top Ten Ironies of Motivation quickly disseminates very sound advice about what works and what doesn’t. Here, the author masterfully drives the point home that “Not everyone wants what you want! Managers often identify good wages, job security, and promotion or growth opportunities as the primary reasons their employees remain at work. Why? Because these are so often the very things that motivate them and they believe their employees are motivated by the same thing.”
First and foremost, Recognizing and Engaging Employees for Dummies is written for any manager looking for creative ways to motivate or recognize their employees. Stated earlier, it is an excellent, practical resource guide filled with “tried and true” advice. But it also contains needed theoretical concepts where the author wisely constructs strategic meaning to recognition. Chapter 11s- Implementing Organizational Recognition is where some readers will likely recognize management fundamental processes by Dr. Peter Drucker or the four levels of measurement by Dr. Donald Kirkpatrick and specifically how managers can use existing surveys for needed employee feedback. Generational differences and attitudes are also addressed as to recognition and motivation. Any HR professional will agree that what works for a seasoned employee will not for a millennial. The problem, as our author acknowledges, is not for lack of trying but more from a manager’s “self-perpetuating behavior”
and dangerously relying upon past recognition programs that no longer apply, and especially for this new breed of employee, now expecting something entirely different. Managers, I encourage you to get this book and use it! The first thing you will likely notice is how quickly you will locate the employee recognition or engagement topic you are looking for. Business owners, you owe it to yourself to discover what your employees truly need, want and expect. And HR professionals; that one creative idea needed to move the motivational needle for your organization will be found here.
WHO WILL BENEFIT MOST FROM THIS BOOK? Managers, business owners, human resource professionals
Dr. Bob Nelson is considered one of the world's leading experts on employee engagement, recognition, and rewards. He is president of Nelson Motivation, Inc., a management training and consulting company that helps organizations improve their administration practices, programs, and systems.
William Carmichael, Ed.D Strayer University email@example.com www.strayer.edu
In Memory of John E. Megley III
February 9, 1932 – November 9, 2016 Dr John Edward Megley, III, 84, passed away on November 8, 2016 after a 6-year battle with lung cancer. John served in the U.S Army in 1952 as a lieutenant. He attended the University of Illinois-Champaign and received a BA in Biochemistry. He worked for Encyclopedia Americana as an editor and Abbott Laboratories as a cancer researcher in the Chicago area. He subsequently received an MBA from Roosevelt University in Chicago, IL, a PhD in Management/Labor Studies from the University of Missouri-Columbia, MO and a BSBA with an emphasis in Accounting from Christian Brothers University in Memphis, TN. Upon completion of his PhD he taught at Bowling Green University, Southern Illinois University at Edwardsville, IL, Sangamon State University (University of Illinois at Springfield), University of Scranton, Grand Valley University in Allendale, MI., Christian Brothers University, Memphis, TN. At CBU John was chair of the Department of Management and Marketing, and Director of the MBA program. He retired from Christian Brothers University in 2009 after twenty years of service. John was also a Labor Arbitrator listed with the Federal Mediation and Conciliation Service. John was a charter member of the Advisory Board of HR Professionals Magazine.
North Central MS Human Resources Association Meeting October 19, 2016 in Water Valley, MS The North Central MS Human Resource Association serves the North Central area including Batesville, Oxford, Grenada, Senatobia, Water Valley and Winona. The chapter is comprised of HR professionals from manufacturers, financial institutions, employment agencies, community development corporations and other businesses. The October meeting was held at BorgWarner in Water Valley. Cynthia Y. Thompson, Editor of HR Professionals Magazine, was the speaker. Her topic was “The 2016 Election and 2017 Legislation Impacting HR.”
Amy Davis, M.S., PHR, President of North Central MS HRA Board of Directors, presided at the luncheon meeting. Amy is SR HR Manager at Weyerhaeuser in Olive Branch.
North Central MS HRA 2016 Board of Directors Front Row (Left to Right): Amy Davis, North Central MS HRA President; Andrea Jekabsons; Jessica Hughes; Dylan Wilmoth; Cynthia Thompson; Collin Dexter; Chris Byrd, MS SHRM Northern District Director Back Row (Left to Right): Lisa Smith, MS SHRM Foundation Director; Sandra Sulton; Max Law
Highlights from the
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When: Tuesday, August 30th 2016 ! 8:30 AM to 4:30 PM CDT
Financial Impact of People Talent Management Strategies Where: Doubletree by Hilton Memphis Employee Engagement ! 5069 Sanderlin Ave Optimizing People & Efﬁciency ! Memphis, TN 38117 Simple Understanding of Financials ! Phone : 901-767-6666 1 2 3 Facing Challenges & Taking Action 1 (L-R) Dr. Gary Bodam and Voss Graham explaining the Talent Reality Business Measuring People Performance Register & More Information at… Simulation Board 2 (L-R) Alicia Martin and Chris VanHekken 3 (L) Voss Graham and Cindy Ison (Right back) Cynthia Thomas (Right front) Alison Nelson 4 Talent Reality Business Simulation Board Call: 901-757-4434 !
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