HR Professionals December 2018

Volume 8 : Issue 12

TM

www.HRProfessionalsMagazine.com

The Art & Science of Market Pricing Positions

2019

Compensation Trends

Special Issue on Compensation and Performance Management

The Business Case for Succession Planning

Wendi Safstrom

Executive Director SHRM Foundation The Impact of Midterm Elections on Workplace Policy

Pay Equity:

A Continuing Trend of Legislative Action

International Presence.

Local Knowledge.

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

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Bringing Human Resources & Management Expertise to You

2019 average increase in wage budgets is projected to be around 3.2% www.HRProfessionalsMagazine.com Editor

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

The Thompson HR Firm, LLC HR Consulting and Online HR Certification Classes Art Direction

Park Avenue Design

Contributing Writers

Jeff Bakke Andrea Burleson Tiffany Cardwell William Carmichael Frank L. Day Jr. Harvey Deutschendorf Billy S. Fawcett Brad Federman Nancy Hammer Julie Henderson Blair Johanson Bruce Johanson Daveante Jones Dennis Koerner LaToi D. Mayo Catherine Norton Greg Siskind Louie Steigelman Cristie Upshaw Travis 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. Š2018 The Thompson HR Firm, LLC | This publication is pledged to the spirit and letter of Equal Opportunity Law. The following is general educational information only. It is not legal advice. You need to consult with legal counsel regarding all employment law matters. This information is subject to change without notice.

Features

4 note from the editor

5 WGU Tenn-K $10,000 Scholarship

6 Profile: Wendi Safstrom, Executive Director of SHRM Foundation 7 SHRM Foundation

12 Highlights from DisruptHR in Memphis October 25

18 7 Smart 2019 Background Screening Resolutions HR Should Make NOW

40 Book Look: The Elephant in the Brain by Kevin Simler and Robin Hanson 24 AI – Driving Company Culture Through Smart Workforce Culture Assessments

44 The Impact of Midterm Elections on Workplace Policy 45 When Work Works Awards

46 Highlights from cityCURRENT Breakfast Meeting in Memphis October 16

50 5 Ways Organizations Benefit from Christmas Giving

Compensation and Performance Management

14 The Business Case for Succession Planning 22 2019: Pay Me (Too) Now!

36 The Art & Science of Market Pricing Positions 38 Pay Equity: A Continuing Trend of State Legislative Action in 2018

47 The Bluegrass Compensation Association

Employee Benefits 26 Reducing Health Care Costs with Reference-Based Pricing

28 How Employers Can Drive Safer Hospital Care

Employment Law

10 How Will Justice Kavanaugh Impact Employers?

16 Highlights from the 39th Annual Wimberly Lawson Labor and Employment Law Update Conference in Knoxville November 1-2 19 Cross, Gunter, Witherspoon & Galchus Seminars 20 Do Your Company Policies and Procedures Violate the ADA Rules Governing Disability Related Inquiries and Medical Examinations?

35 Managing Reemployment of Returning Service Members under USERRA 48 What HR Professionals Need to Know About Employment Immigration for 2019

Industry News

8 Highlights from the 9th Annual WTSHRM Human Resources Employment Law Fall Conference in Jackson, TN, November 7 42 Highlights from the Excellence Through Leadership Conference in LaGrange, GA, October 18-19 49 Highlights from the 10th Annual NEASHRM Annual Supervisor Seminar in Jonesboro, AR, November 13 January 2019 Issue Features 2019 Best Lawyers in Labor and Employment Law Plus Employment Law Updates and Employee Benefits

Deadline to reserve space December 15

30 Trump Seeks to Ease Rules for Multiple-Employer Retirement Plans and Required Mandatory Withdrawals

32 What Millennials Should Know About Open Enrollment www.HRProfessionalsMagazine.com

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a note from the Editor The focus of our December issue is compensation and performance management. We have lots of information in this issue to bring you up-to-date on the latest in the world of compensation and performance management. Blair and Bruce Johansan with the Johanson Group provided an excellent article on 2019 compensation trends that you don’t want to miss! Tiffany Cardwell with MCM CPAs & Advisors contributed an article on the art and science of market pricing. LaToi Mayo with Littler has provided an update on pay equity and the continuing trend of state legislation in this area.

It is the season of giving, so don’t forget to make your donation to the SHRM Foundation. In 2018 they provided 300 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. I know you will love reading Wendi Safstrom's profile, and learning about her role as Executive Director of the SHRM Foundation. Be sure to catch Nancy Hammer's fantastic article on the impact of the midterm elections on workplace policy. She serves as Vice President, Regulatory Affairs & Judicial Counsel for SHRM. Next month our emphasis will be on top employee benefits companies. We will also feature the U.S. News best employment law attorneys. I hope you will join us for our monthly complimentary webinar sponsored

by Data Facts. As always, you will receive SHRM and HRCI credit. Watch for your invitation by email.

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

cynthia@hrprosmagazine.com cythomps@twitter

Making Your HR To-Do List & Checking it Twice for the New Year Fisher Phillips Memphis Office Annual Seminar

December 13, 2018 7:30 a.m - 4:30 p.m.

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• Conduct an Internal Wage & Hour Audit • Create an Effective Drug Testing Policy • Avoid Discrimination in the Hiring Process • Prevent Bullying & Workplace Harassment In-House Counsel Ethics Track • Preserving the Privilege in Internal Investigations • Grisham on Grisham: Legal Ethics Meets the Movies HR Track • Active Shooter Training with Officer Terry Donald, Shelby County Office of Preparedness • I-9 Compliance: What You Don’t Know Can Hurt You • What to Do When Terminating a Violent Employee For more info or to RSVP, please contact Abby Tasman at atasman@fisherphillips.com or 502-561-3995.

6.5 TN CLE Credits approved, including 2.5 Ethics Credits. 6.5 SHRM and HRCI credits pending.

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Wendi on the cover

SAFSTROM

WENDI SAFSTROM, Executive Director, SHRM Foundation Ms. Safstrom has also held human resource management roles with the Leo Burnett Company and Hyatt Hotels Corporation in Chicago, Illinois. Ms. Safstrom has a BS in Business Adminis-

Wendi Safstrom is a senior non-profit leader committed to serving the public through philanthropic program management, cultivating strategic partnerships and managing and developing high performing teams. Ms. Safstrom has both association and nonprofit management experience including; national program development and administration, membership strategy, marketing and product development, grant management, development and donor stewardship, and leading cross functional teams. Ms. Safstrom currently serves as Executive Director for the Society for Human Resource Management Foundation (SHRM Foundation), where she leads the development and implementation of SHRM Foundation's programmatic, development, and marketing and communication strategies in support of SHRM Foundation's mission and vision, creating growth plans and

tration from the Eli Broad School

ensuring alignment with SHRM goals.

of Business at Michigan State

The SHRM Foundation is a values-based charity organization whose mission is to champion workforce

University and was recognized as a member of the 2014 "Power 20"

by Restaurant Business Magazine

and workplace transformation. It provides research-based HR solutions for challenging inclusion issues facing current and potential employees, scholarships to educate and develop HR professionals and opportunities for HR professionals to make a difference in their local communities. The SHRM Foundation is a 501(c)(3) nonprofit affiliate of the Society for Human Resource Management.

as a leader in philanthropy within

Prior to assuming the role at SHRM Foundation, Ms. Safstrom served as Vice President at the National

the restaurant industry.

the development and implementation of the Foundation's programming, including workforce devel-

Restaurant Association and National Restaurant Association Educational Foundation, where she led opment initiatives, scholarship and event management, community relations and engagement initiatives. Of particular note, Ms. Safstrom lead the implementation of the restaurant industry's premier high school career and technical education program, growing the program to over 2,000 public high schools, engaging over 150,000 students annually, nationwide. In 2016, she served as lead project director for the development of a $10M contract awarded by the US Department of Labor to develop the hospitality industry's first apprenticeship program, and was instrumental in the Foundation's reorganization and relocation of operations from Chicago, Illinois to Washington, D.C., transforming the staff and culture. ď Ž

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The SHRM Foundation is a values-based charity organization whose mission is to champion workforce and workplace transformation. It provides research-based HR solutions for challenging inclusion issues facing current and potential employees, scholarships to educate and develop HR professionals, and opportunities for HR professionals to make a difference in their local communities.

In 2018, the Veterans at Work Certificate program is the SHRM Foundation’s newest inclusion initiative. The SHRM Foundation identified veterans as a highly valuable part of a diverse and inclusive workforce and are dedicating resources to helping former service members integrate into and become engaged in the civilian workforce. The certificate program aims to help participants learn the value these skilled veterans bring to the civilian workplace.

The content for the Veterans at Work Certificate program is based on a new guidebook that makes the business case for hiring veteran candidates - The Recruitment, Hiring, Retention & Engagement of Military Veterans by Deborah Bradbard and James Schmeling (SHRM Foundation, 2018). Through this guidebook, HR professionals, hiring managers and front-line supervisors can learn best practices to attract, hire, and retain these talented professionals.

The program is entirely free, open to all, and requires the completion of five tasks: two surveys, two learning segments, and a short quiz. As an additional bonus, this uniquely free educational program also earns SHRM-CP or SHRM-SCP credential-holders ten professional development credits (PDCs) toward recertification.

While inclusion issues may change over time, a constant year after year at the SHRM Foundation is scholarships to educate and develop HR professionals.

In 2018, the SHRM impacted the lives of more than 300 HR professionals and students by awarding more than half a million dollars in scholarships and awards. Scholarships are delivered to those seeking SHRM certification or recertification, learning and networking opportunities at SHRM conferences, or undergraduate or graduate degrees. These scholarships help educate and develop HR professionals and students to make change happen.

Thanks to our generous donors, the SHRM Foundation can make life-changing experiences reality and help recipients thrive and achieve their goals. Whether it is a state council or chapter using an Innovation Grant to drive veteran employment in their communities or an HR professional or student who without SHRM Foundation support would be unable to participate in a SHRM Conference, the SHRM Foundation is committed to advancing the HR profession and with your help, transforming their vision into a reality.

To learn more about the SHRM Foundation and to read The Recruitment, Hiring, Retention & Engagement of Military Veterans guidebook, visit shrmfoundation.org.

The Veterans at Work Certificate program is made possible due to the generous sponsorship from Comcast NBCUniversal, in partnership with PsychArmor InstituteÂŽ, and inaugural programming made possible by The USAA Foundation and subject matter experts at the Institute for Veterans and Military Families at Syracuse University.

The SHRM Foundation is a 501(c)(3) nonprofit affiliate of the Society for Human Resource Management.

www.HRProfessionalsMagazine.com

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Watch our Facebook Live videos at www.Facebook.com/hrprofessionalsmagazine

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1 Amy West, SHRM-SCP, SPHR, TN SHRM Director Elect and Past President of WTSHRM, introduced the sponsors of the event. 2 Dr. Samuel W. “Dub” Oliver was the keynote opening speaker. His topic was “Saddle Up! - Leadership in HR – Strategies for Human Resources to lead effectively as a business partner.” 3 Rob Binkley presented, “Selecting Your Posse: Recruiting, Hiring, and Onboarding Tips – Part 1– A review of key legal concerns for recruitment and selection activities.”

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4 Panelists for “Best Practices in Recruiting, Hiring, and Onboarding” (L-R) Dr. John Carbonell, Robert O. Binkley, Thorne Barbour, Kyle Autry, and Martha Smith-Harwell 5 (L-R) Jennifer Ivy, Rob Binkley, J. V. Thompson, Geoffrey Lindley, and John Burleson. The Conference was presented in conjunction with The Law Firm of Rainey, Kizer, Reviere & Bell, P.L.C. 8

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6 WTSHRM Board of Directors (L-R) Amy West, Anna Higgs, Debbie Harris, John Carbonell, Janice Shipman, and Jennifer Howell 7 WTSHRM members who were recipients of awards at the TN SHRM State Conference in Sevierville in September. (L-R) Debbie Harris, Vice President of Membership, was honored with an HR Professional Excellence Award; Dr. John Carbonell, WTSHRM President, was awarded the James House Williamson Award; and State Director Elect and WTSHRM Past President, Amy West, was awarded an HR Professional Excellence Award.

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8 (L-R) Geoffrey Lindley and Matthew Courtner presented “Getting Out of Dodge: Dealing with Employees on Leave – Explore strategies for how to effectively manage employees’ needs for leave and avoid legal pitfalls.” 9 (L-R) J. V. Thompson and John Burleson discussed “Circling the Wagons! Employment Law Update – A survey of recent changes to federal and state employment laws.”

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10 Jennifer Ivy and Geoffrey Lindley wrapped up the conference with their presentation, “Encountering the Wild Wild West! – Employment Case Studies – An interactive discussion of recent employment law cases and the application of relevant concepts and HR strategies.” 11 Lunch Sponsors for the Conference from Express Employment Professionals were Ronnie and Susan Morris.

Attendees at the 9th Annual Human Resources & Employment Law Fall Conference at the Union University Carl Grant Event Center in Jackson, TN. www.HRProfessionalsMagazine.com

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HOW WILL JUSTICE KAVANAUGH IMPACT EMPLOYERS?

By BILLY S. FAWCETT

The Supreme Court’s newest justice has joined the Court just in time for the judicial October term. Justice Kavanaugh, sworn in on October 6, 2018, has spent most of his career dealing with accusations of being too conservative. Justice Kavanaugh’s overall track record tilts conservative, but not as conservative as many might assume. He likely will fall somewhere left of Justices Gorsuch, Thomas, and Alito, but to the right of Chief Justice Roberts and of his predecessor, Justice Kennedy.

However, this article will focus more specifically on how Justice Kavanaugh’s judicial philosophy will affect the Court’s decisions on labor and employment cases.

JUSTICE KAVANAUGH’S PHILOSOPHY During his time on the D.C. Circuit of Appeals, Justice Kavanaugh sided with employers more than employees. However, that does not mean he never rules in favor of employees, although he rarely, if ever, is the lone judge supporting the employee. Justice Kavanaugh has written some brow-raising opinions and concurrences in the labor and employment context.

TITLE VII Justice Kavanaugh’s views on Title VII are surprisingly expansive. In two concurrences, he chided the majority opinion for not going far enough in expanding Title VII’s coverage. These concurrences, however, do not argue for creating new protections, but instead logically propose expanding existing protections. In one case, he wrote that discriminatory transfers and denials of transfer requests should always be an adverse employment action under Title VII, and in another he wrote that calling an employee a racial slur one time is enough to create a hostile work environment.

In Ortiz-Diaz v. HUD, the court found that the denial of a transfer request was an adverse employment action because it affected the plaintiff’s ability to further his career, and, important to the court, make more money. The plaintiff gave other reasons for his desire to transfer—he wanted to be closer to home and he wanted more field experience. Ultimately, the court only focused on the monetary and career aspects of the denial of his transfer. That is, if he simply wanted the transfer to work closer to home, the court apparently would have upheld summary judgment. Justice Kavanaugh felt that this ruling was too narrow: “As I see it, transferring an employee because of the employee’s race (or denying an employee’s requested transfer because of the employee’s race) plainly constitutes discrimination . . . in violation of Title VII.” Ortiz-Diaz v. U.S. Dep’t. of Housing & Urban Dev., Office of Inspector Gen., 867 F.3d 70, 81 (D.D.C. 2017).

In Ayissi-Etoh v. Fannie Mae, the court found that the plaintiff provided sufficient evidence of a hostile work environment to survive summary judgment. Notably, the court held that the employer’s use of a racial slur directed at the plaintiff might have been enough by itself to create a hostile work environment. The court ultimately relied on the totality of incidents to find that a reasonable jury could find a hostile work environment. Justice Kavanaugh took issue with this. In 10

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his concurrence, he discusses various types of instances where a single act can create a hostile work environment, most of which include a death threat or a physical act. In his concurrence, where he cites Langston Hughes, Alex Haley, and Harper Lee, he notes that “being called the n-word by a supervisor . . . suffices by itself to establish a racially hostile work environment.” Ayissi-Etoh v. Fannie Mae, 712 F.3d 572, 580 (D.D.C. 2013). Essentially, he wanted the majority to hold, rather than mention the possibility, that the use of a racial slur on one occasion can create a hostile work environment.

LABOR Justice Kavanaugh’s decisions for the D.C. Circuit are decidedly unfriendly toward unions. Justice Kavanaugh dissented in a case where the majority found that two companies were alter egos and refused to recognize a collective bargaining agreement between one of the companies and a union. In Island Architectural Woodwork, Inc. v.

NLRB, one of Island’s owners complained that it had to pay higher wages because its employees had unionized, and these higher wages hurt its profits. The CEO of Island’s daughters began operating a similar business, Verde, in one of Island’s buildings. Verde workers performed the same work on the same equipment. The NLRB, and the court, held that Verde was an alter ego of Island. Justice Kavanaugh dissented.

Justice Kavanaugh agreed with the majority regarding the applicable law, but he disagreed in its application. He noted that the companies did not share ownership, management, employees, or funds. Moreover, the companies had no financial interest in each other. Justice Kavanaugh further justified his decision by pointing out that the administrative law judge, who heard the facts first-hand, found that Verde and Island were not alter egos. Even further, the administrative law judge, and subsequently Justice Kavanaugh, pointed out that Verde did not affect the union employees of Island.

In this case, Justice Kavanaugh demonstrated his judicial restraint— something that will nearly always favor employers—while his colleagues stretched the analysis and agreed with the NLRB because they “found something shady in the fact that Verde was started and primarily owned by two daughters of Island’s primary owner.” Island Architectural Woodwork, Inc. v. NLRB, 892 F.3d 362, 378 (D.D.C. 2018).

CHEVRON DEFERENCE Justice Kavanaugh’s disdain of Chevron deference could have an effect on labor and employment law. Justice Kavanaugh disfavors Chevron deference, as he believes it takes power granted to the Court in Article III and gives that power to the executive branch via administrative agencies. He has written an article discussing it, and he has sided with opinions that limit it. It appears if the opportunity arises, he will likely try to limit it.

JUSTICE KENNEDY’S PHILOSOPHIES Justice Kavanaugh takes Justice Kennedy’s seat. Justice Kennedy was often the swing vote, so many commentators assume the Court will

now swing wildly in favor of employers. However, this may not be the case. Justice Kennedy, who indeed tended toward more liberal decisions than Justice Kavanaugh, was reliably pro-employer as a justice.

Justice Kennedy often broke from the conservative justices on civil rights issues, but not in employment cases. He joined the conservatives in all of the decisions during his tenure regarding unions and wage and hour issues. He also stayed with the conservatives in decisions regarding Title VII. So, although he strayed from his conservative counterparts on major civil rights cases, he did not stray on cases regarding labor and employment.

EFFECTS Because Justice Kennedy consistently voted to limit the scope of Title VII and the rights of unions, it will be hard for Justice Kavanaugh to make a noticeable impact. Of course, Justice Kavanaugh is more conservative overall than Justice Kennedy, so that could have an impact on LGBT issues under Title VII. The Court will likely decide, either this term or next, whether sexual orientation is protected by Title VII, and then, depending on that ruling, whether gender identity is protected by Title VII. Of course, the sexual orientation case is curious as the Department of Justice and the EEOC have completely different views on the issue, which might have an effect on whether the Court decides to hear the case, and it might have an impact on the Court’s ruling. Justice Kavanaugh, with his self-touted textualist view, will almost definitely find that Title VII does not protect sexual orientation. Justice Kennedy, the author of the opinion that legalized gay marriage, might well have ruled that Title VII does, in fact, protect sexual identity.

LONG-TERM EFFECTS Overall, employers might not notice much of a change. The end effect of Justice Kavanaugh’s nomination is that Chief Justice Roberts is now the swing vote. Justice Kennedy had a notorious reputation for siding with the liberal justices on some civil rights cases. Replacing Justice Kennedy with a reliable conservative should give employers more confidence that labor and employment laws will not get more restrictive via the judiciary.

Additionally, the Court now has three Justices that have publicly questioned, either in opinions, papers, or the media, the Chevron decision. It seems likely that the power to interpret agency rules could come back to the courts. This shift will significantly limit the power of the EEOC and NLRB. CONCLUSION Employers should not expect a major swing in labor and employment law because of Justice Kavanaugh’s recent confirmation. However, employers can have more confidence that the Court will hand down conservative labor and employment rulings, because Justice Kavanaugh will consistently rule pro-employer, and he replaces the reliably pro-employer, but always unpredictable, Justice Kennedy.

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

Martenson, Hasbrouck & Simon LLP focuses its practice

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

Contact Marty Martenson at (404) 909-8100

3379 Peachtree Road, NE Suite 400 Atlanta, GA 30326 martensonlaw.com

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DisruptHR Memphis Dixon Gallery & Gardens October 25th, 2018

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1 The ADP Team. Back Row (L-R) Harrison Harpole, Joe Fitzpatrick, Ross Ridenhour, Susan Hanold, Nathan Hay, Hunter Acosta, Jeff Jenks; Front Row (L-R) Molly Marciano, Mary Billingsley, Jenny Story, Taylor Story. ADP is a sponsor of DisruptHR 2 The HRO-Partners Team. (L-R) Eriel Traywick, Arsen Petrosyan, Karen Clawson, Tisch McDaniel, Austin Baker, and Nielsen Ferry. HRO-Partners is a sponsor of DisruptHR.

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3 Justin Farmer with Vaco and Taylor Story with ADP 4 Tisch McDaniel, 2017 President of SHRM-Memphis, with Jeff Jenks with ADP. 5 Austin Baker, President and CEO of HRO-Partners, was one of the speakers. 6 Robert Wilson with the Culture Shift Team was one of the speakers.

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7 Dr. Susan Hanold with ADP, Cynthia Thompson with HR Professionals Magazine, and Harrison Harpole with ADP 8 The Vaco Team. (L-R) Justin Farmer, Jessica Van Eyck, Stuart Leslie, Amanda Davis, Kirk Johnston, Amber Barron, Sarah Schildmeier, Shane Davis

Attendees at the DisruptHR event.

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The Business Case for

Succession Planning

By BRAD FEDERMAN and ANDREA BURLESON

In April 2004, McDonald’s CEO Jim Cantalupo died suddenly of a heart attack after what many on Wall Street considered to be a successful 16-month run as the company’s Chief Executive. Within six hours of Mr. Cantalupo's death, 43-year-old Charlie Bell was voted into the CEO position by McDonald’s board. While McDonald’s had been grooming Mr. Bell to eventually succeed Mr. Cantalupo, circumstances warranted quick action. Within weeks of accepting the position, Mr. Bell was diagnosed with colon cancer.

His illness forced him to resign in late 2004 and he passed away in January 2005. While these deaths hit McDonald’s hard, the company had the foresight to plan for succession in advance of these catastrophic events. Jim Skinner, who had also been in the pipeline for the company’s top job, took over when it became clear that Mr. Bell could not continue.

Jim Skinner, who had also been in the pipeline for the company’s top job, took over when it became clear that Mr. Bell would not continue. Mr. Skinner then led as McDonald’s CEO until 2012. Among his many accolades, Mr. Skinner was named the "2009 CEO of the Year” by Chief Executive Magazine. How was McDonald’s able to respond so quickly to these tragic, unforeseen events? Succession planning. Every leader at McDonald’s is expected to have at least two people they are grooming for their positions.

While the death of two CEO’s in one year is rare, this series of events brought the importance of succession planning to the forefront of many companies’ talent strategies.

While most companies understand the importance of succession planning, only 21 percent have sufficiently prepared for viable successors and succession planned for key positions, according to Towers Watson Strategies for Growth Study.

Why don’t leaders plan for succession?

Some leaders say they don’t have time for succession planning. They view the processes associated with talent reviews, development planning, and mentoring as time consuming and outside of the scope of their “real” jobs. These leaders dismiss succession planning as a Human Resources function rather than a core and strategic component of their role. Other leaders view succession planning as important but lack the tools, processes, or support needed to benefit from succession planning. Commonly noted factors that limit succession planning include: • Successors leave. High potentials often have strong, active networks and can be recruited away.

• Incumbents in key roles stay. Well-performing incumbents remain in business critical roles, depriving junior talent of the learning experiences associated with those roles.

This limits the business’ pipeline and ability to develop its future leaders.

• Leaders make gut level, past-based decisions rather than engaging in futurefocused, process driven-decisions. When deciding on developmental opportunities, leaders may assume they know what people need or want without undertaking a rigorous approach to development planning that serves the business’ future while considering peoples’ career aspirations when planning.

• Low quality development plans. Far too often, leaders accept development plans that list “take a course” or “read a book” without specific connections between activities, competencies developed, and benefits to the business. Many employees will recycle the same plan year after year because the development planning is a mechanical, checkthe-box process with no accountability, follow-up, or link between development and business results.

• Poor or lacking follow-up and metrics. Building on the points above, managers are not held accountable by executives for ensuring that developmental activities have been completed and provided tangible value to the business, and thus, managers don’t hold their people accountable for completing learning activities.

• Some companies bite off more than they can chew. While the examples listed above fall under the umbrella of doing too little, some companies try to do too much. They adopt cumbersome, time-consuming processes that don’t deliver value to the business.

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Start with business critical positions instead of people In a 2005 Harvard Business Review article, Mark Huselid and his colleagues offered leaders a different way to think about succession planning. Rather than start by focusing on top talent, they recommended that leaders start by focusing on business critical positions. To identify these positions, leaders must be clear about the company’s strategy to determine which positions are most crucial in driving the strategy. The authors suggest that only 20% of the jobs in a company are likely to be “business critical” and these roles are not defined by hierarchy. While there is no doubt every company should have a viable plan for its top offices such as CEO, CFO, etc., the company’s strategy will determine which positions are business critical. An organization that differentiates itself based on service quality might focus on its service representatives or sales people, while a company focused on efficiency and low prices might focus on jobs associated with logistics management and purchasing. Roles are not inherently more or less strategic. To determine whether a role has critical significance, it must create value by driving the company’s strategy. This is not to undervalue positions that support and contribute to a company’s success but rather, to offer a starting point for succession planning. The authors note that companies should focus their more rigorous planning efforts on business critical or “A” positions, but also have talent strategies for B and C positions that serve as “feeders” to business critical positions.

According to a structured development plan, for business critical positions, succession plans should go at least two people deep. At least one “Ready Now” successor and one that is being groomed, either in 1-3 years of the job, meaning, they are 1-2 jobs away from the focal role.

While two successors is typically considered the minimum, more is better. Identifying junior talent in B or C positions who have the potential 3-5 years (or 2-3 jobs away from) key positions should be counted among every leader’s business objectives and part of his or her annual evaluation.

Next, identify top talent Without using getting overly complicated, leaders need to determine the criteria that define success for A positions.

While many companies identify multiple competencies they view as critical for positions, having too many competencies leads to the cumbersome review process that leaders dread (and thus, don’t do). Instead, focus on a handful of core competencies with well-developed behavioral benchmarks that truly differentiate top performers from the rest.

Consider competencies needed to drive business strategy today and those that will become increasingly important in the next 3-5 years.

When leaders measure people against success criteria, they are looking backward. That is, performance reviews evaluate people based on the prior review period’s performance. That’s why most talent reviews also include evaluations of people’s potential – that is, what are people capable of in the future? Popularly used processes such as 9-box ratings consider both past performance and future potential in assessing individuals and their place in succession plans for key positions.

Invest in development Most companies invest considerable time and energy into developing actionable business plans, supported by budgets that enable plans to be executed. Leaders meet on a regular basis (weekly, monthly, and/or quarterly) to discuss plans, evaluate progress against milestones, adjust actions as needed, and measure individuals against their targets. Interestingly, few leaders invest similar energy in developing the people who drive business plans.

Developmental planning, if done at all, typically consists of one liners such as “attend a communications course” or “shadow a colleague in the Operations Department” without any linkages between actions, competencies to be developed, and benefit to the business—even when planning forms include those categories. Few businesses would thrive if their business planning processes mirrored their development planning processes.

As the 70-20-10 model of development suggests, the best learning comes from doing. Seventy percent of a person’s development plan should be action learning based on doing work that builds on strengths, closes gaps, and/or develops skills that will be needed for the future. The Center for Creative Leadership’s “Developmental Assignments: Creating Learning Experiences without Changing Jobs” is an excellent resources for managers seeking to identify assignments that develop people while accomplishing business objectives.

Successful developmental planning does not necessarily add burden to people’s already full jobs. Instead, assignments are undertaken with the intention of developing a competency that supports a person in their current and future roles.

According to the model, 20 percent of a person’s development should focus on building developmental relationships. While working

with a mentor is an obvious resource to satisfy this developmental action, colleagues in other work groups can also provide learning for individuals. Lastly, 10 percent of a person’s development should come from what most people think of when they write their plans: Courses, books, seminars, online education, or completing their degrees. Well-planned coursework and training provides information and a foundation for growth, but it’s only when the “rubber meets the road” in real-life challenges that people and companies derive tangible value from education.

Conclusion When it comes to talent reviews and development planning, keep it focused, simple, and business-related. Be ready and make sure you have at least two people groomed to take on the business critical role just as McDonald’s did. Make the time to succession plan; find the resources and tools; focus on business critical roles; use rigorous evaluation and planning processes for top talent, which includes using the 70-20-10 rule of development planning – and, just like you’d do for business plans … monitor, adjust, and hold people accountable for their development plans.

STRENGTHENING BRANDS

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

Andrea Burleson, Talent Strategist F&H Solutions Group aburleson@fhsolutionsgroup.com www.fhsolutionsgroup.com

F&H Solutions Group can help you

71%, increase profit by about 12%, and increase sales by about 65%.

lower turnover by about

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

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Wimberly Lawson Attorneys Watch our Facebook Live videos from the conference at www.facebook/hrprofessionalsmagazine.com/videos

Save the Date – November 7th-8th, 2019 at the Hotel Knoxville

Highlights of the 39th Annual Labor and Employment Law Update Conference In Knoxville, Tennessee, on November 1 - 2, 2018

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1 Jeffrey G. Jones, Firm Managing Member, was the “man behind the mic,” at the Conference announcing general session speakers. 2 Frederick R. Baker, emcee for the Conference, welcomed attendees and provided the Conference kick-off. 3 James W. Wimberly, Jr., a founding principal of the Wimberly Lawson network, presented, “The Year in Review – What a Difference Another Year Makes.” 4 “Joint Employment – A Growing Risk for Employers,” was L. Eric Ebbert’s topic.

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5 Steve Rizzo, Personal Development Expert and Author of “Get Your SHIFT Together,” was the keynote speaker. 6 T. Joseph Lynch, III presented “Tennessee Workers’ Comp Update.” 7 M. Lee Daniels, Jr. provided “An NLRB Update.” 8 Jerome D. Pinn spoke on “The OFCCP and Affirmative Action.”

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Wimberly Lawson Attorneys

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9 “They Did What? What You Need to Know Going Into 2019,” was presented by William R. Seale. 10 Mary Dee Allen discussed, “Sexual Harassment – The #TimesUp and #MeToo Movements.” 11 “Hiring Those with Criminal Records,” was presened by J. Eric Harrison. 12 Edward H. Trent spoke on “LGBT & Religious Freedom – New Challenges for the Road Ahead.”

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13 Fredrick J. Bissinger, Regional Managing Member of the Nashville office, presented “2018 EEOC Update.” 14 “Employee Handbooks: Is Your the Last Smartphone?” was Andrew J. Hebar’s topic. 15 Mary C. Moffat discussed “Records Retention in the 21st Century.”

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16 G. Gerard Jabaley, Regional Managing Member of the Knoxville office, presented “Cultivating Connections in a Divided Culture.” 17 Howard B. Jackson discussed “ADA-Reasonable and Realistic Accommodations and Return to Work Issues,” along with Kelly A. Campbell, Regional Managing Member of the Morristown office (not pictured;) and Ann E. Sartwell (not pictured.) www.HRProfessionalsMagazine.com

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7 Smart 2019 Background Screening Resolutions HR Should Make NOW

By JULIE HENDERSON

With record low unemployment, finding, recruiting, and keeping high performing employees in your organization will be more challenging in 2019 than in the recent past.

Even so, it’s entirely possible to be productive and successful in your hiring endeavors. It just takes planning and commitment.

Here are 7 smart resolutions relating to background screenings that are essential for HR to consider in 2019 and beyond. #1: I won’t cut corners.

When’s the last time you’ve reviewed your background check process? Instant criminal database searches offer advantages; but, they should not be used by themselves as the only background screening tool. Doing so can cause you to miss convictions that may be essential in making the best hiring decision!

A database search is only a small piece of information and might miss other convictions 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.

And, trust us, nothing will give you the New Year’s blues like a hiring lawsuit.

Resolve to: Thoroughly screen your job candidates by ordering the proper county, state, and national database searches, as well as other verifications of employment and education. #2: I will be fair and relevant.

While you need to order more than a database search, don’t go overboard in running every background check available on every potential hire. Hold your horses for a minute and think about the specific position you’re trying to fill.

Recent EEOC guidance advises the screening must be fair and relevant to the position. For example, you don't really need to pull a credit report for a stockroom clerk, but you probably need one if you are hiring a stockbroker.

Resolve to: Practice fair hiring and craft your screening process by giving thought to what each position entails. #3: I will choose the right background-screening vendor.

Do you expect a guy at the flea market to sell you a high-quality diamond? NO? Then please don't expect a fly-by-night cheapo 18

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background-screening provider to return accurate information. The stakes are too high to trust just anyone to investigate your job applicants. Missing a single dangerous conviction or failing to catch one fake degree can subject your company to costly litigation, expensive client loss, and cause serious damage to your brand.

Resolve to: Partner with a reputable, NAPBScertified background screening vendor that’s experienced, and who does not offshore your data. Ask them to outline the measures they take to ensure the information they return is accurate. They should be able to succinctly walk you through specific processes that maximize the accuracy of the information you receive from them. #4: I will educate myself on my state's laws.

Take some time to review the legislation in your state regarding hiring. Certain states have recently passed laws regarding issues such as "Ban the Box” and using credit reports in hiring decisions.

Resolve to: Make sure you, your hiring managers, and everyone else involved in the hiring process understand the requirements of the state you are based in, as well as any additional states where you conduct hiring. #5: I will acknowledge that “gig economy” employees need to be screened, too.

Part-time, contract, and temporary employees pose just as much risk to a company as full-time, permanent staff. Even so, sometimes these workers slip through the cracks without being subjected to a single background check.

Resolve to: Perform a thorough background check on each person before you extend an offer of employment. This practice helps ensure they are qualified and present minimal risk to the safety of your other employees, your customers, and your reputation. At the minimum, depending on the position being sought, look at criminal history and the sex offender’s registry. Additional background screening reports that help to find the best candidates are employment history verifications, assessment testing, and drug screening.

#6: I will keep an eye on compliance.

Proper compliance continues to be important in 2019. Employment lawsuits will likely continue to be prevalent, and employers must cover themselves with compliant processes that will hold up in court.

Resolve to: Make certain every single applicant signs an authorization agreeing to be the subject of a background check before you check into their histories. If you decide in whole or part not to hire a person based on what you uncover in your report, follow the adverse action protocol laid out by the Fair Credit Reporting Act (FCRA). Vigilantly pursue stringent and consistent compliance. #7: I will be a cheerleader for proper hiring standards.

No, you don’t have to put on a skirt and shake pom poms, but you do need to take action so your hiring managers make compliant, thorough, and relevant hiring a priority. Just one errant person failing to follow the rules can careen your background screening process off the rails into a ditch.

Resolve to: Offer ongoing education to every employee involved in the hiring process and be available to answer their questions. Make certain they understand the importance of following the company's outlined best practices.

2019 promises to be a highly competitive environment for companies trying to hire A-players. Stay in front of the other companies vying for this talent by getting your hiring process, and your background screening procedures, updated and ready to handle what job seekers throw at you. By committing to excellence now, your company is sure to be successful and profitable in the New Year, and beyond!

Julie Henderson, Director of Sales Background Screening Division Data Facts, Inc. jhenderson@datafacts.com www.datafacts.com

Do Your Company Policies and Procedures Violate the ADA Rules Governing Disability Related Inquiries and Medical Examinations?

Nonetheless, when an applicant has an obvious disability or voluntarily discloses that he or she has a disability, the interviewer can ask if a reasonable accommodation would be needed for the applicant to perform the essential functions of the job. If the applicant denies needing an accommodation, the company cannot ask additional questions about the disability at this stage. However, where this reasonable belief exists, the company can ask the applicant how he or she would perform the job, even if it does not ask this same question of all applicants.

By FRANK L. DAY JR.

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ongress adopted the Americans with Disabilities Act ("ADA") to encourage the removal of physical barriers that prevent disabled persons from entering the workforce and as a response to the attitudes and prejudice that impacted even highly qualified employees with disabilities. To combat the attitudes and prejudice, the ADA limits when employers can request information that could reveal the existence of a disability. This article discusses legal standards and provides guidance about when employers can seek disability related information and/or require employees to submit to examinations.

The ADA establishes different sets of rules to govern when such inquiries are permissible.

These stages are as follows: (1) before an offer of employment is made; (2) after a conditional offer of employment is made; and (3) during the employment relationship. These rules determine when companies can require “medical examinations” or engage in “disability related inquiries.” The law defines these terms as follows: A “medical examination” is a procedure or test that seeks information about an individual’s physical or mental impairments or health. EEOC guidance considers the following factors when evaluating a test: whether it (1) is administered by a health care professional; (2) is interpreted by a health care professional; (3) is designed to reveal an impairment of physical or mental health; (4) is invasive; (5) measures an employee’s performance of a task or measures his/her physiological responses to performing the task; (6) normally is given in a medical setting; and (7) requires the use of medical equipment.

A “disability related inquiry” is a question or series of questions that is likely to elicit information about a disability.

1 Before an Offer of Employment is Made

Under the ADA, companies cannot require medical examinations or make disability-related inquiries during the initial stages of the hiring process before extending a conditional offer of employment. Examples of impermissible questions include asking about past workers’ compensation claims or how many sick days the applicant took in the prior year. Companies may ask applicants about their ability to perform the essential and marginal duties of the position, but may not specifically ask applicants if they have any conditions that would interfere with their ability to do the job.

Likewise, the ADA prohibits companies from requiring applicants to take a medical examination. Examples of medical examinations include vision tests, any tests intended to confirm alcohol usage, blood pressure screening, range of motion testing, or tests to measure muscle strength. This is a non-exclusive list, and whether a given test is a medical examination depends on the facts and circumstances and whether it implicates any of the seven factors listed in the “medical examination” definition. It is not always easy to distinguish a procedure or ability test from a medical examination. Employers should consult with counsel if they require pre-offer tests that could potentially qualify as a medical examination based on the factors.

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2 After Making A Conditional Offer of Employment

After an employer extends a conditional offer of employment to an applicant, it is permissible for the company to require all such persons to submit to medical examinations. Employers can require medical examinations without fear of violating the ADA after a conditional offer is made so long as all persons in the same job category must follow the same procedure, the results are kept confidential, and the examinations are not used to discriminate on the basis of disability.

Although medical exams are permitted after a conditional offer has been made, a company cannot withdraw an offer based upon the results of the inquiry or exam unless doing so is job-related and consistent with business necessity. Hence, when revoking an offer based on test results, an employer must show the testing criteria used accurately measured the applicant’s ability to perform the job.

Before excluding the applicants, the employer must also be able to show that he or she was unable to perform the essential functions of the job with a reasonable accommodation.

3 Current Employees

Under the ADA, employers cannot require current employees to provide disability-related information or require medical examinations except where job-related and consistent with business necessity.

This standard is met only where an employer has “a reasonable belief, based on objective evidence, that (1) an employee’s ability to perform the essential job functions will be impaired by a medical condition; or (2) an employee will pose a direct threat due to a medical condition.”

When an employee seeks an accommodation for a disability that is not obvious, employers can require the employee to provide information from a health care provider to verify the existence of a disability and to seek guidance on what reasonable accommodations may enable the employee to perform the essential functions of the job. Employers cannot

require an employee to go see a company doctor to verify the disability unless the employee repeatedly fails to provide complete information from his or her own health care provider.

When an employee provides incomplete medical documentation to substantiate the disability, employers must specifically inform the employee of the deficiency and give the employee an opportunity to secure the missing information from his or her health care provider. If the employee does not address the deficiency by providing supplemental information from his or her doctor within a reasonable period of time, it can become permissible for employers to require the employee to see a company doctor.

Safety policies that require employees to disclose prescription medications that may cause impairment can also violate the ADA. As a general rule, it is illegal to require all employees to disclose the medications they are taking. Furthermore, work rules that require employees to disclose all medications that may cause impairment can also violate the ADA. Some employers find it better to avoid requiring employees to disclose specific medications and instead only require employees to inform human resources if they believe their abilities will be impaired.

This approach limits the employer’s potential exposure for engaging in a disability related inquiry. Nonetheless, it is a best practice to have any such rules evaluated by employment counsel as many claims are filed based on the application of such work rules.

The ADA can also become an issue when an employee returns to work after a period of extended health related leave. The facts and circumstances existing at the time may reasonably suggest the employee’s present ability to perform the job will be impaired by his or her condition. It is permissible to require the employee to provide a fitness for duty report from a health care provider under such circumstances. When an employee provides a doctor’s note certifying that he or she is capable of returning to work at full duty, employers should consult with counsel before requiring the employee to provide additional information.

Nonetheless, the ADA does not prohibit employers from requiring physical agility tests that evaluate whether the employee can perform essential job duties such as lifting, carrying, etc. These tests are permissible because they do not qualify as medical examinations.

Nonetheless, whether the test qualifies as an agility test or a medical examination often can be hard to determine. A test is more likely to be considered an agility test if it measures only the employee’s ability to perform the job functions and not the employee’s physiological response to the testing.

A test that primarily measures how an employee’s body responds to the work-related activity is more likely to be a medical examination and not permissible unless job-related.

Conclusion The ADA is a complicated law that imposes varying restrictions and requirements for disability-related inquiries and medical examinations depending on the facts and circumstances. Although compliance can be difficult, the best way to avoid costly litigation is to train decision makers on the ADA’s framework and ensure all company policies and procedures regarding safety, drug testing, leave, and return to work are ADA compliant.

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

A TRADITION OF

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

THINKING FORWARD

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

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2019: Pay Me (Too) Now!

By BLAIR and BRUCE JOHANSON

Over the past few years, there has been a lot of good pressure regarding pay equity in the workplace. Though the recent #MeToo main emphasis has been the increased exposure of sexual harassment in the work sites around the county, it has also reenergized the pay gap between men and women. This pay gap will be addressed later in this article, but there is finally a recognizable increase in wages around the U.S. and 2019 average increase in wage budgets is projected to be around 3.2%. Wage increases tend to lag the economy and we have had a couple of solid performing years, thus organizations have been using some of their cash reserves to invest in their infrastructure including capital and human improvements. The economy recovery started in the mid-2009 (however slow going until 2016) and the average annual wage increase for private employees for the last eight years has averaged 2.8% as mentioned in an Economic Policy Institute October, 2018 report. However, the 3.2% is a notable event as wages have been fairly stagnant for several years.

There are some other recent developments that have occurred which will create additional pressure by companies to increase their starting wages. These include: 1. Walmart increased their starting wage in their stores to $11.00 back in January, 2018. Target has committed to increase their starting wage to $15.00 by 2020.

2. Big financial and insurance companies like Wells Fargo, J.P. Morgan and Aetna increased their starting wage to $16.00/$16.50 back in 2015/2016.

3. Amazon increased their starting wage to $15.00 this past month.

4. There are more organizations researching the living wage structure for the minimum pay level jobs. This website provides living wage structure in 13 different living units categories from one adult to two adults and three children by state and then by county. The organization mentioned that the average living wage jumped between 4 to 6% in 2017. http://livingwage.mit.edu/ 5. Many states are passing minimum wage laws that will drive up starting wages. For example, Arkansas’ new minimum will be $9.25 per hour starting January 1, 2019, then $10.00 per hour in January 1, 2020 and $11.00 per hour in January 1, 2021. For Missouri, their current minimum of $7.85 per hour will be raised to $8.60 per hour January 1, 2019, then increase by $0.85 per hour each following January until 2023 when it will be $12.00 per hour.

Gender Gap Based on a variety of articles, there is still about a 20% gender gap between male and female pay levels. Annie Nova wrote an article titled “Make the #MeToo moment your chance for a raise” in February,

“…2019 average increase in wage budgets is projected to be around 3.2%.”

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2018. She mentioned, “As the conversation about sexual harassment gets louder, women are also bringing up the pay gap to their bosses, according to experts.” The rest of Annie’s article provides advice on how a female can navigate her way to a salary increase in the #MeToo Moment. Her two main steps are “Push for your value to be seen” and “Prepare to ask.”

Given our work with numerous clients from all types of industries over the past 30 plus years, there is a genuine desire and commitment to eliminate any justified pay equity issues and there is also an effort to ensure employees are paid a competitive salary or higher based on performance and time in the position. The Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) are making every effort to find organizations that are intentionally discriminating regarding pay from a gender, ethnic background, age, disability, etc. basis and the back pay, penalties, and fines are significant.

Since 1985, our firm has offered its own copyrighted 15-factor job valuing/rating system. This system evaluates a job against various factors including general experience, management experience, education, machine operations, revenue and/or expense savings generation, etc. and ends up with a point value for a position. An overall point total is established for each position and the base salary for all the employees in each position to calculate an internal pay line or regression line. This allows an organization to use an objective and defensible approach to determine if it has any internal pay equity issues as well as being able to classify positions in similar or dissimilar situated groupings of position titles. We have been able to assist our clients to identify and set in motion steps to correct any pay equity problems.

Millennials and forward Generations Pay/Benefits Randy Barrett published a thought-provoking article for Employee Benefit News last year titled, “Why the most innovated employers are rethinking total compensation.” Randy said that the millennials are the drivers for this change and the employers are responding. Beyond a competitive base salary, Randy mentioned that the millennials want work/life balance and a socially conscious corporate culture. Below are two key paragraphs from his article.

“Leading innovators, including Akamai, Rackspace, Southwest Airlines and Vivint, are focusing on “quality of life” perks and other benefits that our grandfathers wouldn’t have dreamed of — or thought possible. They include daycare assistance, adoption and fertility funding, onsite medical scans, ID-theft services and enhanced options for working remotely.”

“Benefits, or what we refer to as WorkPerks at Southwest, are a big driver when it comes to attracting, retaining and engaging [employees],” says Julie Weber, VP of people at Southwest Airlines. She adds that the company “doesn’t just focus on traditional benefits like wellness, healthcare and retirement.” “For the airline, that means a positive work culture, career development and generous travel privileges.“ Millennials and later generations are likely to jump ship if they don’t see the above perks as well as career advancement opportunities, challenging work, an open and genuine relationship with supervisor/ manager, learning new skills opportunities and performance-based retention compensation.

One of the best retention compensation tools for millennials that we have seen is having a performance-based year-end non-contributory retirement supplement amount (roughly 10% to 15% of base salary) that has a vesting requirement of at least five years that causes high performers to stick around and get past the itch to move tendency.

Another trend we are seeing for millennials is some employers are paying for additional college degrees and/or professional licenses/ certifications including MBAs, Project Management Professional (PMP) certification, CPA license, etc.

Baby Boomer Pay/Benefits With life expectancy being into the mid to late 80’s, many of the baby boomers (BBs) are still working past 65 and this trend will continue for at least the next decade. BBs are looking for ways that they can continue to work to around age 70 to maximize their social security dollars, hold onto good health benefits through their employers until they retire, and take more time off with less pay to be in a semi-retired status so they can spend time with the grandchildren.

BBs can be great mentors to the Gen Xers, Gen Yers (Millennials) and the Gen Zers, the newest workforce members. Most of the BBs are well educated, trained and started working in the mid-60s. They tend to have a balanced outlook on life, worked hard for many years with a few employers and can assist with filling in any non-technical skills gaps that the younger generations haven’t mastered or been exposed to up to now.

Given the pay gap between seasoned BBs and new employees entering the workforce, employers are being creative with easing out the BBs and avoiding any age discrimination issues as well as being able to transfer any intellectual knowledge to new employees. Having a well thought-out succession plan creates a win-win for both the employer and the BBs.

Fixed Pay vs. Variable Pay The younger generations are open for variable pay as long as the base salary is reasonable and the performance factors tied to the variable or incentive pay are challenging, but achievable. We have worked with several clients over the past few years implementing incentive compensation plans for salaried and hourly positions using a threshold to target maximum pay out with three to six performance-based targets and bonuses starting at 5% of base salary for hourly positions to as high as 50% of base salary for C-Suite positions. New or revised targets are established at the beginning of each calendar or fiscal year and bonuses can be paid in cash or stocks.

Variable pay allows an organization to use more at-risk dollars and lowers the amount of fixed pay dollars from a cash flow standpoint.

Key Employee Retention As more of the BBs are retiring, there is a need to retain key employees that will be the new leaders to take the organization forward over the next 10 to 20 years. To ensure key employees will stay, many companies are offering deferred compensation plans, split dollar insurance and/or restrictive stock grants to lock in the future leaders. These forms of long-term compensation place funds in accounts that would leave a significant amount of dollars that would be forfeited if a key employee leaves for another position.

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

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

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

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

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ARTIFICIAL INTELLIGENCE Driving Company Culture Through Smart Workforce Culture Assessments Workforce Intelligence Will Change The Way Companies Define and Build Their Culture

BY DENNIS W. KOERNER, PH.D.

Introduction Company culture, especially in a blue collar workforce, can make or break a business.

Culture is incredibly important because it sets the tone for everything from how employees behave to how well they perform their job. A strong culture can bring benefits such as business focus, efficiency and improved performance along with employee engagement and satisfaction.

organization model is used to identify key workforce insights that can be used to define your workforce culture needs. Building the model consists of three steps: 1. Measure the Job 2. Benchmark Current Employees 3. Create the AI Insights Model Step 1 – The first step is to understand what employee success looks like in your company. This is accomplished by gathering data on key performance metrics related to a specific job. So, for example a sales manager might look at the number of unit sales per month while a transportation company would be interested in miles driven and safety record. Each company will have its own performance metrics uniquely related to its workforce performance.

Step 2 – Step two gives a combination of tests and or assessments to a sample of the workforce population. Subject areas covered vary depending on the job but may include attributes such as behavior, motivators, thinking styles and job skills.

Step 3 – Once data is collected, both the key performance metrics and benchmark attributes are related through AI methods. The power of AI is its ability to find key patterns in large amounts of data. AI can tell us what employee attributes and needs contribute to performance and job satisfaction and which ones detract.

The Results So how do you know what is the most effective culture? Numerous articles have been written on the steps to take in developing a winning corporate culture.

Most companies emphasize major aspirations related to people and values. Classic examples of non-descript culture statements are: • Deliver WOW through Service • Do more with less • Have fun and so on The purpose of this article is to demonstrate a methodology for defining and implementing a data based culture that provides specific and actionable guidance.

Needs Analysis: Identify Your Workforce Culture Needs The first step to defining a culture is to build an AI based organization insight model. The 24

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In the example below, a model was developed and used to predict the tenure and attendance points for employees of a manufacturing firm. Results of the study identified that three key attributes that were important for success: 1. Steadiness – the more successful employees liked consistency in their job and schedules. They do not like changes or surprises.

2. Rule Following – high performance employees follow the rules. They value tradition, order and proven methods.

3. Attention to Detail – Factory workers need to be detail oriented perfectionists.

They understand how and why things work.

AI Model Application Once the model is built it can now be used to define the culture. In our example of a

factory workforce, elements of our culture might be expressed as follows: • Steadiness - We are considerate of the employee’s personal time demands.

• Detail - We invest in and develop a highly trained, expert workforce.

• Rules - We provide clear and easy to follow rules.

Workforce Culture Assessment The next step in the process is to define how you want to measure the effectiveness of your culture. These are measures that can relate feedback from employees as to how they are being treated to achieve maximum performance. In the case of our manufacturing example, effectiveness of the workforce culture was measured by two survey questions that focused on Tenure and Productivity: 1. I see myself working for this company in two years’ time.

2. I am motivated to contribute more than what is expected of me.

Each of these questions was rated on a 5-point scale ranging from strongly disagree to strongly agree.

Subsequent questions and ratings were then made across a number of attributes directly related to job satisfaction and tenure.

Workforce Culture Assessment Results Results of the workforce culture assessments are remarkable to say the least. In this particular study, we were able to identify that most all employees were satisfied with their job, were highly motivated to contribute and did not anticipate leaving the company.

Even though the overall results were good, the study found significant room for improvement. For example, in developing a “Follow The Rules” culture, the rules were clear but the training and support to understand them was not.

• Management showing appreciation for extra effort.

The implication, more emphasis on developing a training oriented culture is needed.

Actionable Insights While each assessment section provides culture development insights and specific direction, the real power comes from relating the culture assessment scores back to Tenure and Productivity goals.

For example, factors most closely related to the likelihood of leaving were: • Understanding of the employee’s time needs.

• Management being helpful when a problem occurs.

Looking at related attributes, these factors were especially critical for employees with tenure less than 2 years.

Conclusion AI is a powerful new tool that can relate employee attributes to key performance metrics. It can also then measure management practices and behaviors against employee workplace needs for maximum performance.

The end result is the development of a culture that benefits both the employee and the company.

About the Author Dennis W. Koerner, Ph.D. is President and CEO of ITN, LLC. ITN provides statistical services that create competitive advantages through better hiring and retention program practices. This is accomplished with the use of artificial intelligence programs that relate employee attribute data to organization performance metrics. Dr. Koerner is a strategic partner with HRO Partners and works with us to provide the state of the art technology solutions to improve processes such as hiring, company culture, and performance management. To learn more about how you can implement an AI model to drive company culture, please contact HRO Partners at 1-866-822-0123. hro-partners.com company/hro-partners

hropartners @hropartners

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Employer Value

Reducing Health Care Costs with ReferencedBased Pricing

By LOUIE STEIGELMAN

H

ealth care costs continue to rise, which means employers need to take every opportunity to lower expenses. One strategy is to employ referencedbased pricing (RBP). RBP enables employers to set limits on certain medical services, shifting the cost-analysis burden onto employees.

RBP works by setting spending limits on certain procedures or services—meaning an individual would only be covered up to the established limit for these services and would have to pay the cost difference out of pocket. However, limits should only be set on “shoppable” services. These are services where an individual can take time to make a decision based on price and quality, like for prescriptions, lab tests or joint replacements. In all of these examples, there are lower-cost options that are typically the same quality as the more expensive alternatives.

Employers typically work with a third-party vendor to establish the reference price for a procedure. The vendor will help conduct market research and negotiate the most appropriate deals with providers. Finding a reliable vendor that works well with your company is crucial for negotiating the best prices for your employees.

RBP is most effective when applied to procedures with fluctuating costs. For instance, colonoscopies may range from $400 to $6,000, depending on the physician. In this case, an employer using RBP might set the spending limit to the median price of the procedure, based on market findings. If an employee uses a health facility that charges above the spending limit for a specific procedure, he or she will need to cover the difference out of pocket.

One complicating factor is the maximum out of pocked (MOOP) limitations under the Affordable Care Act (ACA). Out of network charges, however, do not count against the ACA MOOP limitation. So how do you ensure that if an employee has services at a provider that does not accept the reference price that the balance bill is treated as an out of network claim that does not go toward the MOOP limitation? The Regulators have made it clear that in order to not count the balance bill toward the MOOP limitation a plan must have a method of ensuring plan participants have adequate access to quality providers who will accept the reference based price.

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Employers who use RBP have the potential for two main benefits: lower total health care expenses and higher employee engagement in health care decisions.

Health coverage usually extends to any in-network procedure, regardless of cost. With RBP, employers do not risk paying exorbitant prices for services that could be done more inexpensively. By setting a limit on certain procedures, employers are empowering employees to take charge of their health care decisions.

Having established limits on specific services means employees must consider cost, in addition to quality, when choosing where to have a procedure. This requires research on the employee’s part, encouraging active participation in his or her health care. It is estimated that low health literacy costs the United States $106 billion to $238 billion annually. By promoting employee engagement in health care decision-making, you are helping to educate employees, while lowering overall health costs.

Potential Cons There are a number of considerations to make when implementing RBP, given the complexity of the model. It is paramount you work with a vendor who is reliable and experienced in the RBP process. The vendor must be able to ensure a smooth transition into this model, otherwise you risk disrupting highly utilized providers. If you choose a vendor who is inexperienced, your RBP limits might be too low for the services your employees need, making the plans unaffordable. You will also want discuss with your vendor its strategies to deal with employee balance billing. This could include employee education, provider outreach/negotiation, patient/employee advocacy services and even, in some cases, access to legal representation for the employee. Not using a vendor with a set strategy to deal with balance billing could lead to wide spread employee dissatisfaction with the RBP strategy.

Conclusion RBP is an innovative strategy for lowering health care costs.

As the market continues to evolve, employers are tasked with developing creative strategies for saving money. The RBP model is unique in its ability to reduce costs while simultaneously promoting employee health literacy.

Louie Steigelman, Group Health Senior Underwriter McGriff Insurance Services Louie.Steigelman@McGriffInsurance.com www.McGriffInsuranceServices.com

Looking for Looking for innovative innovative ways to control ways to control employee employee benefitscosts? costs? benefits Lookno nofurther. further.

Look McGriff Insurance Services specializes in providing innovative employee benefits solutions McGriff Insurance Services specializes in providing innovative employee benefits solutions that help control costs, drive employee engagement and allow HR more time for strategic that help To control costs, employeea engagement and HR more initiatives. learn how wedrive can customize benefits program forallow your needs, visittime for strategic initiatives. To learn how we1-877-682-8510. can customize a benefits program for your needs, visit McGriffInsurance.com or call

McGriffInsurance.com or call 1-877-682-8510.

Š 2018, McGriff Insurance Services, Inc. All rights reserved.

How Employers Can Drive Safer Hospital Care

By CRISTIE UPSHAW TRAVIS

the systems and practices known to prevent them. Grades are updated every six months. The Hospital Safety Grade website ( http://www.hospitalsafetygrade.org) is free to everyone and easily searchable, and it offers maps and other tools so employees can quickly see the range of grades in their area. For interested employees, they can drill down into the data to see how measures were calculated and how the hospital performed relative to the national average on each measure.

Curious about what grades the Memphis-area hospitals earned? You can learn more about how they earned these grades at HospitalSafetyGrade.org (http://www.hospitalsafetygrade.org)

Did you now that in the time it takes you to read this article, at least five people in the United States will die from a preventable medical error or infection in a hospital? Hospital errors and infections are the third leading cause of death in America.

Millions more Americans suffer harm or disability.

Employers and other purchasers pay dearly for this problem.

First, you pay in the lives and health of your employees and families. And then you pay in dollars. The Leapfrog Group, a purchaser-driven national nonprofit pushing for a more transparent and competitive health care market, estimates purchasers pay an average of $8,000 per hospital admission for these errors and infections. That is likely a low estimate. One study in 2013 found that purchasers paid $39,000 worth of excess claims for every surgical site infection. That doesn’t even count the dollars lost on productivity and disability.

The good news is that thanks in large part to the leadership of purchasers working through the Memphis Business Group on Health, the Regional Leader for the Leapfrog Group in West Tennessee and North Mississippi, and other coalitions across the US, today employers have many more resources and strategies to combat this problem. Here are four strategies you can deploy today. Almost all of these strategies are available at no cost. Here’s how to embark on your journey to protect your employees and their families.

Understand your ROI. Claims data rarely contains highlighted messages about mistakes and infections that inflate cost. A medication error might result in an unusually long length of stay or an odd set of treatments. Ask your plan or data warehouse to pull data on your payments related to errors and infections that are directly coded. But since not all mistakes are directly coded you will only see a subset of the problem. Still, it’s important to make it clear to your plan that you want insight into these issues affecting the well being of your employees and the bottom line of your company.

Use the Leapfrog Lives and Dollars Lost Calculator ( http:// www.leapfroggroup.org/employers-purchasers/lives-dollarslost-calculator) to estimate the hidden mistakes and costs and your wasted dollars and lost lives. The calculator also helps you understand how to reduce these costs.

Understanding your own data will point out the value of safer hospitals. It will galvanize your efforts to protect employees as a bottom line endeavor, and give you baseline data to track your progress over time.

Educate your employees about safety. The Leapfrog Group issues the Leapfrog Hospital Safety Grade, letter grades rating the safety of every general hospital in the country for which they have adequate publicly available data. Each A, B, C, D, and F is comprised of 28 measures of errors, infections, and injuries, as well as measures of whether hospitals have in place 28

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In addition to allowing employees to compare among hospitals, the Leapfrog website offers your employees tips and advice on protecting themselves in the hospital. This includes advice like ensuring doctors and nurses wash their hands when entering the room and bringing an advocate with you to monitor your treatment.

You can also access a wealth of free materials to educate employees, including: • Internal social media platforms: If you company uses social media or enterprise networks to connect with employees, consider integrating these short posts to spread the word about patient safety and the Leapfrog Hospital Safety Grade.

• Template Email from Your Company’s CEO—or you. Personalize this template email to tell your employees all about the Grade and its importance.

• PowerPoint Presentation: This is good for lunch-and-learn sessions, wellness fairs, or other opportunities to give employees information on protecting themselves and their families in a hospital stay.

• Customizable Brochures and Posters on Staying Safe: These are tools to start a conversation about patient safety throughout your organization.

All of this is available in Leapfrog’s purchaser toolkit, a free download (http://www. leapfroggroup.org/employers-purchasers/value-tools.)

Apply leverage. Given the significant investment you make in your employee’s health and well-being, and the inexcusable wasted lives and dollars you are shouldering, it is reasonable that purchasers would look closely at how their spending strategy can demand improvements by tying at least some of your payments to safety. Here are some ways to use your purchasing strategies as levers for change: • Require your health plan or TPA to include a hospital’s safety performance in their contract negotiations. Hospital care is never high quality or high value if the patient is unsafe, so make sure the Hospital Safety Grade or some other metric of errors and infections is a bedrock element of any negotiation.

• Tie hospital safety to new payment models, including bundled payments, narrow networks, and centers of excellence. These models offer great promise for delivering the right care at the right price, but risk failure if the patient is harmed.

• Steer employees toward higher-value care. Copays and deductibles calibrated to favor safer hospitals not only protect employees and their families, but also incentivize hospitals to put a higher priority on improving safety.

Join with other purchasers. Until purchasers joined together to insist on more transparency and measurement of patient safety problems, Americans had little if

any information to compare among hospitals. Even hospitals themselves could not effectively measure their own problems with safety compared with other similar hospitals.

patient. MBGH looks forward to seeing these improved grades sustained over time. We will then be confident that the improvements are foundational and long lasting.

When purchasers come together, they can drive change, not just in individual hospitals, but across the entire market, which results in your employees and their families having many choices that provide safe care!

Here are some insights on the greater-Memphis market.

Historically, many hospitals assumed errors and infections that hurt or killed patients were just the cost of doing business. However, that cost wasn’t paid by the hospital itself; the cost has been paid by patients who suffer, and by employers who pay an enormous premium. These are dollars that don’t go toward creating new jobs or enhancing other benefits or growing salaries.

But over the past two decades in particular, purchasers joined together at the regional level through business coalitions, such as the Memphis Business Group on Health, and the national level through Leapfrog, the National Alliance of Healthcare Purchasing Coalitions, the National Quality Forum, and many others, to measure these problems and insist on public reporting. We learned that excellence is possible; that hospitals can get an “A”.

In this round of the Hospital Safety Grade, the percentage of Memphis hospitals with an “A” and “B” increased from 20% to 45%. Memphis is now much closer to the national benchmark of 56% of the hospitals receiving an “A” or a “B”. However, our market still has work ahead of us to reach benchmark and, as we would all want and Memphians deserve, surpass it and become a national leader in safety. Safety is not a one-anddone; it results from a culture that insists on safety every day for every

But fundamentally, health care remains profoundly local. It is your community, your business, your family, your own body. When purchasers join together at the local level to improve the health care market, they can see significant change, and it’s that level of local change that sparked national movements that we now benefit from. So I encourage you to join your local business coalition on health, and take advantage of the transformative resources those purchasers like you have created together. You can save lives immediately, in your company and in your country.

Cristie Upshaw Travis, CEO Memphis Business Group on Health ctravis@memphisbusinessgroup.org www.memphisbusinessgroup.org

Is your Health Plan using Leapfrog to save Lives and Dollars?

Administered on behalf of employers and other purchasers, the Leapfrog Hospital Safety Grade is the nation’s only rating system focused entirely on errors, accidents, injuries and infections: the 3rd leading cause of death in America. Hidden in employer claims are millions of dollars to pay for these errors. The Leapfrog Hospital Safety Grade is used by dozens of national and regional health plans as well as transparency-focused organizations to educate their people on the importance of choosing a safer hospital. How is your health plan using Leapfrog?

The Leapfrog Hospital Safety Grades assign “A,” “B,” “C,” “D” and “F” letter grades to more than 2,600 general acute-care hospitals in the United States.

To learn more, visit us at leapfroggroup.org/data-users or contact us at info@leapfroggroup.org. www.HRProfessionalsMagazine.com

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Trump Seeks to

Ease Rules for Multiple-Employer Retirement Plans and Required Mandatory Withdrawals

By CATHERINE NORTON

…roughly 89% of larger employers offered retirement plans compared to only 53% of small employers…

On

August 31, 2018, President Trump signed an executive order authorizing the U.S. Department of Labor (DOL) and the U.S. Department of the Treasury to evaluate expanding access to 401(k) retirement plans. The order is designed to cut some of the administrative burdens and costs that prevent smaller employers from offering 401(k) plans to their employees. The Trump administration noted that in 2017, roughly 89 percent of larger employers offered retirement plans compared to only 53 percent of small employers (those with fewer than 100 employees).

The executive order directs the agencies to consider two main issues: 1. Expanding the criteria for multiple-employer plans (MEPs), under which employees of different private-sector employers may participate in a single retirement plan; and 2. Raising the age when individuals with traditional Individual Retirement Accounts (IRAs) and 401(k)s must start making required minimum distributions, which is currently age 70 ½.

Multiple-Employer Retirement Plans President Trump has given the DOL six months to look for ways to expand access to workplace retirement plans for part-time workers, sole proprietors, and other entrepre30

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neurial workers with non-traditional employer-employee relationships. One such way is by setting up MEPs, also called Association Retirement Plans (ARPs), in which multiple unrelated employers participate in the same retirement plan.

These types of plans help to reduce costs and make it easier for businesses, especially small businesses, to manage burdensome regulations. Currently, MEPs are limited to companies that share common characteristics, such as operating in the same industry. Under the executive order, however, the DOL will look at expanding the criteria for MEPs so that more companies can participate.

In the executive order, President Trump has given the Treasury Department six months to consider delaying the start of minimum distributions to accommodate longer life spans, possibly to age 75. Adjusting these tables could allow account holders to take lower required minimum distributions, thereby keeping more money in their 401(k) plans and IRAs for longer periods.

Changes to the Required Minimum Distribution Rules

The Trump administration would like this process to be completed within a six-month time frame, with a final rule being released sometime in 2019.

Among the regulations that the Treasury Department will review are those governing minimum distributions that retirees must take from their 401(k)s or traditional IRAs. Presently, retirees must begin taking withdrawals at age 70 ½, or else face as much as a 50 percent penalty plus any taxes due. The required minimum distributions are based on life expectancy tables issued by the Internal Revenue Service (IRS). The IRS life expectancy tables have not been updated since April 2002, when the average life expectancy was 77 years. Now, the average life expectancy is about 78 ½ years.

Bass, Berry & Sims Memphis Office catherine.norton@bassberry.com www.bassberry.com

Catherine Norton, Associate

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

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

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

Centered to deliver. bassberry.com

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31

What Millennials Should Know about

Open Enrollment

By JEFF BAKKE

Intro:

Studies show that Americans typically spend more time considering what television to buy than they do deciding on what healthcare insurance plan to choose. But consider this: In the U.S., annual healthcare expenses average more than $10,000 per person. That takes into account premiums paid by employers and the percentage paid by the employee, plus out-of-pocket expenses that crop up—from copays to out-of-network provider fees to expenses that just aren’t covered (such as vision or dental care). For millennials—who a recent study showed spend less than an hour choosing their health insurance—the time to get educated on what to look for and think about is now … before the need is critical.

1. Do your homework. No one said it would be easy—but wouldn’t you rather put in the time and work now to do some research on what coverage is best than pay the price down the line? Millennials are good at checking what the costs of something are when they need it—a 2017 study shows that they are more likely than GenXers and Baby Boomers to seek out information on healthcare costs and check whether their plan covers certain procedures—but at open enrollment time, it’s important to think about the bigger picture, too.

2. More homework: Do the math. Many employers offer choices of different health plan options. Usually lower-cost health plans come with higher deductibles or a more limited network—make sure you are taking all of that into consideration when you’re making your choice. In other words, don’t just pick the cheapest policy, without understanding it. If your deductible is higher, what will that mean for your bank account for the year? There are many online calculators that can be good resources (but don’t forget the efficiency of a good, old-fashioned spreadsheet).

3. Look at all your options. If you’re under 26 and can be covered on your parents’ insurance, that is likely to be the best option. In terms of cost savings, certainly, and it often also provides better coverage than you may be able to get through your employer, or—if you’re not working—on the public exchange. However, don’t assume anything: Have a conversation with your parents to ensure that their health insurance coverage is a good fit for your needs. Compare the coverage plans offered by your employer with what you get by staying on your parents’ policy.

4. Think beyond the screen. Researching online is good, but you can—and should— look at other ways to get information you need. As mentioned in the previous point, speak with your parents about their coverage and if you can and should remain on their policy. Even if you’re not on it, your parents can still be a valuable resource.

What have they found to be the best health insurance? What tips can they share on issues that have arisen? Talk to your peers, too, on what their experience with health 32

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insurance is—have they had to choose coverage during the open enrollment period? It can help you learn from what they’ve done right—and avoid mistakes they’ve made.

5. Don’t burn through the money you’re saving. If you do choose one of the lower-cost options—especially high-deductible policies with lower premiums—don’t think that it will leave you money to burn. Putting money aside starting now in a health savings account (HSA) (or other tax-advantaged account) is one of the smartest things you can do. It’s not a matter of if you’ll need money to pay for out-of-pocket healthcare expenses, it’s a matter of when. The sooner you start saving for this eventuality, the better off you’ll be. And keep in mind that one of the other key benefits of an HSA is that the money stays with you. Once you deposit money into your HSA, it’s yours and can go with you wherever you go, even if you change employers.

6. Think about your life stage. If you’re single, your health insurance needs are usually pretty straightforward. If you’re married or planning to be, then things get a little more complicated— which spouse has the better insurance plan? You don’t want to be over-insured or double insured and pay too much in premiums. Will you be having children in the near future? If so, pick a plan with that in mind. Is your favorite OB/ GYN a network provider? Is the hospital that’s in your birth plan included in your network? And once you have children, the need for healthcare rises exponentially.

7. Consider the past. Figuring out what you paid last year can be an important predictor of what your expenses may be in the next year. If you have a prescription medication that you take regularly, or if you have a chronic condition or ongoing ailment, what were the annual out-ofpocket costs to you (or your parents, if you were

covered by them)? That can provide a good guideline number to compare coverage costs for the options you have at open enrollment. It’s also a good starting number of what you might want to try to set aside in a tax-advantaged account.

8. Health insurance isn’t optional. Sure, you’re young and healthy, you have no chronic conditions or ailments—but what happens if, say, during a ski trip, you break a leg? Though there’s no longer a tax penalty for not buying insurance, it’s still a highly risky move—if you don’t have the money, the public exchange is built for you. If you do have the money, why would you take that risk? Medical expenses are the most common cause of bankruptcies in this country; don’t get surprised with medical bills that far outweigh your ability to pay. This speaks again to the need for starting a health savings account: HSAs are some of the best tax-free monies most people have available (i.e., they are deposited as pre-tax funds, and the money isn’t taxed when it’s taken out to pay for medical expenses).

9. Gig worker? Don’t panic. During open enrollment, the majority of people looking at health insurance options have employer-provided benefits. But if you’re a freelancer or 1099 worker—or your employer doesn’t provide health insurance—you can still make choices about your health insurance coverage. Go to the public exchange and evaluate the options there. Find out if you will get a subsidy; about 86 percent of people who buy on the public exchange receive some sort of subsidy. If you’re one of those who doesn’t, you can go directly to health plans in your market and get a quote for the insurance plan options available to you. Or look for groups that offer members discounted rates (freelancers’ unions, AAA, etc.).

10. Finally: Don’t just make the easy choice. That would be picking the same coverage you had last year simply because it’s easier. Or picking the cheapest policy. The one thing that can’t be emphasized enough is this: Do the work necessary to make the best choice for you. It can be as time-consuming as writing a will, but choosing the right coverage can have a major impact on your financial health. Optimizing your health insurance coverage is one of the most important things you can do now to shore up your financial future. What you decide can have a very material impact on your income—and your future well-being.

Jeff Bakke, Chief Strategy Officer WEX Health jbakke@wexhealthinc.com www.wexhealthinc.com www.wexinc.com About WEX Inc.

Powered by the belief that complex payment systems can be made simple, WEX Inc. (NYSE: WEX) is a leading provider of payment processing and business solutions across a wide spectrum of sectors, including fleet, travel and healthcare. WEX operates in more than 10 countries and in more than 20 currencies through more than 3,500 associates around the world. WEX fleet cards offer 11.5 million vehicles exceptional payment security and control; purchase volume in its travel and corporate solutions grew to $30.3 billion in 2017; and the WEX Health financial technology platform helps 300,000 employers and more than 25 million consumers better manage healthcare expenses. For more information, visit www.wexinc.com.

The average couple retiring today at age 65 will need $280,000 to cover healthcare and medical costs in retirement*.

Employees can save for out-of-pocket healthcare expenses AND retirement at the same time with a Health Savings Account. WEX Health can help.

Visit www.wexhealthinc.com/clearinsights/ to learn more.

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another new trainer was hired. Although the gym later offered to put Mace back on the schedule, she decided to find other work instead and opted to file suit under USERRA.

Managing Reemployment of Returning Service Members under USERRA

By DAVEANTE JONES

The Uniformed Services Employment and Reemployment Rights Act (USERRA) was signed into law in 1994. Among other things, it “protects returning veterans and other uniformed service members when transitioning to civilian life, requiring reemployment in either the same position or a position of like seniority, status and pay, the duties of which the person is qualified to perform.” It covers all categories of military training and service, including duty performed on a voluntary or involuntary basis in time of peace or war and applies to all public, private and government employers in the United States, large and small.

Although it is relevant to virtually all employers and a large number of employees, many employers have trouble navigating the highly regulated waters that the law entails. Take for instance two recent Eighth Circuit cases, Mace v. Willis, 897 F.3d 926 (8th Cir. 2018) and Scudder v. Dolgencorp, LLC, 900 F.3d 1000 (8th Cir. 2018).

MACE V. WILLIS In Mace v. Willis, after a bench trial, the District of South Dakota found and the Eighth Circuit affirmed that a South Dakota kickboxing gym violated USERRA by failing to promptly reemploy Kiesha Mace, a member of the South Dakota National Guard, and that the violation was willful.

Mace was employed as a fitness trainer at the gym. While employed, Mace took three weeks off for mandatory military training. In the months leading up to her departure, she averaged 13.6 hours per week at the gym. Like the other fitness trainers, Mace was not guaranteed shifts at the gym. Instead, the gym’s owner or general manager would schedule the trainers like Mace for shifts using a mobile app, and would sometimes call Mace to cover shifts for absent coworkers. After timely notifying the gym that she was a member of the National Guard and that her departure was for mandatory military training, Mace departed for training. While away, Mace was deleted from the scheduling app and the owner of the gym hired a new trainer to take shifts at the gym.

When Mace returned, she asked why she could not access the app.

Mace was told that she had been replaced. Two days after her return, 34

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In ruling in favor of Mace, the Eighth Circuit rejected the gym’s argument that Mace was put back in the same position she left when she departed for training: an employee whom it had complete discretion to assign no shifts at all. Particularly, the facts clearly showed that Mace was replaced and was not later reemployed. The owner and general manager used the app to schedule employees’ shifts, so the effect of removing Mace from the app was to remove her from the pool of eligible workers.

Additionally, two new staff members were hired—one while Mace was gone and one shortly after she returned—and Mace was told that she had been replaced. The court then considered and rejected the notion that the gym may avoid USERRA liability because USERRA did not apply to employees who lack guaranteed shifts because the regulations make clear that even temporary, probationary and seasonal employees enjoy USERRA protections. Although there may have been an argument for an affirmative defense that the job in question “was for a brief, nonrecurrent period and there was no reasonable expectation that the employment would have continued indefinitely or for a significant period,” 20 C.F.R. § 1002.41, the gym failed to raise it in the district court or on appeal. Finally, because the gym owner testified at trial that he knew members of the armed forces enjoyed reemployment rights, and Mace testified that she warned the gym’s general manager that the gym was probably violating its obligations under USERRA, the Eighth Circuit held that the facts supported the inference that the gym “knew or showed reckless disregard for whether its conduct was prohibited by the [USERRA].” 20 C.F.R. § 1002.312(c).

SCUDDER V. DOLGENCORP, LLC In Scudder v. Dolgencorp, LLC, an Eastern District of Arkansas court granted summary judgment in favor of Dolgencorp, LLC d/b/a Dollar General ruling that Dollar General had not denied Samuel Scudder reemployment as required under USERRA, finding that: (1) Scudder did not apply for reemployment as required by USERRA because he never communicated a request for reemployment; (2) Scudder’s employment application was not a demand for reemployment in his prior position and Dollar General reasonably expected Scudder to seek reemployment through another avenue; and (3) Scudder waived his right to reemployment when he resigned. The Eighth Circuit, however, reversed the decision and remanded the case for further proceedings.

In June 2013, Scudder, a sergeant in the Arkansas National Guard, was hired and later promoted to store manager at the Dollar General’s Benton, Arkansas store. Deployed to Afghanistan in April 2014, Scudder coordinated his military leave through Dollar General’s thirdparty leave coordinator—Matrix Absence Management (Matrix).

Scudder was wounded in action in Afghanistan and assigned to a Missouri unit from December 2014 to February 2016 for medical transition out of the military. While there, Scudder provided notice to Matrix of his continuing military leave and was approved for leave through April 1, 2016. On March 31, 2016, Scudder spoke with a Matrix claims examiner and testified: “So I explained my deal to her again and said, in a sense, they won’t return my calls for me to be able to find out if I need to return to work, to find out if I need to put in my two weeks because I can’t return to work.” The claims examiner took this as Scudder’s resignation and emailed notice of Scudder’s resig-

nation to Dollar General on April 4, 2016. Dollar General requested confirmation, and the claims examiner confirmed Scudder “would not be going back to Dollar General.” Concluding Scudder had resigned, Dollar General processed the separation of his employment and sent him an exit survey. Scudder responded to that email, detailing his active duty and his attempts to contact Dollar General’s human resources department and current district manager upon his return from active duty and expressing how he really enjoyed working for Dollar General and would have loved to continue to work for Dollar General. He received no response. At the end of April, Scudder applied online for a store manager position at a Dollar General store in Bryant, Arkansas. In his application, he indicated that he had previously worked for Dollar General but was “let go . . . after returning from Afghanistan injured and no one from the corporation would ever contact [him] back.” He then stated he was a former store manager at Dollar General’s Benton store and listed the National Guard as one of his previous employers.

He was not hired for that position. In May 2016, Scudder filed suit against Dollar General, asserting his right to reemployment under the USERRA. During all of this, while on military leave, Scudder applied for Social Security Disability (SSD) benefits with the Social Security Administration (SSA). Although denied initially, Scudder persisted and was awarded benefits in December 2016, after being found to be totally disabled since December 10, 2014.

In reversing the district court’s order, the Eighth Circuit found that Scudder’s claim that he did not resign but was trying to find out what he needed to do to maintain his job was plausible and a reasonable factfinder could conclude that Scudder did not “clearly and unequivocally” resign as required under USERRA. The Eighth Circuit also found that a reasonable jury could find that Scudder’s application for the store manager position at the Bryant store was sufficient to give a reasonable employer adequate notice that Scudder was a returning service member seeking reemployment despite Dollar General’s argument that Scudder should have sought reemployment through Matrix. Finally, the Eighth Circuit rejected Dollar General’s argument that Scudder’s USERRA claim was barred by judicial estoppel because he told the SSA he was unable to work in any capacity. Noting that the Social Security Act does not take into account “reasonable accommodation” in determining whether an individual is disabled, the Eighth Circuit found that an individual could be disabled under the Social Security Act, but still be able to work with reasonable accommodation and therefore entitled to reemployment under USERRA.

TAKEAWAYS Be sure to stay informed on your obligations to military personnel under USERRA. Suggestions include visiting the Department of Labor’s website or consulting legal counsel. Make sure you have an accurate military leave policy in place, and document any service-related communications with military service member employees. Finally, stay in contact with your employees while they are on military leave.

Although USERRA can be difficult to navigate because it is highly regulated, doing these things can help.

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

35

The Art & Science of Market Pricing Positions

By TIFFANY CARDWELL

In today’s increasingly tough HR environment, where it seems like all of your peers are competing to hire (and retain) the best and the brightest talent, market pricing plays an important role in determining how much a position is worth within the greater marketplace. However, the market pricing process is both an art and science, with many factors to consider when determining compensation.

Compensation philosophies

Internal and external factors

First things first. Before companies consider reviewing external market data, it is important for senior leaders to agree upon a compensation philosophy. This requires some introspection.

Where does the company want to set pay for the organization as a whole? Will the company implement different pay philosophies for different divisions? Should the organization place a higher value on rapidly evolving technology jobs? Should we provide any type of variable incentive pay for our employees?

If so, do we do so throughout the organization, or just with management levels and above?

Once a Company has established their compensation philosophy, they now have to think about market pricing their individual positions. The objectives of market pricing include providing relevant pay data to assist with attracting, retaining, motivating and recognizing employee contributions.

There are three commonly described compensation philosophies---Lead, Lag and Match.

In order to obtain the best market pricing data for the company, HR will often work with managers to ensure that they’ve conducted an analysis of their current department and have a good idea of the jobs that are truly necessary to accomplish goals and objectives. Factors include the current job’s relationship with others within the organization, the essential skills and qualifications for performing the job, environmental conditions under which the work is being performed, as well as the travel time that may be involved. The end result of this process is the creation of a job description outlining the requirements of each position.

In the Lead philosophy, the focus is on paying higher wages and offering higher benefits to attract the best talent. Examples often include start-ups, high tech companies and innovative, new, product-based organizations.

In a Lag philosophy, the tendency is to pay lower wages while offering higher benefits. Colleges and universities tend to provide free tuition for employees and their families. Although wages may be lower, providing free tuition attracts and retains employees who are seeking to obtain their own degree or to provide this benefit to their dependents.

In a Match philosophy, the goal is essentially to go with the flow by paying similar wages and offering comparable benefits to the rest of marketplace. Most companies will try and achieve a Match philosophy to remain competitive within their industry. Oftentimes it is the culture that they build within their organization that differentiates them from their competitors, along with the holistic compensation package that they may be offering.

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Market pricing is alas, not a one and done exercise. Reviewing data from year-to-year helps companies analyze and establish their salary budgets, while also recommending appropriate pay adjustments and increases throughout the year. It is also critical that these budgets support recruiting, performance and talent management strategic goals.

We are all familiar with what a job description looks like. It outlines a title, who the employee will report to, a summary of the position, primary duties and working conditions. Good job descriptions may also include budgetary and supervisory responsibilities. A well- articulated job description is extremely helpful in determining the value of a job both internally and externally.

When evaluating a job’s worth, both internal equity and external competitiveness need to be part of the conversation. Manager input is critical to ensuring that there’s an appropriate understanding of the job requirements that will determine the market match for a position in comparison to existing survey data.

Sources and process There are various survey data sources that are available to guide the market pricing process. In order for companies to receive a discounted rate for purchasing these salary surveys, they are typically asked to participate in the survey submission process themselves. It’s critical for companies to do a little research on which survey vendors they prefer, and to which they would like to contribute data. Surveys that focus on specific industries locally and nationwide are a good resource.

It is also important for companies to gather data on how long surveys have been conducted, how many participants are involved, how many incumbents are included with each position surveyed and whether other data, such as incentive dollars, are reported to provide a Total Targeted Cash compensation review of each of their positions.

to ensure the alignment makes sense. This will then lead to a competitive analysis of where pay should fall for candidates applying for the position as well as current incumbents.

Compensation market pricing is an art and a science. Company leaders must collaborate to ensure that pay for each employee is at an appropriate level on the market data continuum, per their own compensation philosophy. The data from salary surveys is just one point of reference for determining pay. Everything from individual competencies and contributions, salary budget, the internal need, as well as the market demand can also influence a pay decision.

For more information on market pricing and compensation, contact MCM HR Consulting Principal Tiffany Cardwell, SHRM-CP, PHR, CCP via e-mail at Tiffany.Cardwell@mcmcpa.com.

The market pricing process may look like the following:

Once an organization selects the salary surveys that they would like to use to collect external market data, they will review their own internal compensation and align their own job descriptions with good job matches to the salary survey jobs. It is also critical to conduct a business review with the department leaders

Tiffany Cardwell, SHRM-CP, PHR, CCP HR Consulting Principal Tiffany.Cardwell@mcmcpa.com MCM CPAs & Advisors www.mcmcpa.com

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PAY EQUITY: A Continuing Trend of State Legislative Action in 2018

By LATOI MAYO

Most employers are taking steps to plan ahead by gathering information to make appropriate, lawful compensation decisions. However, setting compensation can be difficult when there are an influx of equal pay changes in the law-primarily at the state and local level. Developments in the area of pay equity laws adopted in the last year change the landscape for evaluating compensation, so it is important for multi-state employers to understand these new laws, and also consider conducting a fair pay audit to assist with its compliance efforts.

State Equal Pay Developments New Jersey: New Jersey amended its equal pay statute, which took effect on July 1, 2018. Under the amended statute, employees are entitled to an equal rate of pay (including benefits) for “substantially similar” work. This standard is intended to be more employeefriendly and as such is broader than prior versions of the law. Factors to determine if work is “substantially similar” are: “skill, effort, and responsibility.” Importantly, comparisons “shall be based on wage rates in all of an employer’s operations or facilities,” which greatly expand the pool of employees that must be considered when assessing who is engaged in substantially similar work.

New Jersey also joined several other states like Oregon, California and Maryland, now prohibiting pay discrimination on the basis of “race, creed, color, national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait,” or military service.

There are exceptions to the amended law. Differential rates of pay are lawful if the employer can prove that it results from: (1) a seniority system; (2) a merit system; or (3) one or more bona fide legitimate factors: training, education, experience or quality or quantity of production. Reliance on these factors is justified, if the following elements are met: 1. The factor(s) in question are not characteristics of protected class members and do not perpetuate a differential that is based upon characteristics of protected class members.

2. Each of the factor(s) is applied reasonably.

3. One or more of the factors account for the entire differential.

4. The factors are job related to the position in question and based upon legitimate business necessity.

5. There are no alternative business practices that would serve the same business purpose without producing the disparity.

Washington: The State of Washington adopted the Equal Pay Opportunity Act (EPOA), which became effective on June 7, 2018, and applies to all employers in the state.

The EPOA prohibits pay disparities between “similarly employed” employees. Individuals are similarly employed if: (1) they work for the same employer; (2) they perform a job that requires similar skill, effort, and responsibility; and (3) the jobs are performed under similar working conditions. The statute expressly specifies that job titles are not determinative when drawing comparisons. This law also includes exceptions similar to New Jersey’s revised law and clarifies that previous wage history does not justify a pay disparity.

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Interestingly, the EPOA also prohibits employers from limiting or depriving employees of “career advancement opportunities” on the basis of gender, but the law does not define this phrase. Maryland’s amended equal pay law includes a similar provision. The Maryland law prohibits employers from “providing less favorable employment opportunities” – in addition to disparate wages – to employees based on sex or gender identity. The Maryland law defines “less favorable employment opportunities” to include conduct such as “assigning or directing the employee into a less favorable career track, if career tracks are offered” or failing to provide information about promotional opportunities.

The EPOA also prohibits employers from banning employees from disclosing or discussing their wages, with narrow exceptions. Employers are also expressly prohibited from retaliating against workers who ask about, compare, or discuss employee wages, or who ask for an explanation about wages or the lack of advancement.

Massachusetts: The Massachusetts Act to Establish Pay Equity (AEPE) took effect on July 1, 2018, and makes it illegal to pay employees compensation at a lower rate than the rate paid to employees of a different gender for comparable work. Similar to Washington, “comparable work” is not limited to employees who have the same job title.

Like the EPOA in Washington, the AEPE includes both salary history and wage transparency provisions. Employers may not: (1) screen job applicants based on their wages; (2) request or require an applicant to disclose prior wages or salary history; or (3) seek the salary history of any candidate from any current or former employer, unless the candidate provides express written consent and an offer of employment-including proposed compensation has been made. Retaliation against employees is also unlawful under the AEPE. Interestingly, the AEPE offers an affirmative defense to an employer that can prove it “completed a selfevaluation of its pay practices in good faith” and “that reasonable progress has been made towards eliminating wage differentials based on gender

for comparable work.” While these are not required, they clearly can be helpful. The Massachusetts Attorney General has published an Overview and Frequently Asked Questions, which addresses a variety of topics and provides further guidance on the self-evaluation process.

State Salary History Bans In addition to equal pay laws, salary history bans also remain a hot legislative trend. The rationale behind state salary history ban measures is that pay inequities are perpetuated when current pay is based on past employment decisions that could have been discriminatory. At this moment, seven states have adopted salary history laws, including, along with New York City, San Francisco, and a host of other local municipalities. Those seven states are California, Connecticut (effective January 1, 2019), Delaware, Hawaii (also effective January 1, 2019), Massachusetts, Oregon, and Vermont.

The laws all generally prohibit employers from asking candidatesor their current or former employers-about their wage history. Some states go further, like Vermont, Delaware and Massachusetts, and also prohibit employers from requiring that prospective employee’s current or past compensation satisfy minimum or maximum criterion. And in other states, like California, Hawaii and Oregon, employers cannot rely on wage history information when deciding whether to hire a candidate and/or what salary to offer.

2018 Year in Review and What to Expect in 2019 Littler Memphis Office November 14, 2018

The salary history bans do include certain exceptions when such inquires may be permissible. Typically, a candidate’s voluntary disclosure of prior wages is not a violation and will not preclude an employer from consideration of that information in either the hiring or compensation process. Additionally, Massachusetts and Delaware allow employers to confirm an applicant’s salary history after extending a job offer that includes compensation. Employers also may be entitled to use salary history information when considering internal candidates for transfer or promotion.

Recommendations Keep in mind that employers may face liability even if management is unaware of any lingering, unjustified pay disparities. The annual compensation review process is the ideal time to be proactive in reviewing compensation systems carefully, preparing an analysis of the compensation of employees performing similar work, and documenting the reasons for any differentials. An audit directed by legal counsel may be preferable so that findings can be protected by privilege.

Employers should also revise policies for setting the compensation of newly hired and promoted employees, consider implementing formal pay scales, and discontinue practices that might violate any applicable salary history or wage transparency laws.

Finally, training for HR professionals and managers is highly recommended to ensure that these individuals understand their obligations when making decisions about hiring, compensation, and career advance opportunities.

Steven W. Likens, Shareholder, (L) presented a recap of some of the most significant developments in labor and employment law in 2018.

Matthew G. Gallagher, Associate, (R) provided a proactive look at what to expect in 2019.

Please see our Facebook Live video at www.facebook.com/hrprofessionalsmagazine for more information about their presentations.

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

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THE

ELEPHANT IN THE BRAIN

By WILLIAM CARMICHAEL

An

intriguing paradox lies just under the surface with this month’s review. Take, for example, the expression ‘elephant in the room,’ that metaphorical idiom for an obvious problem or dilemma that no one wants to acknowledge or address; in other words, a social taboo. We know it’s there but we just don’t want to deal with it until we are forced to. Nor, do we like to address something as dangerously familiar as ‘elephant in the brain,’ an important but unacknowledged feature of how our minds work; in other words, an introspective taboo. It is this introspection we find with The Elephant in the Brain: Hidden Motives in Everyday Life by Kevin Simler and Robin Hanson. In essence, the elephant in this case, becomes, as our authors put it; “An important but unacknowledged feature of how our mind works.” And regardless of our individual perspective, Simler and Hanson explain to us that “Human beings are primates, and primates are political animals.

Our brains are therefore designed not just to hunt and gather, but also to get ahead socially, often by devious means.” Unfortunately, how true this tends to play out!

Humans . . . devious?

Actually, the answer is so ridiculously obvious yet business ethicists, philosophers and scientists have long argued that some parts of our human psyche; namely the darker, more sinister parts, are those we know we have but choose to leave undisturbed . . . until needed. This broad assumption, as our two authors will attest, is that the brain was designed to deceive itself in order to better deceive others. This especially plays out within large, complex organizations such as governments, corporations, hospitals, universities, etc.., as well as within smaller, less formal ones. As the “Hidden Motives” in the title alludes, all willful intentions, good and bad, are at our beck and call. We select the one that best fits that situation.

The Elephant in the Brain also posits a rather fascinating thesis; “That we, human beings, are a species that’s not only capable of acting on hidden motives- we’re designed to do it. Our brains are built to act in our self-interest while at the same time trying hard not to appear selfish in front of other people. And in order to throw them off the trail, our brains often keep “us,” our conscious minds, in the dark. The less we know of our own ugly motives, the easier it is to hide them from others.” For example, within corporate culture, those we associate with a hidden agenda are the same we perceive as conniving and manipulative simply because we assume it was their obvious intent, when in fact, it may have been just the opposite.

Face it . . . we are social creatures, even at work!

Towards this, two crux come to mind. First, empirical. As a former HR executive, I am still not sure that I feel all that comfortable with the objectivity of the author’s thesis, however, it is one that the authors have put together well. For me, one major argument of the book is one I gravitate towards more and more since working in large corporate organizations as well as university administrations; things are rarely what they seem to be, which I’m sure our HR and legal readers will resoundingly agree with! The question then is why, if we knowingly harbor these negative motives, can’t keep them under wraps? Perhaps it is because The Elephant in the Brain carefully argues that as social creatures we are conscious of the fact that we are constantly exposed to the judgments of other people and in order to look good, we hide our ugliest nature. And we don’t just hide it from others, we hide it from ourselves.

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The second crux is purely theoretical. Simler and Hanson are no strangers to business and academia.

Here they have utilized four distinct academic realms; microsociology, cognitive and social psychology, primatology, and economics to explore the very depths of understanding how and why motives work the way they do. I somehow feel it important to add that despite the amount of references to primatology our authors describe in the first chapter of the book, significant baring is given to motives within religious beliefs which embodies Chapter 15.

Structure and Layout At 17 chapters, the book is written in two parts: Part 1- Why we hide our motives explores; animal behavior (Ch. 1), the competitive nature of humanity (2), our tendency to establish norms (3) and then to cheat them in order to profit (4), the central fact that we self-deceive in order to feel good about ourselves but most importantly to improve the chances that others will also be fooled (5) and lastly, the counterfeit reasoning we employ to make ourselves appear so heroic to ourselves and others (6). In Part 2- Hidden motives in everyday life delves into the hidden motivations that manifest themselves in our everyday lives such as Body Language (7), Laughter (8), Conversation (9), Consumption (10), Art (11), Charity (12), Education (13), Medicine (14), Religion (15), Politics (16), and an eye-opening Conclusion (17).

Allow me to make two quick points about The Elephant in the Brain: Hidden Motives in Everyday Life. First, it is not a light read. It is intensely wellresearched and swiftly gets to the very heart of human emotions and reason. You will often find yourself scratching your head wondering how the authors were able to determine our motives so uncannily “on-point.” Second, it is not one that readers should expect to casually peruse through over a weekend. There is a directness and honesty that will cause you to want to reread portions. You owe it to yourself to read this one!

ABOUT THE AUTHORS: Kevin Simler is a writer and software engineer.

Robin Hanson is an associate professor of economics at George Mason University and a research associate at the Future of Humanity Institute of Oxford University.

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

PassionHR Consulting, Inc. We are Passionate About HR and Your Business Success!

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Excellence Through Leadership Conference

Great Wolf Lodge in LaGrange, GA October 18-19, 2018ce

Highlights See our Facebook Live videos at facebook.com/hrprofessionals magazine/videos

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1 Charles Little, President and CEO of Strategic HR Partners made opening remarks and welcomed the attendees to the conference. 2 Greg Hare, Managing Partner of Ogletree Deakins Atlanta presented “Handling Harassment Complaints in the #MeToo Era: Refining Your Company’s Best Practices.”

3 The keynote presentation was, “Building a Magnetic Culture: How to Attract & Retain Top Talent to Create an Engaged Highly Productive Workforce,” by Kevin Sheridan. He also presented “Business Case for Leadership Development and Learning: Why Training is Increasingly Critical.”

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4 ADP was a sponsor of the event. 5 Margaret Morford, CEO and Owner of The HR Edge, was also a keynote speaker. She presented “Leadership Lessons from My Disfunctional Career and Upbringing,” and “HR Means Business – How to Write a Strategic Plan in Human Resources.”

6 Nathan Allen, attorney with Ogletree Deakins Atlanta, presented an “Employment Law Update.”

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7 Cynthia and Charles with Maddie Bradin, National Account Executive with Data Facts in Atlanta, and Stewart Gott, National Account Executive with Data Facts in Nashville. 8 (L-R) Robert Carlson, MPA; Dr. Nick Vlachos, and Nathan Levy, J.D.; led a panel discussion on “What to Do to Combat the National Opioid Crisis, and How it is Affecting Your Businesses, Communities, Employees and Insurance Costs.�

9 9 The University of Alabama was a sponsor of the event.

www.HRProfessionalsMagazine.com

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What Could the 2018 Midterm Elections Mean for Workplace Policy?

By NANCY HAMMER

T

he 2018 midterm election results gave both Democrats and Republicans something to celebrate with major gains for Democrats at the state level but mixed results in Congress.

When the 116th Congress convenes in early January, the GOP will add to its majority status in the Senate, which in turn will strengthen President Trump’s chances of having his agency nominations confirmed.

The President will also face a smooth path to filling judicial vacancies with conservative judges, including any that might arise in the Supreme Court in the remainder of his first term. By capturing the House of Representatives on Election Night, Democrats in 2019 will control the chairmanships of all House committees and will have at least a three- or four-seat majority in each committee guaranteeing heightened oversight of President Trump’s policies and administration for the next two years.

The 2018 election results will have a major impact on the shape and direction of HR issues arising in the House and throughout several states. For example, SHRM predicts that Democratic proposals on such topics as the Paycheck Fairness Act, increases in the federal minimum wage and the Healthy Families Act are all but certain to be resurrected in the 116th Congress. However, Republican leaders in the Senate have signaled that they intend to advance alternative proposals, including proposals to encourage paid leave, efforts to amend the Patient Protection and Affordable Care Act (PPACA), and possible additional tax reform legislation.

Gains by the Democrats in state races will likely usher in a rash of employee-friendly workplace policy initiatives, such as paid leave mandates, predictive scheduling legislation and state-level legislation designed to enhance pay equity. While the chances of employee-friendly legislation becoming law in Congress will be remote given the Republicans’ stronghold in the Senate, such measures will likely gain traction at the state level, especially in states where the Democrats control the governor’s mansion along with both chambers of the state legislature.

Republicans will also continue to focus even more intently on executive branch activities, particularly executive orders and regulations relating to immigration reform and the impact international trade has on the competitiveness of U.S. organizations. Despite gains in the Senate, however, the GOP will still be short of the necessary 60 votes needed to obtain “cloture,” or to limit debate and secure a final vote on legislation. Without the help of at least a handful of Democrats or the two Independents who caucus with them, Republicans could encounter the same parliamentary roadblocks they faced in trying to pass legislation during the 115th Congress. And even if they are successful in moving legislation out of the Senate, they will encounter a majority of 35 or greater Democrats in the House, which means that any legislation that reaches the president’s desk will need to be bipartisan.

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Despite these perfect conditions for gridlock, there could be movement on some of the more bipartisan issues affecting the workplace such as workforce development. While the national unemployment rate is 3.7 percent—the lowest since 1969— employers are still facing a skills gap that will only get worse as the unemployment rate continues to decrease. HR professionals report that their most effective approach to fill full-time regular positions is training existing employees to take on tough-to-fill roles. As they upskill existing employees, employers are also committing to inclusive hiring practices to remove employment barriers for qualified long-term unemployed job seekers and other nontraditional candidates including older workers, veterans, low-skilled workers, workers with criminal histories and global talent. For this reason, legislative efforts focused on upskilling and reskilling employees could receive attention. In addition, bipartisan criminal justice reform legislation, which includes provisions for work training programs, recently garnered the support of the President.

Another area of bipartisan concern is the $1 trillion in student-debt carried by Americans. Bipartisan SHRM-supported legislation would address this issue by increasing the allowable amount of employerprovided educational assistance, which provides tax-free assistance through section 127 of the Internal Revenue Code, and expanding it to include student loan repayment. The House of Representatives will likely consider a year-end tax bill that could include these proposals.

Another feature of the midterm elections was the increase in female candidates with 106 women claiming victory--the highest number of female legislators of any Congress in history. This shift could signal a revival of legislation focused on workplace equity, especially given that the majority of newly elected women are Democrats. House legislation will likely focus on gender equity including pay equity and prohibitions on the use of salary history in hiring.

In addition, the issue of sexual harassment in the workplace has been front and center in our national conversation in 2018. The Equal Employment Opportunity Commission (EEOC) recently issued its annual statement for fiscal year 2018 and reported having “filed 66 harassment lawsuits, including 41 that included allegations of sexual harassment. That reflects more than a 50 percent increase in suits challenging sexual harassment over fiscal year 2017.” A continued rise in complaints along with continued pressure from #MeToo will lead to Democratic proposals to limit the use of arbitration in cases of sexual discrimination and limit the use nondisclosure agreements.

Congress may also revive the Employment Non-Discrimination Act (ENDA) or other legislation focused on sexual orientation and gender identity. These proposals are likely to be met with enhanced religious carve-outs and may face opposition in a Republican-controlled Senate.

With Congress divided, no clear mandate for either party, and a wealth of new faces at all levels of government, it is imperative for business leaders and HR to proactively welcome the incoming Congress, and to educate new legislators about all matters work.

Nancy Hammer | Vice President, Regulatory Affairs & Judicial Counsel Society for Human Resource Management nancy.hammer@shrm.org shrm.org | @hammershrm

2018 When Work Works Awards Recognize Workplaces with Positive Cultures that Breed Success Prestigious national SHRM awards honor employers committed to workplace flexibility, training employees and valuing individuals.

The Society for Human Resource Management (SHRM) announced the winners of the prestigious 2018 When Work Works Awards. The 97 winning worksites in 35 states and the District of Columbia provide insight into the best practices of effective workplaces and related emerging trends.

Among the effective practices of winners, workplace flexibility was a common theme that inspired innovative efforts aimed at developing a dynamic workplace culture.

The winners are organizations that embrace building positive work environments, promoting workplace learning, growing talent in their communities, and providing customized work schedules that support the needs of businesses and employees. Many winners also came up with creative activities and programs to promote teambuilding, inclusion and communication among all employees.

For instance, one winning company has an “intrapreneuring” program that encourages any employee to submit and own new business ideas to advance organizational goals. Another implemented a culture-building initiative that has improved employee engagement and financial performance outcomes. All of these winners offered some kind of flexible scheduling, opportunities for education and career development, wellness activities, and other perks.

“Each of the 2018 When Work Works Award winners tells a different story about how it created a dynamic, positive and effective workplace culture,” said Johnny C. Taylor, Jr., SHRM-SCP, president and CEO of SHRM. “But there are common themes among all winners’ practices. They are committed to workplace flexibility, mentoring and training employees, and having at the heart of their organizations an appreciation of the value of individual workers.”

The When Work Works Award—part of the SHRM When Work Works — recognizes employers that excel at employee initiatives such as work/life fit policies, flexible scheduling and transition to parenthood programs.

“The 2018 When Work Works Award winners found that cultivating a positive, caring workplace culture was ground zero for building a dynamic, engaged and committed workforce,” said Lisa Horn, SHRM vice president, Congressional Affairs. “These organizations developed HR policies and programs to support and maintain this environment, and they are reaping the benefits with increased retention, productivity and overall success for their investment.”

The award is earned after a rigorous assessment that emphasizes the real-life experiences of employees and incorporates national benchmarks of employer practices from SHRM’s National Study of Employers and the National Study of the Changing Workforce. Two-thirds of an organization’s winning score is based on a survey of its employees. Here are the winners from Arkansas and Georgia.

ARKANSAS • Crafton Tull & Associates – Fayetteville, AR Services – Professional, Scientific, Technical Worksite Employees: 12 www.craftontull.com • Crafton Tull & Associates – Little Rock, AR Services – Professional, Scientific, Technical Worksite Employees: 25 www.craftontull.com • Crafton Tull & Associates – Rogers, AR Services – Professional, Scientific, Technical Worksite Employees: 64 www.craftontull.com • Cross, Gunter, Witherspoon & Galchus, P.C – Little Rock, AR Services – Professional, Scientific, Technical Worksite Employees: 30 www.cgwg.com • Harvest Group – Rogers, AR Services – Professional, Scientific, Technical Worksite Employees: 59 www.harvestgroup.com

GEORGIA • Hannon Hill Corporation – Atlanta, GA Services – Professional, Scientific, Technical Worksite Employees: 26 www.hannonhill.com • Project Community Connections, INC. – Atlanta, GA Social Assistance Worksite Employees: 23 www.pccihome.org

The top-scoring workplaces are small employers that offer substantial flextime and flexibility in where their employees can work.

One large employer that won, BDO USA LLP, supports work-schedule customization for all levels of employees by providing “Flex Lead” volunteers in every office to help make this happen.

“Workplace learning, customized workflex, mentorship and employee-based innovation are just a few of the exciting workforce trends becoming a reality for those employed by the 2018 When Work Works Award winners,” said Cassidy Solis, senior advisor for workplace flexibility. “These organizations understand that workplace flexibility helps build great cultures and contributes to the success of employees and business.”

To learn more about the awards, visit an interactive map that lists winning organizations by state and a list of winners by name.

Additional information about the When Work Works initiative also is online.

About When Work Works When Work Works is a national initiative led by the Society for Human Resource Management (SHRM) to help businesses of all sizes and types become more successful by transforming the way they view and adopt effective and flexible workplaces. When Work Works is one of the foremost providers of resources, rigorous research and best practices on workplace effectiveness and flexibility in the nation. The initiative administers the prestigious annual When Work Works Award, which recognizes exemplary employers for creating effective workplaces to increase business and employee success. Visit whenworkworks.org and follow us on Twitter @WhenWorkWorks. www.HRProfessionalsMagazine.com

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October 16 at the

Great Hall & Conference Center in Germantown, TN

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1 Jeremy Park, cityCURRENT CEO, welcomed attendees to the October breakfast meeting. 2 Steve Pemberton, Chief Human Resources Officer for Globoforce, was the keynote speaker.

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3 (L-R) Dave Carlson with Smith & Nephew; Thomas Lannan with Junior Achievment, and Judy Bell with Judy Bell Consulting 4 Chrissy Jacks-Barrett, Treasurer; Verlinda Henning, President; and Brigette Wilson, President-Elect with SHRM-Memphis

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5 David Dufour, Director of Human Resources for the Bank of Fayette County; Robyn Jonston, SHRM-Memphis VP Workforce Development; and John Frye, Director of Human Resources for Crew Training International.

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The Bluegrass Compensation Association The Bluegrass Compensation Association was founded in 1997 by area human resources professionals who had a desire to promote the professional practice of compensation and benefits management. We provide education programs, networking opportunities and access to information resources to a membership made up of professionals, managers and administrative staff from top employers in Central Kentucky.

BCA meetings provide a relaxed atmosphere for members and guests to meet peers, hear from leading-edge HR professionals and exchange ideas and information. Regular meetings take place in February, April, June, August, October and December. BCA also offers Professional Development Sessions and discounts on WorldatWork and Compensation Local Network courses in the area.

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6 Rob Hughes with Porter Leath, and Terry Reeves with Mahaffey Tent

BCA is a local affiliate of WorldatWork, the world’s leading not-for-profit professional association dedicated to knowledge leadership in compensation, benefits and total rewards. Founded in 1955, WorldatWork focuses on human resources disciplines associated with attracting, retaining and motivating employees.

BCA members are encouraged to join WorldatWork, but national membership is not a requirement for local participation. Additionally, as a WorldatWork member you are welcome to join BCA. Although local participation is not required, it does give you a unique opportunity to share ideas and resources with peers in Central Kentucky.

For more information visit bluegrasscomp.com.

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8 Students from St. George’s Independent School with Jason Hills, Director of the Institute of Citizenship for St. George’s.

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

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What HR Professionals Need to Know About Employment Immigration for 2019

BY GREG SISKIND

Now that the 2018 elections are over and we head into a new environment of divided rule in Washington, it’s time to assess where business and employment immigration stands half-way through the President’s term in office and to preview what 2019 might look like from the perspective of immigration law.

We knew immigration would be a major issue for President Trump based on the attention he gave it during the campaign. Most of the media attention was devoted to his rhetoric on immigration enforcement, but an examination of his campaign web site made it clear that legal immigration programs would be targeted as well. In his list of top ten immigration priorities was this promise:

Reform legal immigration to serve the best interests of America and its workers, keeping immigration levels within historic norms.

While some of President Trump’s earliest actions like the Travel Ban impacted employment immigration, the Administration’s intentions became clear in April 2017 when the President signed the the Buy American, Hire American Executive Order (“BAHA”) which stated

In order to create higher wages and employment rates for workers in the United States, and to protect their economic interests, it shall be the policy of the executive branch to rigorously enforce and administer the laws governing entry into the United States of workers from abroad...

BAHA has translated into a variety of initiatives implemented through a combination of proposed regulations, published policy memoranda, unpublished initiatives that have been demonstrated by adjudication trends and even web site changes that represented major policy shifts.

Most of the changes concern F-1 students and H-1B specialty occupation workers. With respect to students and employers, three changes are having the most serious consequences: - An unannounced change in the way USCIS interprets how much curricular practical training time is available to students for work with outside employers while they’re pursuing their degrees has led to a sudden flurry of denials of changes from F-1 to H-1B status - A new memorandum issued in August 2018 makes F-1 students and J-1 exchange visitors subject to bars on entry to the US of up to 10 years if they violate the terms of their visas. The memorandum can be applied retroactively, and the violation may not come to light until years later. This memorandum is now being challenged in court.

- A web site change made early in 2018 barred F-1 STEM students from using their Optional Practical Training at third party work sites. That change was challenged in court and USCIS appears to have backed off.

With respect to H-1Bs, there have been a number of changes that have employers on edge.

First, the rate of issuing Requests for Evidence increased by 45% in Fiscal Year 2018. Much of that has to do with more restrictive interpretations on what jobs meet the test for a “specialty occupation”. If an employer says that more than one degree is an acceptable background for the position, USCIS is taking the position that the job doesn’t meet the requirements for an H-1B. Also, USCIS revoked a 17-year-old memorandum that made it clear that computer programmer occupations qualify for H-1B visas. Furthermore, employers paying a “Level 1” wage in the DOL online wage survey are being questioned regarding whether a job is really professional in nature.

Employers sending workers to third party worksites now must provide a lot more information about the nature of the work and USCIS will limit the approval period to the time the employer can demonstrate the worker will be working at the third-party site.

Getting fast processing on an H-1B petition via premium processing is a lot harder these days.

USCIS suspended premium processing last April for most petitions. The bar on premium processing is supposed to end in February.

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Interestingly, while the Administration has been relentless in pushing change (with at least 43 major changes in a variety of areas in the last two years), Congress has passed virtually nothing. The President had been engaged in a negotiation with congressional Democrats earlier this year that would have traded new enforcement measures (including building the infamous border wall) in exchange for a long-term solution for DACA recipients. Included in the President’s legislative plan was ending the Diversity Visa program and key family immigration categories in exchange for a new “merit” point-based system. Democrats were not willing to give up those programs and the deal went nowhere.

As for what’s on the agenda for 2019 that will affect employers, there are several items to watch.

First, USCIS is planning on issuing a proposed rule to bar H-4 spouses from applying for employment authorization (something that’s been available for the last four years). This has set off a panic in the high-skilled worker community and USCIS can expect to be sued as soon as they attempt to finalize the proposal.

USCIS is also finalizing a plan to create a new H-1B application registration system where employers will pre-file a request for H-1B visa and then be invited to file a complete application after being selected in a lottery. USCIS Director Francis Cissna has suggested the agency could have this program in place for the next H-1B filing period that start in April 2019, but many observers are skeptical it can be ready in time.

As for what the election means, expect to see the House conducting much more vigorous oversight of the immigration agencies including pushing back on many of the new restrictions stemming from BAHA. The House could also withhold funding connected with any of these measures, potentially setting up a showdown with the Senate and the White House that could result in a government shutdown.

And finally, there are suggestions that a deal could be reached, possibly in the next few months, governing the way employment-based green card applications are allocated. Under the current system, no more than 7% can go to nationals of any country. That’s led to decadeslong backlogs for Indian skilled workers. Doing away with this limit would dramatically shorten the wait for Indians.

Greg Siskind Siskind Susser, PC Immigration Lawyers gsiskind@visalaw.com www.visalaw.com

SOUTHWEST CHURCH OF CHRIST - JONESBORO

1 1 “Discipline, Termination, and Documentation” was Rick Roderick’s topic. 2 Abtin Mehdizadegan presented “Workplace Safety.” 3 Missy Duke discussed “Harassment Prevention.” 4 Jess Sweere’s presentation was on “Social Media.”

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IMMIGRATION LAWYERS The 2018-2019 Board of Directors of NEASHRM are (L-R) Linda Allison, 2018 Programs Director; Sonya Sanders, 2019 Programs Director; Dewayne Douglas, 2019 President; Kinyata Gray, 2018 Communication Director; Donna Carter, 2018 President; and Ashley Carter, 2019 Communication Director

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∞ Ways Organizations Benefit From Christmas Giving

By HARVEY DEUTSCHENDORF

It

is the season for us to enjoy the good feelings and blessings that come with the joy of giving to others. During the holidays we are very aware there are others that are less fortunate than us and we are encouraged to reach out and give. We have been taught that it is more blessed to give than to receive. Giving to others, especially to those who are in need, is seen as an act of selfless service which will reflect on us as better people.

All major world faiths and religions speak to the importance of helping those in need. The decision to help our fellow beings, more so at Christmas, allow us to feel better and meet our moral obligation to contribute to something larger than ourselves. There are also real benefits to organizations that do so as well.

Here are 5 reasons organizations will benefit from getting into the giving spirit at Christmas: Making Stronger Connections Within Their Own Organization and Improve Company Culture Contribute to a worthwhile charity at Christmas where employees feel better about themselves and strongly support the organization they work for. This demonstrates to staff that the organization has a moral conscience and cares about more than turning a profit. Getting away from the office or working on a project that is drastically different, allows people at work to come, see and experience each other in a new and different light. Kerry Alison Wekelo, managing Director of Human Resources and author of Culture Infusion states, “When your people take part in activates for a social cause, they get to know their co-workers and hone their teamwork skills while giving back to their communities and other organizations that have a positive impact on our world. At the same time, your company’s overall culture is enhanced, especially when these activities are also aligned to individual, team, and corporate goals.”

Ability to Learn New Skills and Form New Perspectives Getting out of the office and working with fellow employees and management gives everyone a chance to try on new skills and learn in a relaxed non-stressful environment. There may be opportunities to work with others who have different and divergent skill sets and to interact with people from different departments. There may be opportunities to get to know people from broader varieties of cultural and socio economic backgrounds than at work, giving staff a wider scope and more diverse perspective to expand their overall knowledge.

Gain a Greater Degree of Empathy and Gratitude Reaching out and coming into contact with people who have a lot less than us increases our empathy for others. We recognize and feel grateful for what we do have. While sometimes we do not appreciate our job and complain about it, we may feel a sense of gratitude and realize that we are fortunate to have the work; realizing that there are many who don’t have the same opportunities as we do and would love to trade places with us. This awareness may cause us to rethink our relationships in and outside of the workplace. It could lead to more appreciation and to us focusing more on the positives of the workplace rather than constantly looking for what is wrong or lacking.

Adds Energy, Fun and Breaks Up Routine There is a saying that "A change is better than a rest." Most workplaces can and do get caught up in boring, monotonous routines at times. The longer that practice becomes the norm, the more comfortable it becomes and the more difficult it is to break out of the rut. To do something totally outside of the usual, like helping a charity, breaks the chains of routine and allows people to release their normal restriction, be themselves, have fun, feel renewed energy and a sense of purpose. This is a great way to revitalize an organization while contributing to a worthwhile cause.

Makes Stronger Community Connections Doing volunteer work or contributing money (or items) for the needy at Christmas is an act of charity. An organization accomplishing goals in this manner will be seen as a group who cares about their community and sees their responsibility to give back. There is the opportunity to meet and make valuable connections outside the company that can benefit this group or the individuals within it. Seeing that their organization is leading by example, employees are likely to feel more connected with those in their immediate workplace, as well as those at work that are outside of their normal work environment. Volunteering during work hours can bring together upper management with front line workers and other groups that rarely communicate and have the chance to work with each other. Sharing a joint experience as equals towards a worthy cause and belief is a great way for various levels in an organization to get to know and appreciate one another outside of the formal constrictions imposed in the workplace structure.

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Harvey Deutschendorf is an emotional intelligence expert, internationally published author and speaker. To take the EI Quiz go to theotherkindofsmart.com. His book THE OTHER KIND OF SMART, Simple Ways to Boost Your Emotional Intelligence for Greater Personal Effectiveness and Success has been published in 4 languages.

Harvey writes for FAST COMPANY and has a monthly column with HRPROFESSIONALS MAGAZINE. You can follow him on Twitter @theeiguy.

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