July 2015 issue

Volume 5 : Issue 7 TM

www.HRProfessionalsMagazine.com

Top

The

Cadillac Tax Not Just for

‘‘Luxury’’

Educational Programs for HR Professionals

Health Plans

Wellness Incentives

Are Here to Stay…

More Carrots…

Fewer Sticks!

Preview of

SHRM Fall Conferences

Wayne

Cascio, Ph.D, Chair

SHRM Certification Commission

Don’t Let the

EEOC’s Rule on Wellness Programs Make You Sick!

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

YOU’RE REALLY SHOWING OFF YOUR BEST ASSETS TODAY.

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

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

What you don’t hear can still hurt you.

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

1715 Aaron Brenner Drive • Suite 312 • Memphis, TN 38120 • 901.526.0431 www.laborlawyers.com

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Bringing Human Resources & Management Expertise to You

57%

of HRCI certified professionals were promoted within the first five years of employment www.HRProfessionalsMagazine.com Editor

Cynthia Y. Thompson, MBA, SPHR Publisher

The Thompson HR Firm HR Consulting and Employee Development Art Direction

Park Avenue Design Contributing Writers

Bruce E. Buchanan Dale Conders, Jr. Shannon DeMaree Harvey Deutschendorf Jennifer Hagerman Joshua Hawkins Mark Holloway Bruce Johanson Randy Jones Cindy Kolb Courtney Leyes George Loveland, II Christy Showalter Billy Sims Board of Advisors

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

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

HR Professionals Magazine is published every month, 12 times a year by the Thompson HR Firm, LLC. Reproduction of any photographs, articles, artwork or copy prepared by the magazine or the contributors is strictly prohibited without prior written permission of the Publisher. All information is deemed to be reliable, but not guaranteed to be accurate, and subject to change without notice. HR Professionals Magazine, its contributors or advertisers within are not responsible for misinformation, misprints, omissions or typographical errors. ©2011 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 Profile: Wayne Cascio, Ph.D, Chair of SHRM Certification Commission 12 Don’t Let the EEOC’s Rule on Wellness Programs Make You Sick!

14 The Cadillac Tax Not Just for “Luxury” Health Plans 22 Wellness Incentives are Here to Stay…

More Carrots…Fewer Sticks?

24 Selecting the Right Partners for Managing Your Employees’ Wellness and Health Plan 27 Top Educational Programs for HR Professionals

WEB EXCLUSIVES 7 Habits of Highly Influential People

BY HARVEY DEUTSCHENDORF

HTTP://HRProfessionalsMagazine.com /Exclusive

Departments

10 Religious Evangelizing in the Bible Belt Workplace 16 An Analysis of EEOC v. Abercrombie and Fitch 18 Tennessee Protects Employees From Discipline And Discharge For Having Firearms In Their Vehicles While At Work 20 Health Care Reform: Day-to-Day ACA 32 Sixth Circuit Provides Useful Guidance on Attendance and ADA Accommodation 36 Best Practices for Compensation Management Part 2 38 Highlights of MSBGH Healthy Workplaces, Healthy Communities 2015

Industry News

6 Preview of 31st Annual KYSHRM State Conference in Louisville September 23-25 7 Preview of TNSHRM State Conference in Chattanooga October 7-9 8 SHRM-Memphis HR Excellence Awards in Memphis September 9 34 Preview of ARSHRM Employment Law and Legislative Conference in Little Rock September 17-18

Next Issue Retirement Planning and Compliance Highlights of 2015 SHRM Conference in Las Vegas June 28-July 1 Previews of SHRMGA Conference, ARSHRM ELLA Conference, KYSHRM Conference, SHRM-Memphis HR Excellence Awards, and TNSHRM Conference www.HRProfessionalsMagazine.com

3

a note from the Editor

W

hich HR degree programs are most highly regarded in our respective industries? Which HR certification programs should we pursue – HRCI or SHRM, or both? In this issue you will have the opportunity to read about some of the top educational programs for HR professionals in Tennessee, Kentucky, Arkansas, and Mississippi. You will also learn about HRCI and SHRM certification programs.

panel of experts for the HRO Partners Business Trifecta on May 21 at the Great Hall in Germantown as we explored the topic of wellness, employee engagement and the bottom line.

We are so honored to have Wayne F. Cascio, Ph.D, on our cover this

And watch your email for our next complimentary HRCI | SHRM Virtual Event sponsored by Data Facts on July 28. If you are not currently receiving our monthly invitation, you can subscribe on our website at www.hrprofessionalsmagazine.com or send me an email.

month. Dr. Cascio is Chair of the SHRM Certification Commission and has authored or edited 28 books on human resource management. I have taught HR Management classes using his textbooks for years.

We are excited to be an official media sponsor of the 2015 SHRM Conference and Exposition in Las Vegas on June 28-July 1! If you are unable to attend the Conference, please follow me on Twitter @ cythomps, as I will be tweeting from the Conference about the exciting events and speakers. We will also provide daily updates on Facebook and LinkedIn. Watch for highlights in our August issue.

I’m sure that every HR professional would agree with me that he is an HR icon of our time. You can imagine my delight when he agreed to be on our cover this month! I know you will love reading about his exciting career on Page 4.

We are also featuring wellness in this issue. You will find several articles

Editor | Publisher cynthia@hrprosmagazine.com

on this important topic in this issue as well. It was exciting to be on the

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HR

PAYROLL

TALENT MANAGEMENT

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Highlights from

HROpartners

The Business Trifecta

Judy Bell, PHR, SHRM-CP, was the moderator and introduced Keynote Speakers Mike Edwards and Robert Shaw.

(L – R) Robert Shaw, Jr., CEO, Paragon Bank; and Michael Edwards, President and COO, Paragon Bank. Their Keynote topic was “The Culture of Well-Being.”

(L – R) Panelists included Cynthia Thompson, Donna Tosches, Director of Methodist Le Bonheur Healthcare EAP and DHJ Living Well Network; and Cristie Upshaw Travis, CEO of Memphis Business Group on Health.

Wayne on the cover

F. CASCIO

WAYNE F. CASCIO, Ph.D. Chair of SHRM Certification Commission

Dr. Cascio earned his B.A. degree from Holy Cross College, his M.A. degree from Emory University, and his Ph.D. in industrial/organizational psychology from the University of Rochester.

Wayne F. Cascio is a Distinguished University Professor at the University of Colorado, and he holds the Robert H. Reynolds Chair in Global Leadership at the University of Colorado Denver. He has served as president of the Society for Industrial and Organizational Psychology (1992-1993), Chair of the SHRM Foundation (2007), the HR Division of the Academy of Management (1984), and as a member of the Academy of Management’s Board of Governors (2003-2006). From 2007-2014 he served as a senior editor of the Journal of World Business.

He has authored or edited 28 books on human resource management, including Short Introduction to Strategic Human Resource Management (with John Boudreau, 2012), Investing in People (with John Boudreau, 2nd ed., 2011), Managing Human Resources (10th ed., 2015), and Applied Psychology in Human Resource Management (7th ed., with Herman Aguinis, 2011). He is a two-time winner of the best-paper award from the Academy of Management Executive for his research on downsizing.

In 1999 he received the Distinguished Career award from the HR Division of the Academy of Management. He received an honorary doctorate from the University of Geneva (Switzerland) in 2004, and in 2008 he was named by the Journal of Management as one of the most influential scholars in management in the past 25 years.

In 2010 he received the Michael R. Losey Human Resources Research Award from the Society for Human Resource Management, and in 2013 he received the Distinguished Scientific Contributions Award from the Society for Industrial and Organizational Psychology. From 2011-2013 he served as Chair of the U.S. Technical Advisory Group that is developing international HR standards, and he represented the United States to the International Organization for Standards. Currently he serves as Chair of the SHRM Certification Commission. Dr. Cascio is an elected Fellow of the National Academy of Human Resources, the Academy of Management, the American Psychological Association, and the Australian HR Institute. His work is featured regularly in business media, including The Wall Street Journal, Newsweek, Time, The New York Times, National Public Radio, and Harvard Business Review, among others. ď Ž

www.HRProfessionalsMagazine.com

5

presented by

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23rd Annual

Chattanooga, TN October 7-9, 2015

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SPACE IS LIMITED

Conference and Exposition We welcome you to be a part of the 23rd Annual Tennessee SHRM Conference and Exposition that will be hosted by the SHRM Chattanooga Chapter, an affiliate chapter of the Society for Human Resource Management. This exciting, educational event will afford attendees the opportunity to learn and network with over 600 HR professionals from across the state and surrounding areas.

Dan Pink

Thurs., Oct. 8th General Session

Jake Greene

Steve Gilliland

Chip Madera

General Session

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Thurs., Oct. 8th

Fri., Oct. 9th

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The theme of the conference has allowed for the development of keynotes and sessions that will truly educate attendees. This year's event will embrace all the emerging trends that impact HR professionals. As an attendee you will have the opportunity to visit with over 100 exhibitors that will display their company's latest products and services oriented toward the needs of the HR Professional. And, we haven't forgotten to add in some fun with receptions and social events!

We are pleased to be serving as your conference committee and happy to bring you this exceptional Conference.

Frances Flowers, SPHR Conference Co-Chair

Valerie Gifford, SHRM-SCP, SPHR, CEBS Conference Co-Chair

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7

AWARD CRITERIA

SHRM-Memphis Human Resource Excellence Awards The SHRM-Memphis Chapter is happy to host its inaugural Human Resource Excellence Awards in the great city of Memphis, TN. The awards ceremony will be held on September 9, 2015 from 7:00 am - 9:30 am at the Holiday Inn - University of Memphis. The SHRM - Memphis Human Resource Excellence Awards will offer an exciting opportunity to recognize organizations both large and small as well as individuals for outstanding human resource initiatives that significantly advance the field of Human Resource Management.

Here are a few areas of focus for the awards: • Executive of the Year • Emerging Leader • Human Resource Practitioner of the Year • Innovative Deployment of HR Technology • Student of the Year

IMPORTANT DATES May 4 July 15 August 17 September 9 September 11

Open for Entries Deadline for Entries Finalists will be contacted Winners Announced Memphis Business Journal Special Publication Released

WHY ENTER? • Showcase your organization’s excellence in people management – educate, motivate and inspire • Benchmark your company across the industry • Celebrate your hard work Special thanks to our presenting sponsors:

Our platinum sponsor:

8

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Our silver sponsor:

EXECUTIVE OF THE YEAR The Ogletree Deakins Executive of the Year Award recognizes an actively employed Human Resource executive in their organization with at least ten years of management experience. This person demonstrates consistent proven success and applies professional experience both inside and outside his/her organization.

EMERGING LEADER This award recognizes a rising star within the Human Resource function that has demonstrated significant impact to the field and has up to five years of experience in Human Resources. Judges will look for an individual that goes beyond conventional expectations, demonstrates innovative thinking to challenging business cases, and has a proven track record of working successfully in business situations not normally associated with those new to the profession.

It is also important to include measurable evidence that this individual stands out from their peer group.

HUMAN RESOURCE PRACTITIONER OF THE YEAR This award is given to an individual that has demonstrated significant impact to the Human Resource function. Judges will look for clear examples of implementation of strategy that directly contributed to the achievement of the organization, employed innovative and unique approaches to addressing key business issues and made quantifiable contributions to the overall business strategy of the organization.

INNOVATIVE DEPLOYMENT OF HR TECHNOLOGY This can be awarded to an organization or individual that has leveraged the use of technology to move the Human Resource function forward. This can range from efforts around the applications of any Human Resource software and analytic system, online recruitment, benefits administration, or e-learning programs. Judges will look for innovation, evidence of success, return on investment and examples of how the technology has strengthened the organization as well as the scale of the challenge.

STUDENT OF THE YEAR This award honors a Human Resource student, classified as a junior or higher, that has at least a 3.0 overall GPA, and volunteers with the local SHRM chapter. Judges will look for strong commitment to the profession by measurable factors such as quality of work, initiative, professionalism and unique contributions to Human Resources.

I’M

MORE

THAN MY JOB. I’M THE

HR teaches you to give feedback with EMPATHY.

FACE OF THE COMPANY.

My SHRM membership helps me examine HR situations as more than black or white. Local meetings and online forums provide an outlet for feedback, so I know I’m approaching issues with honesty and compassion. Online tools like sample policies and documentation templates help me put forth the best guidelines for our organization.

With SHRM, I’m a better HR practitioner and a better person.

Get more at shrm.org/more

Kristen Medlin, SHRM-CP

15-0382-KRISTEN/HRPro

Administrative Director of Human Resources Member since 2007

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9

“My Preacher Made Me Do It”

– Religious Evangelizing in the Bible Belt Workplace: Accommodate or Unlawful Harassment?

By COURTNEY LEYES

[ Author’s Note: Please note that this article solely focuses on your obligations under federal law. You may want to consult your legal counsel regarding any additional obligations you may have under your state and/or local laws.]

D

own South, it is no secret that many of us are deeply religious. Referred to as the “Bible Belt,” we have a workforce that is predominantly Judeo-Christian, and many are members of churches that encourage, if not require, their

members to evangelize, or proselytize – to “share the Word” with the world, which includes other employees in your workforce. This includes wearing shirts and buttons, sharing pamphlets, recruiting other members for church services and Bible studies, having religious quotes as part of e-mail signature blocks, etc. And not only is our workforce predominantly Judeo-Christian, but there are small businesses that have established Christian, family-oriented business cultures.

Personally, I have attended luncheons at a client’s workplace, where the luncheon was opened with prayer by management.

Where is the rub? While Title VII requires an employer (of 15 or more employees) to provide reasonable religious accommodations, which may include the proselytizing activities described above, Title VII also requires an employer to maintain a workplace free from unlawful harassment. If you are a public employer, your headache is about to get worse. If you are a public employer, not only must you strike the delicate balance between the requirement to reasonably accommodate and provide a workplace free from unlawful harassment, but you have constitutional obligations as well.

Public employers, under the United States Constitution (and their state’s constitution), are prohibited, under the Free Exercise Clause of the First Amendment, from “prohibiting the free exercise” of religion. The “exercise of religion” can include proselytizing. So how do employers, either public or private, strike this balance? To get to that answer, we must first examine briefly your obligations under the law. Then, we will examine some exemplar cases on both sides of the issue. And finally, I will provide you with some practical advice (which will include utilizing the policies you probably already have!), so that you can adequately address some real-life problems involving some form of proselytizing in your workplace.

10

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The Law As mentioned above, Title VII prohibits employers of 15 or more employees from discriminating on the basis of religion. These protections against religious discrimination apply equally to those who practice a non-theistic religion and to those who profess no religious belief. Torcaso v. Watkins, 367 U.S. 488, 495 (1961). Part of this prohibition includes an employer’s duty to maintain a workplace free from unlawful harassment. According to the Equal Employment Opportunity Commission, the federal agency charged with the duty to enforce Title VII, among other employment-discrimination statutes, religious harassment in violation of Title VII may occur when an employee is forced or coerced to dispel, alter or adopt a religious practice as a condition of employment, or when an employee is subjected to hostile and/or abusive comments or conduct that concern religion.

Unwelcome solicitations of religious practices and/or views (proselytizing) may constitute unlawful harassment under certain circumstances. To establish a religious-harassment claim, an employee must show that the harassment was: (1) based on his religion; (2) unwelcome; (3) sufficiently severe or pervasive to alter the conditions of employment by creating an intimidating, hostile, or offensive work environment; and (4) that there is a basis for employer liability.

In addition to the above, under Title VII, an employer must reasonably accommodate an employee whose sincerely held religious beliefs conflict with a work requirement, unless providing the accommodation would create an undue hardship. Under the recently decided EEOC v. Abercrombie & Fitch Stores, 575 U.S. ___ (2015) employers may be required to provide accommodations, even though an employee has not specifically asked for one.

And finally, if you are a public employer, prohibitions against religious expression in the workplace could constitute a violation of the Free Exercise Clause.

So what does all of this mean? Are employees prohibited from having religious quotes as a part of their e-mail signature blocks? What about employees who wear religious t-shirts to work or put up religious posters/ displays in their cubicles? Are you, as a small-business employer, now prohibited from starting meetings with a prayer? Are you required to permit an employee to proselytize during working hours?

The “Good News” For HR Professionals Breathe a sigh of relief, because the “Good News” for HR Professionals is that the answer to the above questions is: “not necessarily.” There have been very few cases addressing when religious proselytizing and/or other conduct in the workplace rises to the level of unlawful harassment/discrimination. In one case involving a car dealership owned by a staunchly devout Christian, the owner held optional daily prayer sessions. Additionally, the owner opened all meetings with a brief prayer and gave the plaintiff in that case, who was Jewish, a book advocating conversion to Christianity. The Court held that this conduct did not rise to the level of the extreme, abusive conduct prohibited by Title VII. But see EEOC v. Townley Eng’g & Mfg. Co., 859 F.2d 610, 615 (9th Cir. 1988) (holding that an employer must accommodate atheist employee by permitting him to opt out of worship services).

Further “Good News” is that there has been no court that has said that an employer, private or public, is required to accommodate an employee’s request to proselytize in the workplace, especially when that employee’s proselytizing impacts other employees and disrupts the employer’s business.

In a Fourth Circuit case, the appellate court upheld an employer’s termination of an employee for proselytizing at work. Specifically, this employee, an evangelical Christian, wrote a letter to her immediate supervisor telling him that “there were things he needed to get right with God.” She wrote a second letter to a subordinate who had just given birth to an out-ofwedlock child, stating: “you know what you did is wrong, so now you need to go to God to ask for forgiveness.” When the employer discovered these letters, the employer discharged the employee for exercising poor judgment, damaging her working relationships, and invading her co-worker’s privacy.

The employee claimed that she was required, by her religion, to preach the word of God to her co-workers, so her employer should have accommodated her beliefs. While the Court admitted that the employee’s beliefs were sincere, the Court stated that she did not seek the accommodation first. And, even if she had sought an accommodation, her activities in the workplace, which included accusing co-workers of immoral conduct, was not the sort of conduct that employers could accommodate without creating an undue burden on other employees. See Chalmers v. Tulon Co. of Richmond, 101 F.3d 1012 (4th Cir. 1996). A district court in Arizona likewise concluded that, even if an employee’s active recruitment of her subordinates for her Bible study was a core tenet of her religious beliefs, the employer is not required to permit that employee to impose her religious beliefs on her co-workers.

EEOC v. Serrano’s Mexican Restaurants, LLC (D. Ariz. Apr. 5, 2007).

Even in the public arena, the Second Circuit has held that an employer is not required to accommodate an employee’s proselytizing when such conduct would so unduly burden the employer that its efficient provision of services would be disrupted. Knight v. State of Connecticut Dep’t of Public Health, 275 F.3d 156 (2d Cir. 2001). In that case, there were two employees, who were born-again Christians, who had been proselytizing in the public workplace. One, a nurse consultant, told a man in the final stages of AIDS that God did not approve of his homosexual lifestyle. The other employee, a sign-language interpreter, openly prayed in an interpreting session at a state-run mental-health institution and encouraged patients to go to church and pray in another session. The employer disciplined both employees for their misconduct.

complaint alleging sexual harassment. Does the complaint involve a single comment? A single instance? Remember: it is an employer’s obligation to take reasonable steps to maintain a workplace free from unlawful harassment. If the complained-of conduct is unwelcome proselytizing, remember that you are not required to permit proselytizing at the expense of your other employees. “My preacher made me do it” is not a valid excuse under the law.

The rest of the conduct described above (starting meetings with prayers, religious displays in cubicles, etc.) is when things get a little tricky. The real gray areas relate to your employee who has religious quotes in his email block or the employee who wears a religious t-shirt to work one day.

Unfortunately, there are no “right” answers or magic formulas. There are a number of factors for you to consider such as the demographics of your workplace; the pervasiveness of the conduct; and whether the message would be offensive, objectively or subjectively. Certainly, a t-shirt saying, “I love God” is different than a t-shirt that states “God Hates Gay People.” Or having a crucifix displayed in one’s cubicle is different than a poster stating, “Repent or you will go to hell.” The latter examples are when “accommodations” cross the line and may be considered unlawful harassment. Finally, if you open meetings with prayers or have prayer services for your employees, make sure participation is strictly voluntary and you cannot retaliate against those who choose not to participate. These issues are not easy, so please consult with your legal counsel if you have any questions.

Courtney Leyes, Attorney Fisher & Phillips LLP cleyes@laborlawyers.com www.laborlawyers.co

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What Can an HR Professional Do? Regarding an employee’s proselytizing in the workplace, you can use your anti-solicitation policies to prohibit this conduct during work time.

Additionally, when faced with a complaint about an employee’s proselytizing, you should conduct an investigation, just as you would do in a www.HRProfessionalsMagazine.com

11

Don’t Let the EEOC’s Rule on

Wellness Programs Make you Sick!

By CINDY KOLB

What is a Wellness Program?

Many employers offer different programs and activities in connection with their group health coverage that promote a healthy lifestyle or seek to prevent disease. The purpose of the programs is not only to enhance employee wellbeing, but also to reduce health care costs. The programs generally take two different forms: 1) an assessment or screening of health risks that may look at and measure risk factors such as an employee’s blood pressure, body mass index or cholesterol; and/or, 2) activities to help employees achieve healthy lifestyles or meet health goals, such as smoking cessation or weight loss programs, healthy eating classes and providing exercise facilities at work.

Employers often encourage participation in these programs by offering incentives to employees. The incentives may be financial, such as offering a discount on the cost of employees’ health insurance premiums, or in-kind, such as prizes or time-off rewards. However, these “incentives” can sometimes act as penalties and raise concerns about the voluntariness of these programs. For example, CVS Caremark recently came under fire by employee and privacy advocates for introducing a program whereby employees who did not undergo a health review would have to pay an additional $600 per year as part of their health plan premiums.

Why is the EEOC Involved?

The Equal Employment Opportunity Commission (EEOC) put out a Strategic Enforcement Plan (SEP) to cover fiscal years 2013-2016. The SEP offers a peek into what areas the EEOC will direct its time and resources.

As part of its SEP, the EEOC adopted the priority of addressing “Emerging and Developing Issues.” One emerging and developing issue which the EEOC has already raised is whether employers’ wellness programs violate the Americans with Disabilities Act (ADA).

While the Affordable Care Act (ACA) encourages the development of wellness programs, the EEOC has concerns about whether the programs are in compliance with the ADA. In fact, the EEOC has filed a handful of lawsuits against employers under the ADA and the Genetic Information Nondiscrimination Act (GINA) for having “involuntary” wellness programs.

The lawsuits have focused on companies that have required biometric testing and health risk assessments for employees and their spouses as part of a screening to identify health risks. The EEOC has argued that plans where employees are penalized (or lose incentives) for not taking the tests or completing the assessments violate the ADA because employees are penalized in order to induce them to go through disability-related inquiries and medical examinations that are not job-related or consistent with business necessity. The EEOC has also claimed that such testing violates GINA because employees are penalized if their spouse does not complete 12

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the testing. In one case, the EEOC also brought a charge of retaliation against an employer when an employee who objected to a wellness program was later terminated.

Employers have been waiting for the EEOC to issue its proposed regulations on the impact that the ADA has on employers’ wellness programs.

According to the EEOC, the goal of the proposed regulations is “to address numerous inquiries EEOC has received about whether an employer that complies with regulations implementing the final Health Insurance Portability and Accountability Act (HIPAA) rules concerning wellness program incentives, as amended by the Affordable Care Act (ACA), will be in compliance with the ADA.”

Proposed Rule The EEOC issued a proposed rule on April 20, 2015, that would amend its 1991 regulations and interpretive guidance that implemented the ADA as they relate to employer wellness programs. Under the proposed rule, wellness programs are permitted as long as they are not used to discriminate based on disability. As explained in the EEOC’s fact sheet, the proposed rule sets forth the following requirements: * Wellness programs must be reasonably designed to promote health or prevent disease.

One thing to note here is a program that collects health information from an employee without providing feedback to the employee, or without using such information to design a specific health program, will not be considered as “reasonably designed.” * Wellness programs must be voluntary.

This requirement is the impetus for the EEOC’s regulations. The proposed rule identifies several requirements for participation in a program to be considered voluntary. As the EEOC sets out, an employer: “may not require employees to participate; may not deny access to health coverage or generally limit coverage under its health plans for non-participation; and, may not take any other adverse action or retaliate against, interfere with, coerce, intimidate, or threaten employees” (such as threatening to discipline an employee who declines to participate or does not achieve certain results). * Employers may offer limited incentives for employees to participate in wellness programs or to achieve certain health outcomes.

The maximum allowable incentive for participation, or for achieving certain health outcomes, is 30% of the total cost of employee-only coverage. This differs from the incentives allowed under HIPAA, as will be discussed further below. * Medical information obtained as part of a wellness program must be kept confidential.

One detail to note here is that the confidentiality requirements in the EEOC’s existing ADA regulations still apply, with one addition: generally, an employer may only receive medical information in aggregate form which does not, and is not reasonably likely to, disclose the identity of specific employees. * Employers must provide reasonable accommodations that enable employees with disabilities to participate and to earn whatever incentives the employer offers.

A wellness program may be in violation of the ADA if disabled employees are not provided reasonable accommodations that allow them to participate in the program. The EEOC gives a couple of examples: “an employer that offers an incentive for employees to attend a nutrition class must, absent undue hardship, provide a sign language interpreter for a deaf employee who needs one to participate in the class;” and, an employer “may need to provide materials related to a wellness program in alternate format, such as large print or Braille” for a vision-impaired employee.

Questions Remain While the EEOC states in the supplementary information to the proposed rule that it “has a responsibility to interpret the ADA in a manner that reflects both the ADA’s goal of limiting employer access to medical information and HIPAA’s and the Affordable Care Act’s provisions promoting wellness programs,” there are areas where the proposed rule differs from HIPAA requirements. The two main areas of difference are the allowed 30% incentive and the notice requirement.

HIPAA does not place any limits on incentives for participatory wellness programs, while the EEOC’s proposed rule, which places a 30% limit on incentives, applies to participatory wellness programs and to wellness programs that are health-contingent programs. Note, however, if the participatory wellness program does not require disability-related inquiries or medical examinations in order to earn the incentive, then the program is not subject to the proposed rule (i.e., if the incentive is offered for merely attending a healthy-eating class with no medical testing, the new incentive rules do not apply).

Another big difference from HIPAA is that HIPAA’s wellness provisions (as amended by the ACA) allow smoking cessation programs to offer up to a 50% incentive. This difference could lead to some strange results whereby participation in a smoking cessation program that does not test for the presence of nicotine can offer an incentive up to 50% of the cost of health insurance premiums, while a smoking cessation program that does test for the presence of nicotine would be subject to the limit under the proposed rule limiting the incentive to a 30% discount on health insurance premiums. Finally, unlike HIPAA, the 30% limit on incentives applies to employee-only coverage, not family coverage.

The other major difference is the notice requirement. Under the proposed rule, additional paperwork informing employees of what medical infor-

mation was obtained, how it will be used, who will receive it and restrictions on disclosure are required. Many commentators feel this will make it more challenging for employers who already have a difficult time getting employees enrolled in wellness programs.

Stay Tuned While employers have embraced wellness plans as a means to reduce health care costs, the absence of regulations from the EEOC on the impact that the ADA has on employers’ wellness programs created murky waters for HR professionals and employers to navigate. The EEOC offered a public comment period on the proposed rule, which closed on June 19, 2015, during which the EEOC set forth a number of areas on which it specifically requested comments, such as: reconciliation of the ADA’s “voluntary” requirement with the wellness program provisions of the ACA; should the proposed notice requirement also include an authorization evidencing knowing confirmation that the employee’s participation is voluntary when the program includes disability-related inquiries and/or medical examinations (yet more paperwork for employers); should the notice requirement only apply to programs that offer more than de minimis rewards or penalties and how to define de minimis; the extent to which the ADA regulations should limit incentives for wellness programs offered outside of a group health plan or insurance; and, what will be the practical effect of adopting the specific incentive limit.

Hopefully the EEOC’s proposed rule will ultimately offer some guidance for employers and HR professionals.

Cindy Kolb, Attorney Cross, Gunter, Witherspoon & Galchus, P.C. ckolb@cgwg.com www.cgwg.com

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13

THE CADILLAC TAX: Not Just For “Luxury” Health Plans

By SHANNON DEMAREE and MARK HOLLOWAY

In response to Congress’s belief that the unlimited, tax-free nature of healthcare results in inefficiencies and increased healthcare costs, the Affordable Care Act (ACA) includes an excise tax, which is scheduled to take effect in 2018. Called the Cadillac tax, it will be levied against employers who offer benefits programs that are deemed too “rich.” The intended result is two-fold: to slow the growth of healthcare costs and to generate revenue to help offset the $1 trillion price tag associated with the ACA. Because the implementation of the tax is less than three years in the future, it’s important for employers to focus on it today so you can begin determining how you’ll address the situation. This Benefits Insight & Guidance walks you through the potential impact of the tax and provides practical advice for how you can prepare your organization.

Implementation of the tax is less than three years in the future, so it’s important for employers to focus on it today.

While we use examples to illustrate the challenges related to the tax, we also acknowledge that most employers will attempt to design their benefits programs so as not to trigger the tax. This will likely result in employers doing away with health flexible spending accounts (FSAs) and pretax health savings account (HSA) contributions if they are brushing up against the tax thresholds.

When we project five and ten years into the future, the majority of our clients will eventually trigger the tax.

What Plan Values Will Trigger the Tax?

Are You Likely to be Affected?

Before we talk about the impact of the tax, let’s review the basics. The Cadillac tax is a 40 percent nondeductible excise tax on health benefits with values exceeding:

We looked at Lockton’s book of business to get an idea of how many of our clients have plans that could trigger the Cadillac tax, and just how they might be affected. Many employers believe their chances of triggering the tax are minimal, which may be true in the first year of the tax.

As the table at left illustrates, however, when we project five and ten years into the future, based on current guidance, the majority of our own clients will eventually trigger the tax.

❖ $10,200 for individuals in 2018, with future years indexed to the consumer price index (CPI).* ❖ $27,500 for “other than individual coverage” in 2018, with future years indexed to CPI. ❖ $27,500 for a multiemployer (union) plan (for single and family coverage) in 2018, with future years indexed to CPI. The tax calculation includes the value of major medical coverage, health reimbursement arrangements (HRAs), nontaxable HSA contributions, health FSA benefits (whether provided by an employer or the employee), and on-site clinics.

In calculating its tax liability, an employer can make a variety of adjustments to the threshold that applies to its plan, based on certain factors like age and gender, retiree status, and high risk professions.

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Factors Affecting Our Calculations Our calculations were made using an average 6 percent annual trend. Also, our calculations accounted only for medical premiums, and not the value of on-site clinics or account-based health plans. Accordingly, we were unable to account for contributions to FSAs, HRAs, and HSAs on the part of employer or employee.

When those amounts are added to the calculation, the percentages of Lockton clients triggering the tax will undoubtedly grow.

These calculations also assume our clients do not adjust their plans to avoid the tax, but proceed as they are today with benefits offerings.

Applying the Calculation:

What the Story Tells Us

A Sample Employer’s Story

When you apply the principles of the excise tax to a sample employer, several things become clearer:

To illustrate the complexity of the tax and the variety of factors that affect whether it will be triggered, consider fictional ABC Company.

ABC Company has one medical plan with a single rate of $600 and a family rate of $1,700 in 2015. There are 3,000 employees enrolled in the single plan and 2,000 enrolled in the family plan.

Assuming a trend rate of 6 percent per year until 2018, these funding rates are projected to be $715 for single and $2,025 for family (annually, that’s $8,575 single/$24,297 family). In 2018, the plan’s funding rates alone do not exceed the thresholds of $10,200 single/$27,500 family.

However, for any employee whose contributions to an FSA, HSA, or HRA total more than $1,625 for single/$3,203 for family, the thresholds will be crossed, and an excise tax will be triggered.

For example, let’s say employee John Smith enrolls in the medical plan for family coverage.

He also contributes $4,000 to his HSA. Therefore, the excise tax for John Smith is calculated like this: ($24,297 + $4,000 - 27,500) x 40%

$318.80 If we use 2018 funding rates and assume an annual trend of 6 percent out to 2023, we can project an annual cost of $11,476 for single/$32,515 for family. If the 2018 thresholds increase 2 percent a year until 2023, then the 2023 thresholds will be $11,261 single/$30,362 family.

That means in 2023, the excise tax will equal:

First, the 2023 excise tax will increase for any employee who makes contributions to an FSA, HSA, HRA, or other benefits-related account.

In addition, the prevalence and financial impact of the Cadillac tax depends on two factors: ❖ Any adjustments the final regulations allow to the threshold amounts. ❖ The rate of trend.

Plus, the impact of the final regulations (regarding the adjustments to the thresholds) will vary employer by employer.

How Trend Affects the Tax The rate of trend in healthcare cost is driven by the market, but it can be influenced at the employer level, too. In all of our examples and charts so far, we’ve assumed a trend rate of 6 percent. The percentage of Lockton’s clients who are projected to trigger the excise tax will change, however, if trend is higher or lower, as illustrated in this chart:

Cost Mitigation Strategies Now that it’s clear the Cadillac tax is something most plan sponsors need to keep an eye on, what should your organization do?

Job one is to find ways to lower the overall cost of your health insurance plan. Plan design changes must be considered. Such changes have limited value, however, because a plan change has a one-time financial impact and doesn’t help reduce trend.

Before the advent of the Cadillac tax, employers had the option to simply pass along a greater percentage of premiums to their employees as a strategy for lowering plan costs. In the context of the excise tax, which is calculated using a combination of contributions by employer and employee alike, this strategy becomes ineffective.

In an effort to avoid triggering the Cadillac tax, employers should consider all available options for reducing total plan costs. This includes an evaluation of various products and services (for example, network, pharmacy benefit manager, and stop loss insurance) to ensure they are the most cost effective, managing eligibility under the plan appropriately, evaluating the development of a private exchange, and exploring the impact of an outcomes-based Lockton Health Risk Solutions® program.

3,000 (enrolled in single coverage) x ($11,476 - $11,261) x 40% + 2,000 (enrolled in family coverage) x ($32,515 - $30,362) x 40%

For More Information

$1,980,000 (approximate)

❖ Outcomes-based Lockton Health Risk Solutions® programs.

Additional contributions made to an FSA, HSA, or HRA, or additional coverages that apply to the excise tax, will increase this amount.

Job one is to find ways to lower the overall cost of your health insurance plan.

Please contact your Lockton Account Team if you’d like to know more about: ❖ The impact of the Cadillac tax.

❖ Private exchanges.

Ashley Pace

Lockton’s Memphis Office 901 757 6902 apace@lockton.com

Brad Owens

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

www.HRProfessionalsMagazine.com

15

An Analysis of EEOC v. Abercrombie and Fitch Introduction

By DALE CONDER, JR.

Title VII prohibits prospective employers “from refusing to hire an applicant in order to avoid accommodating a religious practice that it could accommodate without undue hardship.” EEOC v.

Abercrombie and Fitch Stores, Inc., --- S.Ct. ---, 2015 WL 2464053 at *2. But must the applicant request an accommodation? In other words, must the prospective employer know that the applicant needs an accommodation?

Background Samantha Elauf is a Muslim, and in keeping with her faith she wears a hijab. Ms. Elauf applied for a job with the local Abercrombie & Fitch store, and she wore her hijab during the interview. Although she did well in the interview, her wearing of the hijab raised concerns it would violate A&F’s Look Policy. A&F uses its policy to project its desired store image. The policy, while not defining caps, prohibits employees from wearing caps.

The assistant manager who interviewed Ms. Elauf did not ask her about the hijab, but she correctly concluded that Ms. Elauf wore the hijab because of her religion. Because of the assistant manager’s concerns about whether the hijab violated the policy, she sought advice from the store manager.

She told the manager that she believed Ms. Elauf wore the hijab for religious reasons. The manager concluded that Ms. Elauf ’s hijab violated the Look Policy, and he directed the assistant manager not to hire Ms. Elauf. Ms. Elauf discovered that her wearing the hijab was a factor in A&F not offering her the job. The EEOC took up Ms. Elauf ’s cause and sued A&F for violating Title VII. The district court found in favor of Ms. Elauf on the issue of liability, and following a trial on damages only, the court awarded Ms. Elauf $20,000.00. A&F appealed the case to the Tenth Circuit and won.

The EEOC felt strongly enough in its position that it petitioned the Supreme Court to review the case.

Analysis As it should be in all cases interpreting statutes, this case begins and ends with the language of the statute.

Under Title VII it is unlawful for an employer (1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin; or (2) to limit, segregate, or classify his employees or applicants for employment in any way [that] would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.

42 U. S. C. §2000e–2(a). The first provision is the intentional-discrimination or disparate-treatment provision. The second provision is the disparate-impact provision. Title VII defines religion as including “all aspects of religious observance and practice, as well as belief, unless an employer demonstrates that he is unable to reasonably accommodate to an employee’s or prospective employee’s religious observance or practice without undue hardship on the conduct of the employer’s business.” 42 U. S. C. §2000e(j).

The EEOC argued that A&F violated Title VII by not hiring Ms. Elauf because of her religion.

According to the EEOC, A&F should have accommodated Ms. Elauf ’s wearing of her hijab. Title VII provides that “an unlawful employment practice is established when the complaining party demonstrates that race, color, religion, sex, or national origin was a motivating factor for any employment practice even though other factors motivated the practice.” 42 U. S. C. §2000e—2 (m). Under the facts of Ms. Elauf ’s case, the EEOC argued that Title VII prohibited A&F from (1) not hiring Ms. Elauf (2) because of (3) her religious practice of wearing a hijab.

But A&F argued that it had no obligation to make an accommodation because it had no actual knowledge of the Ms. Elauf ’s need for an accommodation, i.e., she did not tell A&F that she wears her hijab because of her religion.

The problem with A&F’s argument is the statutory language. Title VII, unlike some anti-discrimination statutes, does not impose a knowledge requirement. For example, the ADA “defines discrimination 16

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to include an employer’s failure to make ‘reasonable accommodations to the known physical or mental limitations’ of an applicant.” EEOC v. Abercrombie and Fitch Stores, Inc., --- S.Ct. ---, 20015 WL 2464053 at *3. Undeterred by the statute’s silence on the issue of a knowledge requirement, A&F wanted the Court to read such a requirement into the statute. But “knowledge” and “motive” are not the same thing.

And Justice Scalia explained the distinction:

Motive and knowledge are separate concepts. An employer who has actual knowledge of the need for an accommodation does not violate Title VII by refusing to hire an applicant if avoiding that accommodation is not his motive. Conversely, an employer who acts with the motive of avoiding accommodation may violate Title VII even if he has no more than an unsubstantiated suspicion that accommodation would be needed.

Id. Here, the statutory provision at issue prohibits “certain motives regardless of the state of the actor’s knowledge.” Id. In the Court’s opinion, Justice Scalia, however, reminds us that for the Court to adopt A&F’s argument and impose a knowledge requirement where Congress was silent, would require the Court to do the very thing that courts are not to do, i.e., usurp Congress’s role by adding words to a statute to produce what is thought to be a more desirable result. EEOC v. Abercrombie & Fitch Stores, Inc., --- S.Ct. ---, 2015 WL 2464053 at * 4. And this the Court would not do.

Conclusion The Court’s holding is that under Title VII an employer can be liable if one of the specified characteristics is a motivating factor in an adverse employment decision. It is the employer’s motive that matters, not the employer’s knowledge. Therefore, A&F violated Title VII because Ms. Elauf ’s wearing the hijab—a religious practice—was a motivating factor in her not being hired, and A&F did not make an accommodation.

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

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Tennessee Protects Employees From Discipline And Discharge For Having Firearms In Their Vehicles While At Work

By GEORGE W. LOVELAND, II

Overview The Tennessee General Assembly recently overwhelmingly passed, and Governor Bill Haslam signed into law, a bill that allows employees to store firearms in their motor vehicles parked in the employer’s parking area while they are at work. The bill, T.C.A. 50-1-312, effective July 1, 2015, prohibits an employer from discharging or taking any adverse employment action against an employee, who is otherwise in compliance with the new law, for having a firearm in his or her parked vehicle. The bill was designed to eliminate what was some apparent confusion regarding a 2013 Tennessee law, the so-called “Guns in Trunks” law (T.C.A. 39-17-1313(a).

For many years, Tennessee property owners have been able to prohibit firearms, including handguns, anywhere on their property. So long as the owner properly posted notices on the property that firearms were prohibited, it was a criminal offense, even for someone with a valid handgun carry permit, to carry a firearm onto the posted property. In 2013, however, Tennessee enacted T.C.A. 39-17-1313(a), which permitted the holder of a valid handgun carry permit recognized in Tennessee to transport and store firearms and firearm ammunition in the permit holder’s motor vehicle while on or using any public or private parking area, so long as certain specified storage requirements were met. Following the enactment of that law, conflicting opinions were issued by the Tennessee Attorney General’s office and the General Assembly’s Office of Legal Services regarding whether the law also prohibited an employer from discharging or disciplining an employee for having a firearm or firearm ammunition in his or her motor vehicle while the employee was at work, and the vehicle was parked in the employer’s parking lot. That conflict has been resolved by the passage of the new law as an addition to Tennessee’s employment statutes.

Provisions of the New Law It is apparent that the General Assembly wanted no confusion about the intent of the new law, which was to “fix the problem.” The statute first defines “employee” as a person who is being compensated for services provided for the employer, and defines “employer” as the recipient of those services. The statue then provides: No employer shall discharge or take any adverse employment action against an employee solely for transporting or storing a firearm or firearm ammunition in an employer parking area in a manner consistent with §39-17-1313(a).

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As stated above, T.C.A. 39-17-1313(a), the “Guns in Trunks” law, applies only to persons with valid handgun carry permits, so the new law protects only employees of the employer who have valid handgun carry permits. In addition, an employee with a valid handgun carry permit, must comply with the following statutory requirements: (1) The permit holder’s motor vehicle is parked in a location where it is permitted to be; and (2) The firearm or ammunition being transported or stored in the motor vehicle:

(A) is kept from ordinary observation if the permit holder is in the motor vehicle; or

(B) is kept from ordinary observation and locked within the trunk, glove box, or interior of the person’s motor vehicle or a container securely affixed to such motor vehicle if the permit holder is not in the motor vehicle.

Under the law, if an employee with a valid handgun carry permit complies with the provisions of T.C.A. 39-17-1313(a) but is discharged or suffers other adverse employment action because he or she has a firearm or firearm ammunition in his or her vehicle in the employer’s parking area, the employee can file a civil action against the employer. The employee must prove that the sole reason for the discharge or other adverse employment action was that the employee transported or stored firearms or firearm ammunition in his or her vehicle parked in the employer’s parking area. Remedies available to the employee include an injunction against the employer prohibiting future acts in violation of the statute and economic (not punitive) damages, plus attorney fees and costs. The lawsuit must be brought in Chancery Court in Tennessee within one year from the date of the adverse employment action.

The new law applies to all Tennessee employers, regardless of the number of their employees. To protect employers from collateral liability, the statute provides: The presence of a firearm or ammunition within an employer’s parking area in accordance with §39-17-1313(a) does not by itself constitute a failure by the employer to provide a safe workplace.

In addition, to preclude the extension of protection beyond an employer’s parking area (and to continue the employer’s long-standing right to prohibit firearms elsewhere on its property) the statute provides: Except as otherwise provided in §39-17-1313(a) for parking areas, nothing in this section shall be construed as prohibiting an employer from prohibiting firearms or firearm ammunition on the premises of the employer.

Most Firearm Activities on Employer’s Property Still Prohibited The protections afforded by the new law are limited to employees of the employer who hold valid handgun carry permits, and who store their firearms or firearm ammunition as required in their vehicles parked in the employer’s parking area. Thus, an employer still may discipline or discharge any employee for possessing a firearm or firearm ammunition anywhere on the employer’s property outside the employee’s motor vehicle. Similarly, the employer may discipline or discharge any employee who does not have a valid handgun carry permit for having firearms or firearm ammunition anywhere on the employer’s property, including in the employee’s motor vehicle parked in the employer’s parking area, regardless of how those items are stored.

Because T.C.A. 39-17-1313(a) applies only to “a firearm or firearm ammunition in the permit holder’s motor vehicle,” an employer may ban firearms or firearm ammunition from company vehicles, including any vehicle operated by an employee with a valid handgun carry permit. Finally, since the new law applies only to “employees,” the employer can prohibit non-employees from possessing firearms or firearm ammunition anywhere on the employer’s property. Thus, even though a person who holds a valid handgun carry permit lawfully may store firearms and firearm ammunition in his or her motor vehicle while on or using any public or private parking area, the new law does not prohibit employers from banning that activity by non-employees on their property.

Policy Revisions Necessary As of July 1, 2015, the effective date of the new law, employers with policies that prohibit firearms and/or firearm ammunition anywhere on their property will have to revise those policies to allow a narrow exception for employees with valid handgun carry permits to store such items in their parked vehicles as mandated by the new law. Generally, a revised (or first time) policy should include, among other things: (1) a description of what is allowed and what is required for permitted storage of firearms and firearm ammunition in the employer’s parking area; and (2) a requirement that the employee with the valid handgun carry permit have the permit in his or her possession at all times while the items are stored in his or her vehicle (and that the permit be provided upon request).

George W. Loveland, II, Shareholder Littler - Memphis Office gloveland@littler.com www.HRProfessionalsMagazine.com

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Day-to-Day

ACA

S

By CHRISTY SHOWALTER

Should insurance coverage be terminated and COBRA offered when an employee converts from full-time (FT) to part-time (PT) status or exhausts FMLA? Can rehired employees be required to satisfy a new waiting period before health benefits are reinstated? While these decisions have historically been left to the discretion of the employer, the enactment of the Affordable Care Act (ACA) and this year’s enforcement of pay or play regulations for Applicable Large Employers (ALEs) have created new rules. The ACA’s methods for defining and measuring FT status have significantly complicated the day-to-day benefit administration process for HR professionals, often impacting existing policies for determining eligibility for health coverage – with mistakes potentially resulting in unintentional penalties.

The ACA’s mandate that ALEs offer health insurance to all FT employees – those averaging 30 or more hours per week - or potentially pay a penalty appears to be relatively straightforward.

The application, however, of the two permissible measurement methods for calculating average hours of service is anything but straightforward. Has your organization affirmatively selected a method to determine FT status? Are you using the default monthly measurement method, under which you review hours of service and determine eligibility for benefits on a month-tomonth basis? Or are you using the look-back method, under which you measure hours over a historical period of time (the “measurement period”) to determine eligibility for benefits over a future period (the “stability period”)? Your choice of measurement method along with the ACA’s general guidance on employee classifications directly impact how benefits should be handled following a change in status, during a leave of absence or subsequent to rehire.

Changes in Status

Prior to the ACA, when an employee had a reduction in hours, this change from FT to PT status generally resulted in a loss of eligibility under the group health plan. HR professionals understood to terminate coverage and offer COBRA following such a change. Post-ACA, however, the answer may not be as simple. If your organization has elected to use the look-back measurement method and if this employee is currently in a stability period, then the employee may retain eligibility for coverage even following the change to PT status.

Remember that a fundamental premise of the look-back method is that FT employee status and eligibility for health coverage is based upon hours of service in the prior measurement period.

Provided the employee averaged 30 or more hours per week during this time, the employee generally remains eligible for coverage through the end of the current stability period, regardless of whether the employee experiences a change in employment status. As with many provisions in the ACA, there are exceptions to this general rule; however, when administering an employee’s change in status, you may want to ask: What measurement method applies to this employee?

If the look-back method applies, is this employee in a stability period? If so, the reduction in hours will not usually result in a loss of eligibility or a COBRA event – at least through the end of the stability period. Of course, you may still require timely remission of the employee’s share of the health premium but must generally provide at least a 30-day grace period for payment.

In contrast, if your organization is using the monthly measurement method, then it is business as usual. If the employee works less than 130 hours per month, there is generally a resulting loss of eligibility for coverage and a COBRA qualifying event.

Continuation of Benefits During a Leave of Absence The determination of how long benefits should be continued during an employee’s leave of absence has always been based on a series of factors: Is the employee’s leave protected by FMLA or other state regulation that provides for continuation of benefits? How long has the insurance or reinsurance carrier agreed to continue benefits under the contractual terms of the 20

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plan documents? Does the employer have an internal policy or precedent addressing the length of time during which benefits may be continued? Now the ACA has obscured this analysis even further by adding an additional consideration: Is the employee in a look-back stability period?

As described above, if an employer has opted to use the look-back measurement method, an employee’s determination of FT status and corresponding eligibility for health coverage will be based on hours of service averaged over the prior measurement period. An employee’s leave of absence during the current stability period – even leave extended following the exhaustion of FMLA – will not generally impact eligibility for benefits through the end of that stability period. Of course, unpaid non-FMLA leave may impact the employee’s hours of service during the current measurement period, affecting eligibility for benefits during the subsequent stability period. Keep in mind that unpaid FMLA is considered “special unpaid leave” and is included in the calculation of hours of service under the look-back method.

Rehires While some employers have historically offered prior service credit and waived benefit waiting periods for employees who were rehired within a specified period of time, others did not and required rehires to satisfy new waiting periods before becoming eligible for benefits. This is another area in which the ACA has impacted the day-to-day administration of health plans.

Under the ACA’s general rule for both the monthly and look-back measurement methods, only employees who are not credited with an hour of service for a period of at least 13 consecutive weeks (26 weeks for educational organizations) preceding the return to employment may be treated as having terminated employment and having been rehired.

These employees may be treated as new hires and required to complete a new waiting period or initial measurement period prior to becoming eligible for benefits.

Alternatively, employees returning from a break in service of less than 13 weeks must generally be treated as a continuing employee. If the employee previously qualified for coverage or was in a current stability period, coverage should be offered by the first day of the month following rehire.

Policy Review Have your internal policies been updated to reflect these new guidelines regarding eligibility for benefits? Have your carrier documents, such as your insurance certificates, been revised to reflect extended eligibility under stability periods, to address rehires and to remove contractual terms that may be in conflict with ACA requirements (such as mandatory loss of eligibility following exhaustion of FMLA or waiting periods for rehires)? Work directly with your benefits advisor to address these day-to-day administrative processes and reduce your exposure under the ACA.

Christy Showalter, JD, MBA Certified PPACA Professional Senior Human Resource Consultant Regions Insurance, Inc. christy.showalter@regions.com

Have Questions? Let’s talk.

When it comes to securing the right answers to comply with the Affordable Care Act, who you ask can be every bit as important as what you ask. Let the ACA-trained professionals of the Regions Insurance Client Resource Team provide the guidance you need to steer your organization in the right direction.

Tom Hayes

Katrina McKinney

Employee Benefits Practice Leader tom.hayes@regions.com 479-684-5259

Sales & Marketing Coordinator katrina.mckinney@regions.com 205-264-7177

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Wellness Incentives are Here to Stay…

More Carrots…Fewer Sticks…?

By RANDY JONES

Wellness incentives have become one of the “hottest” topics in benefits news lately.

• In recent months three major lawsuits have been file challenging the legality of “Outcome Based Incentive” programs.

• Challenges by a group of consultants to the claims that there is ROI associated with wellness programs implemented at the worksite are completely untrue.

What’s the real truth?

False Claims Like most stories, the truth falls somewhere in the middle. Many reps have jumped on the “band wagon” selling wellness as a cost saving strategy, guaranteeing ROI. I caution you…BUYER BEWARE! Another group of researchers has identified a condition called “wellness syndrome” which they describe as a stressful condition brought about by wellness obsession that have been created by employers wanting to IMPROVE the health of their employees. This includes fitness trackers that notify us if we don't move enough, phone apps that collate data on our exercise, sleep and diet – things we must monitor to ensure we're doing them all correctly....and if we don’t do them all, we are failing.

Do we all really need that type of added stress!

Justifying Wellness

2) I ncentives that drive participation identify MORE people who need help, which has the potential to impact costs.

3) D o incentives actually help improve health status? At this point, that has NOT been proven. The other point… there is no consistent data on positive vs negative rewards. It depends on your population.

You just have to “pick a side”. I choose incentive. The more people I can engage, the more potential I have to impact change. The key here is know your population.

If you’ve tried carrots and people don’t respond, try sticks and see if more people show up! . Other employers may see just the opposite.

Carrots get their people to play. You just need to get started.

Find a wellness partner that understands incentives and how they can be customized and delivered to your workforce.

EEOC UPDATES INCENTIVES LAW! Many employers still want to implement contingent incentive programs. Once again, the federal government has floated another “trial balloon” of proposed upgrades/modifications with their release in April of “RULES to CLARIFY Applicability of ADA to Worksite Wellness”.

Most employers were just beginning to grasp the basic five rules of contingent incentives, get programs planned, constructed and fully implemented with 3 to 5 years of goals. Then we get more proposed changes: Here is a quick summary:

For most companies, wanting to get their program accepted, they must get their program off to a great start quickly or fear losing future resources. The problem…ROI takes at least two to three years but participation can be measured today!

1) Changes to the limits of rewards

Employers have been providing wellness for 30 plus years and most got into wellness because someone high up in the organization felt it was the right thing to do. They didn’t need data. Their logic… employees that are healthier, typically are happier, and should be more productive. Long term this may translate into cost savings. Today that is just not good enough!

• 3 0% limits now apply to both participatory programs involving biometric screens, HRA’s and outcomes based programs.

WHY WELLNESS TODAY!

• S pecial tobacco rules…if you test, limits are 30%, if your ask, 50% limit applies.

The reasons that most companies do wellness are wide and varied. One recent 2015 study of 500 plus employers identified the top three reasons their company provided wellness…

1) Health Cost Savings’ 40% 2) Engagement of employees 33% 3) Improving health outcomes 19% Less than 20% were looking for improved health, while 40% want cost savings. Something here is just not connecting.

Another national study showed that ONLY about 25% of the companies doing wellness are collecting the data necessary to actually try and show any type of positive financial outcome. Most small companies don’t have the resources to run a study, and can’t access their health care cost data.

Are Incentives Necessary?

For companies trying to justify their existence early on in the life cycle of a program, engagement is one of the first things you can measure. The better the participation, the better chance you have of impacting higher number of employees. The more people who play, the better chance the program survives!

Incentives today have becomes almost a necessary evil of most employer based wellness programs. A 2015 national study identified a number of facts related to incentives: • over 85% were offering some type of wellness program • over 50% provide a tobacco non-use incentive • 26% reward meeting health risk targets • 60% offer some type of health insurance premium discount or penalty

•L imit incentives to 30%, down from 50% if tobacco was included.

• 30% limit applies to both financial & in-kind awards (ie time off, prizes)

• 3 0% limit is based on cost of individual employee, spouse double rule is out 2) Employers can’t limit or deny NON- PARTICIPANT’s access to health plans 3) If programs collect medical information, they must DISCLOSE and COMMUNCATE what will be collected & how it’s used.

4) Employers & Vendors MUST PROTECT confidentiality of all health information collected, while following all HIPAA rules.

5) Employer & Vendors MUST have clearly stated privacy policies.

6) Programs MUST be reasonably designed to PROMOTE HEALTH and/or PREVENT disease.

7) Employers MUST provide reasonable accommodations.

8) Compliance with ADA, doesn’t mean compliance with all laws.

Whether we provide a worksite based wellness program or deliver services though our Memphis based LIFESIGNS clinic, our goal is help employers design & implement targeted, HIPAA compliant, medically based health risk identification & health improvement programs.

• 61% offered a minimum incentive of $250 dollars or higher each year.

Do Carrots Work Better than Sticks?

Here’s what we DO know about incentives..

1) Incentives DO improve participation. One national study showed that 18 % of employees completed HRA without, and 63% completed with an incentive…a 250% increase.

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www.HRProfessionalsMagazine.com

J. Randy Jones MPH, CHES Director Wellness Program Strategies Lifesigns/Prevention Group rjones@preventiongroup.com

The New Standard for Corporate Wellness

Selecting the Right Partners in Managing Your Employee Wellness and Health Plan

and we select effective partners. We must also as employers “in-source” our health and wellness efforts by changing our climate and culture of health in our workplace(s). As part of this process, we must also train and develop our leadership and management teams to support these efforts by knowing more about how a healthy workplace can improve performance and productivity and moderate the cost of health care.

By BILLY SIMS

HEALTH CARE SUMMIT On October 13th, the Mississippi Business Group on Health (MSBGH) in collaboration with Mississippi College’s School of Business will host the 6th Annual Health Care Summit. This event brings together employers, health care providers, health plans, brokers and consultants, as well as elected officials. Previous year’s attendees have stated that the summit is the best program in the state to learn about employer health and health care trends and solutions. I encourage you to mark your calendar for this year’s event and check the MSBGH website, www.msbgh.org, for more information in the coming months.

I am convinced that if one does not have the “right partners” in the future to help manage their health plan, they will have no choice but to move to a Defined Contribution (DC) plan and move their employees to an exchange.

In the end this may be the trend, much like Defined Benefits (DB) plans, to get employers out of the risk and liability of self-insured health plans.

There is a movement of fully insured groups moving to self-insurance for their health plan. You also hear more about self-insured groups having more large claims especially in pharmacy spend. It is very clear that change is upon us and as HR professionals, we must plan our offerings and select our partners with more scrutiny towards value.

PARTNERS Knowing the characteristics of good partners and the expectations you need from them can help you in putting together an effective team of vendors. We have to think differently on how we manage the team and get them to work together to build an integrated approach to managing the cost of employer health and health care.

Some key players and the qualities needed to be a positive partner are: 1. Brokers/Consultants must understand the changing world of employer health and healthcare and what the real difference makers are today.

2. Third Party Administrators (TPAs)/Insurance carriers must have up to date, robust technology capabilities with a positive, timely customer service commitment to make the complicated world of healthcare easier to navigate. They must also be committed to strong case management and disease management programs.

3. Onsite clinic vendors must have more than a “down in the weeds” approach. Must have a really strong group of clinicians that have great communication skills, focus on disease management and quality care to bend the curve in health cost and quality. This is a very powerful partnership if done correctly.

4. Wellness program vendors must be more than an online portal to health information and tools. Knowing that there is not a sole provider that can do it all, you must put the team of vendors together to help you offer a variety of programs to attract and engage participants.

5. Your employees and dependents must take accountability and responsibility for their actions. About 75% of our illnesses are the result of what we do to ourselves (self-care and lifestyle behaviors). We as employers must engage the workforce and their families to a higher standard of taking care of their health through our communications and wellness programs.

I believe we have a “fighting chance” to continue to provide a quality health program at an affordable cost if we have the right focus, access to our data 24

www.HRProfessionalsMagazine.com

MSBGH The Mississippi Business Group on Health is a learning organization which is driving change in Mississippi’s employer health and health care sector.

Members of the MSBGH are learning from national experts on how to build effective partnerships along with knowing what criteria employers should use when selecting and effectively using vendors. Members are also working in collaboration to build new models of health care delivery to improve access to quality care and to gain greater health outcomes thereby showing a value of investment.

I truly believe that employers in Mississippi can be the catalyst to change the health care system to provide greater results. Our coalition of employers and industry partners is making a difference by bringing together the key stakeholders to discuss and develop innovations that address the core issues with health costs. In fact, the MSBGH is seen as a safe venue for which to have discussions and to develop current and future solutions to the health cost crisis. The leadership from a group of hospitals in Mississippi has reached out the MSBGH to help design the future system using value-based designs and value-based benefits. These discussions are helping both employers and health care providers understand each other’s concerns and needs so that the system of service and payments are more closely aligned.

In the past few months, the MSBGH has offered a Specialty Pharmacy event and the Healthy Workplaces Healthy Communities conference which brought together Human Resource and Employee Benefits professionals together to learn about pharmacy solutions and how employers can be catalyst for change in the communities where they operate. The MSBGH collaborates with the MS SHRM Council and many of the local chapters to provide high quality experts to assist the HR professional with the latest in best practice and innovation. As you can see, we are about collaboration and shared solutions. The HR Professionals Magazine is one of the best resources for the human resource professional to be exposed to great resources and I am proud to support their efforts.

All in all, it is going to take all players in the system to work together for real solutions. Health plans, health providers, employers, consultants, third party administrators, and consumers need to become more knowledgeable, find ways to reduce waste, and engage in sound consumer principles to bend the cost curve.

Billy Sims VP Human Resources Southern Farm Bureau Life Insurance Company and President Mississippi Business Group on Health bsims@sfbli.com

6

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University of Memphis The Department of Management in the Fogelman College of Business and Economics at the University of Memphis offers AACSB-accredited training in human resource (HR) management and organizational behavior. The following faculty have an expertise in these areas: Carol Danehower, Alex Rubenstein, Chuck Pierce, Bob Renn, and Bob Taylor. They offer undergraduate courses on HR topics such as introduction to human resource management, compensation & performance appraisal, employee relations, staffing organizations, and employee training & development.

The University of Memphis offers MBA and executive MBA courses on topics such as managing human resources and strategic human capital management. They also offer a doctoral research seminar on human resource management. In addition, they have a student chapter of the Society for Human Resource Management (SHRM).

Finally, they have an undergraduate concentration in HR management. For more information, please contact Dr. Chuck Pierce, Chair of the Dept of Management (capierce@memphis. edu; http://www.memphis.edu/management). www.HRProfessionalsMagazine.com

27

HRCI Certification: a Win for HR Pros and Their Organization How do you stand out from the crowd in today’s competitive marketplace?

If you want to catch the attention of employers looking for the best of the

non-certified professionals. Moreover, 57% of HRCI certified

best for their HR teams, earning credentials from the HR Certification

professionals were promoted within the first five years of

Institute (HRCI) will give you the edge you’re looking for.

employment, versus only 27% of HR professionals who weren’t

The 2014 HumRRO study of over 20,000 HR professionals and their employers concludes that:

• HRCI-certified HR professionals report better employment prospects, higher annual incomes, faster income growth and higher levels of career satisfaction.

• Supervisors of HR teams recognize certification as a powerful marker of an HR professional’s ability to perform at higher levels of excellence, to more effectively carry out strategic HR tasks and to have more expertise in core HR bodies of knowledge.

certified.

As these studies show, HRCI certification marks you as an HR professional with the experience, competency and knowledge to help your organization reduce risk, maximize workforce performance and gain competitive advantage. If you want to get ahead, there’s no better time than now to start your certification journey; with HRCI’s Build Your Own Bundle, you can purchase the right exam and prep resources for you while enjoying a discount! Find out more at hrci.org/bundles.

Earlier studies corroborate the link between HRCI certification and career success. A 2013 Payscale report showed that median pay was $23,000 higher on average for HRCI certified professionals versus

98% of FORTUNE 500 companies have HRCI certified professionals actively managing, innovating, growing and leading. half Pg-HR Professionals-fortune500.indd 1 28 2015www.HRProfessionalsMagazine.com

Earn the HR credentials companies ask for by name.

HRCI.org/fortune500

6/15/15 1:26 PM

HR Professional Stacy Adams: Bethel University Changes Lives Through Education In a refrain familiar to HR professionals everywhere, Stacy Adams jokes that her office should be equipped with a revolving door. And no wonder -- as Human Resources Manager for Nissan Trading in Smyrna, she’s responsible for the compensation, benefits, morale, hiring, training, and development of some 250 employees at six facilities in the U.S. and abroad.

Despite traveling globally and playing an active role in both national and regional SHRM groups, Stacy also serves as a fulltime faculty member for Bethel University’s College of Professional Studies, sharing best practices with online students all over the country.

“Believe it or not,” she says, “teaching is an escape for me. It’s refreshing, because the students show me what other companies and employees from all walks of life are doing.” After 10 years in the position, she remains excited about the challenge. “Teaching Human Resource Management is a great way to help create better employees. I tell my students that human resource professionals go right down the middle, protecting both the company and its employees. And I underscore the three fundamental questions we must all ask ourselves: ‘Is it ethical? Is it legal? It is fair?’”

Stacy says that an invaluable component of the Bethel program is its focus on cutting-edge case studies and current employment law. “As my students explore HR history and changes in the law through these case studies, they become engaged in knowing their rights -- and they gain greater control of their own futures.”

She believes in Bethel’s ability to change lives through education. “I’ve referred so many of my employees to Bethel University.

I love the fact that the instructors serve as mentors to adult learners, and help establish the good time-management skills and academic practices needed to succeed in any environment.”

Stacy Adams, Bethel University Facilitator

Bethel University offers bachelor’s degrees in Management both online and in the classroom. Designed for busy professionals, its accredited, accelerated format allows students to balance personal, business, and academic responsibilities. Bethel’s Executive MBA Program is among the fastest-growing in the region, and includes an optional concentration in Human Resource Management. This concentration allows students seeking a robust program in the study of human resources to learn from experts who, like Stacy, boast a wealth of practical experience in the field.

Aligned with SHRM's HR Education Guidelines, it also prepares students to sit for designated HR credentialing exams, making them uniquely qualified and competitive in the HR marketplace.

“The world of human resources is constantly changing,” Stacy says. “Bethel University ensures that students stay at the forefront of that change.”

www.HRProfessionalsMagazine.com

29

University of Arkansas at Little Rock Weekend MBA Many professionals have the drive and motivation to be successful, but getting the advanced education to succeed has been out of reach due to work and family demands. Not anymore. Now working professionals can get the MBA they always wanted from a quality, AACSB-accredited business school without spending several nights a week in class and without missing work. The Weekend MBA at UALR is offered in a blended format; one Saturday a month in class, the rest conveniently delivered online. Now students can balance the rest of life’s demands while pursuing their degree.

Recently redesigned from the ground up with input from published research and from central Arkansas business leaders,

While the Weekend MBA program offers a schedule that works for students while they work, make no mistake about the rigor and intensity of the academic experience. It’s compressed, it’s challenging, and it will change the way they view business. The program’s robust, integrated MBA curriculum gives students the edge they need to excel in their professional life.

Considering quality, price, and convenience, the Weekend MBA may be the best educational value in Arkansas. The program cost, $25,000, is all inclusive meaning students do not have to worry about the cost of books, extra fees, or even lunch on class days; it’s all included. Plus, students pay as they go one semester at a time.

individualized leadership skill development plan. Students learn

The Weekend MBA features the same faculty and curriculum as our traditional evening program but with a health care focus.

Electives feature health care industry topics and core courses incorporate health care topics throughout the curriculum.

the body of knowledge needed to succeed in business and

To learn more, visit ualr.edu/mba.

the Weekend MBA program offers the right blend of hard and soft skills needed for business. The program helps students overcome their weaknesses and maximize their strengths through an

develop behavioral skills that lead to success.

The applications-based learning found in the Weekend MBA allows students to learn relevant, timely material that they can use now and that gives them a competitive edge for the future.

The cohort-based approach allows students to develop priceless friendships and build a powerful network of fellow professionals.

There has never been enough time. Until now.

Now you can get the MBA you have always wanted from a quality business school — no night classes, no missing work. The Weekend MBA meets one Saturday a month in class; the rest is conveniently delivered online.

COLLEGE OF BUSINESS UNIVERSITY OF ARKANSAS AT LITTLE ROCK

30

www.HRProfessionalsMagazine.com

CBU Establishes New College Program for Adult Learners In response to the changing market demands in adult undergraduate education, Christian Brothers University (CBU) has established the College of Adult Professional Studies. The program is oriented more specifically to professional students, with different degree paradigms requiring statistics, speech, math and English courses that are more immediately oriented with a business focus. Started in January 2014, the College of Adult Professional Studies changed its course delivery model to one that utilizes in-class and online class time.

“We are aware that adult students have very different needs,” says Toni Ross, Dean of the College of Adult Professional Studies. “Their schedules are different from traditional college-age students, and their lives have different priorities. We recognize and respect those differences, and we have designed our new programs to accommodate them.” The Council for Adult and Experiential Learning (www.cael.org) has already certified CBU’s College of Adult Professional Studies as an “Adult Learning Focused Institution.”

The College of Adult Professional Studies (CAPS) has already established two new baccalaureate degree programs, the Bachelor of Arts in Professional Psychology and the Bachelor of Science in Business Studies. Additionally, CAPS instituted three new associate degree programs, the Associate of Arts in Psychology, the Associate of Arts in General Studies and the Associate of Science in Business Studies.

Associate’s and Bachelor’s degree courses are offered in a blended hybrid format, giving students face-to-face time with faculty and peers on CBU’s midtown Memphis campus once a week, along with additional coursework completed online. CAPS offers two- hour evening courses at either 5:45 p.m. or 7:55 p.m., plus three hours each week of online instruction via lecture/chat/ online discussion.

while offering a variety of elective courses that allow students to customize their education to their interests. Credits may be transferred from previous educational experiences, and the associate degree programs provide a solid foundation for future bachelor’s degree course work.

The Bachelor of Arts in Professional Psychology degree is designed to provide fundamentals of psychology, with focus in areas of demand and growth potential. Within this program, students may choose from four areas of concentration: Criminal Justice, Organizational Psychology, Consumer Behavior and Public Health. The Criminal Justice concentration focuses on topics such as criminology, law enforcement, corrections, public administration, juvenile justice and counseling.

The Consumer Behavior concentration covers topics such as motivation, persuasion, sales and promotion strategy and how they support marketing efforts in a business environment. The Public Health concentration explores ways in which the social, political, behavioral and biological sciences contribute to the understanding of patterns and distributions of health and disease.

The curriculum of the Bachelor of Science in Business Studies degree is specifically designed to provide adult learners with core business skills, emphasizing planning and decision-making skills. Coursework focuses on such topics as organizational structure and behavior, leadership theory, networking, human resources, international business, corporate policy and strategic planning. Concentrations are offered in Entrepreneurship, Leadership, Management, Management Information Systems, Marketing, Nonprofit Management, Project Management, Public Health Administration, Real Estate, and Servant Leadership.

If your dreams don’t scare you a little... they’re not big enough.

The new Associate of Arts and Associate of Science programs are designed to provide a solid understanding of foundational skills in each degree area,

Program start dates are August, October, January, March and June. More information on the College of Adult Professional Studies at CBU is available at www.YourCBU.com or at (901) 321-3291.

If your dreams don’t scare you a little... they’re not big enough.

College of Adult Professional Studies 650 East Parkway South Memphis, TN 38104

(901) 321-3291 » aps@cbu.edu

You’ve always dreamed of graduating.

Christian Brothers University helps adult learners realize their dreams of obtaining a college degree. CBU’s revitalized College of Adult Professional Studies (CAPS) offers a convenient blend of

College of Adult Professional Studies 650 East Parkway South Memphis, TN 38104

(901) 321-3291 » aps@cbu.edu

evening courses and online instruction.

» You’ve always dreamed of graduating. » Custom-built curriculum based on your schedule, your determination, and your learning style

Christian Brothers University helps adult learners realize their

If your dreams don’t scare you a little... they’re not big enough.

DEGREES dreams ofOFFERED: obtaining a college degree. CBU’s revitalized College

»ofBachelor of Science inStudies Business Studies Adult Professional (CAPS) offers a convenient blend of »evening Bachelor of Arts in Professional Psychology courses and online instruction. » Associate of Science in Business Studies »»Associate of Arts in Professional Psychology »»Associate of Artscurriculum in Generalbased Studieson your schedule, your Custom-built determination, and your learning style

To learn more: DEGREES OFFERED:

www.cbu.edu/caps » Bachelor of Science in Business Studies

» Bachelor of Arts in Professional Psychology » Associate of Science in Business Studies » AssociateYou’ve of Arts in always Professionaldreamed Psychology of graduating.

College of Adult Professional Studies 650 East Parkway South Memphis, TN 38104

(901) 321-3291 » aps@cbu.edu

www.HRProfessionalsMagazine.com

31

Sixth Circuit Provides Useful Guidance to Employers on Attendance and ADA Accommodation

By JENNIFER S. HAGERMAN and JOSHUA HAWKINS

In the recent case of EEOC v. Ford Motor Co., 782 F.3d 753 (6th Cir. 2015), the Sixth Circuit, sitting en banc, took what it described as a “common sense” approach in determining that regular on-site job attendance is an essential function of most jobs, and, therefore, that an unpredictable telecommuting schedule was not a reasonable accommodation under the Americans with Disabilities Act (“ADA”). The court’s opinion offers practical insights for employers regarding whether an employee is “qualified” under the ADA and, if so, what accommodations are reasonable.

Case Background Jane Harris was employed at Ford for approximately six years as a steel resale buyer (“buyer”). In that position, Harris was responsible for buying and reselling raw steel. Most buyers performed their job responsibilities entirely in-person, with some buyers telecommuting at most once per week. Harris, however, suffered from Irritable Bowel Syndrome (“IBS”), which sometimes made it difficult for her perform her job duties. Harris’s symptoms worsened as time progressed, resulting in multiple absences from work each week during her final two years with Ford.

Ford attempted to work with Harris to address her chronic absenteeism. For example, Ford on two occasions allowed Harris to participate in an “Alternative Work Schedule,” where she could work from home as needed, but neither attempt succeeded. Harris could not establish consistent work hours or perform the “core objectives” of her job responsibilities. Ford also twice used its “Workplace Guidelines,” a tool to aid employees with attendance problems tied to illnesses, but these efforts, along with another telecommuting program, all failed.

Despite these failures, Harris then requested to work “up to four days per week” from home. In a meeting regarding her request, Harris and Ford agreed that four of her ten main job responsibilities could not be performed from home. For this reason, along with Ford’s determination that another four of Harris’s job responsibilities could not effectively be performed from home, Ford denied her request. Ford, however, then offered other methods of accommodation, including searching for “jobs better suited for telecommuting.” Harris rejected Ford’s proposed alternative accommodations. In response, Ford informed Harris that she could propose another alternative accommodation. Instead of continuing to seek a suitable accommodation, Harris filed a charge of discrimination with the EEOC claiming that Ford’s denial of her telecommuting request violated the ADA. Following her charge of discrimination, the relationship between Harris and Ford continued to deteriorate. Harris felt threatened by her supervisors in their follow-up meetings, and she sank to the bottom ten percent in employee performance. In a final effort, Ford enrolled Harris in its “Performance Enhancement Program.” When this last-ditch attempt failed, Ford terminated Harris in September 2009 due to subpar performance and excessive absenteeism.

Approximately two years later, the EEOC sued Ford under the ADA. The suit focused on two issues: whether Ford failed to reasonably accommodate Harris’s disability; and, whether Ford terminated Harris in retaliation for her filing a discrimination charge with the EEOC. Ford moved for summary judgment and the district court granted the motion, holding that “working from home up to four days per week [was] not [a] reasonable” accommodation, and that the EEOC did not provide sufficient evidence to rebut the evidence that Ford’s termination of Harris was based on poor performance.

The EEOC appealed, and a divided Sixth Circuit panel reversed on both claims. Subsequently, the full court granted Ford’s request for en banc review.

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Sixth Circuit’s Analysis (En Banc) In affirming the district court’s decision, the Sixth Circuit identified the central issues as: whether Harris was qualified under the ADA and whether Harris’s accommodation request was reasonable. In order to be “qualified,” Harris must be able to perform the essential functions of a buyer with or without accommodation. The court concluded that regular and predictable attendance was an essential function of Harris’s interactive job as a buyer, and that Harris’s unusually high level of absences rendered her unable to perform this essential function. Therefore, the court held that Harris was not a qualified individual under the ADA. The court rejected the EEOC’s argument that Harris’s testimony, Ford’s telecommuting policy towards other buyers, and advances in technology created a genuine dispute of material fact as to the essential job functions.

The court found that Harris’s testimony supporting her ability to telecommute was negated by her history of failures with regard to alternative work schedules. The court acknowledged that Ford allowed other buyers to telecommute, but it held that since those buyers telecommuted only once per week at maximum, with the availability of coming into work those days at a moment’s notice, Harris’s situation was not comparable. The court also rejected the EEOC’s argument that technological advances could make telecommuting more effective, noting that the overwhelming majority of Harris’s interaction came from technology that had not significantly advanced over the past five years (i.e., email and telephone calls).

Following its rejection of the accommodation claim, the court held that Ford was also entitled to summary judgment on the claim that Ford retaliated against Harris. The court held that the EEOC could not establish that Harris’s charge of discrimination was the “but-for cause” of her termination.

While the court did note that the timing of Harris’s termination was “suspicious,” it reiterated the court’s position that “temporal proximity cannot be the sole basis for finding pretext.” In conclusion, the court found that the EEOC had not presented sufficient evidence that Harris’s termination was based on anything other than her own poor performance.

Practical Applications Employers may now continue to proceed under the general principle that regular on-site attendance will typically be considered an essential job function for “most” jobs. The court’s decision also demonstrates the continued importance of individualized and case-specific determinations of essential job functions and consideration of requests for accommodations.

Employers would be wise to note that Ford’s repeated and continued efforts to work with Harris to try and find a reasonable accommodation were key to Ford’s prevailing on appeal. Finally, employers and employees should continue to consider telecommuting as a possible accommodation, especially where telecommuting may occur on a more limited basis.

Jennifer S. Hagerman, Attorney Burch Porter & Johnson PLLC jhagerman@bpjlaw.com www.bpjlaw.com

Joshua Hawkins, Intern Burch Porter & Johnson PLLC

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33

The 14th Annual Employment Law and Legislative Affairs (“ELLA”) Conference September 17-18 in Little Rock

T

he 14th Annual Employment Law and Legislative Affairs (“ELLA”) Conference supported by the Arkansas SHRM State Council continues the tradition of providing Human Resource professionals timely information in the complex areas of workplace law and regulation. The ELLA

information they receive by selecting the concurrent sessions of most

Conference focuses on important issues in employment law and

Conference began as an idea of one of our members, Russell Gunter.

regulatory compliance, including EEO, Wage and Hour, NLRB, and

We have all benefitted from Russell’s leadership through the years

workforce development, to just name a few. Presenters include repre-

and this conference would not have enjoyed its history and success

sentatives from regulatory agencies and some of the best Employment

without him. Previous speakers at this conference have included

Lawyers in the region. The 2015 ELLA Conference will be held at

Senator David Pryor, Senator Dale Bumpers, Governor Mike Beebe,

the Doubletree Hotel in Little Rock, Arkansas on September 17-18,

Treasurer Jimmie Lou Fisher, Skip Rutherford, and John Brummett.

2015. More information can be found at the Arkansas SHRM website

The 2015 conference will include some notable presenters as well,

(www.arshrm.com).

with details announced as soon as confirmed.

The ELLA Conference features a presentation by Mike Aitken,

Sponsorship opportunities are available. The 2015 Arkansas ELLA

SHRM’s Vice President of Government Affairs. Attendees will be able

conference co-chairs are Susan Meadors with SKM Consulting,

to network with sponsors, speakers, and fellow Human Resources

Inc. (susan.meadors@att.net) and Brian Vandiver with Cox, Sterling,

professionals at a reception held immediately at the conclusion of

McClure and Vandiver, PLLC (bavandiver@csmfirm.com). Susan

presentations on Thursday, September 17. The conference will end

and Brian will do a great job. We encourage everyone to check the

by 12N on Friday, September 18. Attendees will be able to customize

conference website for updates or contact them with any questions.

34

www.HRProfessionalsMagazine.com

interest. The ELLA Conference has always provided a great return on your investment and the 2015 conference continues that tradition.

The tradition of the ARSHRM Employment Law and Legislative Affairs

It’s Time for a Checkup.

Are your employment policies and practices up-to-date with recent changes in the law? Could they be better?

If you’re not sure, then 2015 could be an expensive year for you.

From hiring to performance reviews to discipline – and things in between – you can’t afford noncompliance.

CGWG’s HR Checkup provides a basic review of your company’s health. For $500, set up a one-on-one meeting with CGWG attorneys who will help you identify employment law compliance issues and establish a path to best practices.

*Participating in the HR Checkup establishes an attorney-client relationship only to the extent of the agreed-upon services.

CO NTACT US TO DAY TO SC H ED UL E YOUR H R C H EC KU P. LI T T LE ROCK | 5 01 - 37 1 - 9999 N ORT H W E ST A RK A N SAS | 479 -44 3-6978

LITTLE ROCK | NORTHWEST ARKANSAS | CGWG.COM |

BEST PRACTICES for COMPENSATION MANAGEMENT

compared to your organization. It lists the job titles, the points assigned to that position, the present pay rate at your organization for that job (if there is more than one employee in that position it is an average), your competitors’ average pay rate for that position, the dollar variance that you are ahead/behind of the competitor, and an overall percent variance that you are ahead/behind your competitor. In addition, on the last page this report gives you an overall percentage that you are ahead/behind all of your competitors combined.

— A comprehensive assessment for extracting value from compensation analysis and practice

PART 2

Another key function that a system-supported best practice approach should have is the ability to accommodate different informational views. This chart (Exhibit 4) illustrates graphically your firm's pay line with respect to the individual market

By BRUCE JOHANSON

  

ACTION-ORIENTED ANALYSIS The proof of any best practice method is in repeatable and sustained performance.

The technology employed must support a validated process. At DBSquared, we pride ourselves on our intimate knowledge and experience with strategic compensation management. The following section illustrates DBCompensation and its application through a quick overview of some of the reporting and output capabilities based on the following process diagram.

This process flow identifies the key elements that establish good compensation management practice. The process can begin with data import from any number of HR-related systems, but doesn't have to. It should focus on completion of the PAQs for each position in the firm. Completed questionnaires should be available from a library or part of a turnkey implementation approach. As with all best practices, the technology architecture should allow significant collaboration that encourages involvement of employees and their managers with oversight by the HR department. Sufficient flexibility should be available to allow a combination of resources to complete the process.

An often neglected advantage of this approach is the automatic creation of fully compliant job descriptions that are available for output in numerous formats to accommodate and support any internal HR process that is part of the talent management of the organization. Rating the position is also highly interactive and collaborative. Default ratings for each factor are provided for positions included in libraries, but they should be enhanced by easy electronic completion of ratings by management or committee members. The system drives consensus and provides an informative context for participants. This is to ensure that internal equity was the outcome from the job ratings assigned.

Another critical function is the ability to do what we call 'sore-thumbing' of the totals to enable fine tuning and after the fact adjustments based on new information. The latest edition of the software includes this capability as well as the updating of the constituent factors based on our extensive database and experience.

Once the positions are rated and approved significant support for decision making can begin. Integrating specific employee data again from any number of payroll or HRIS systems is easily accomplished.

200,000

150,000   

100,000

50,000

0 0

500

1000

SAMPLE COMPUTER SERVICES COMPANY Exhibit 4, Page 1 of 1. Printed 4/28/2015.

ACTUAL

Organization1

1500

Organization2

Organization3

2000

2500

Copyright © 2001-2015 DBSquared, LLC DBCompensation System - www.dbsquared.com

 Organization4

Organization5

Organization6

studies. The capability to filter information to accommodate different views and objectives drives information-based decision making. This graph offers you a way to easily determine where your organization falls within the market for pay. The sample organization line is turquoise, and this graph is comparing that organization to all of the competitors used in this example. As you can see, the sample organization falls in the middle of all the competitors. It is up to your organization where you fall within the market. You may wish to be more competitive than everyone else in regard to base pay. You may wish to offer a lower base pay but offer more perks and benefits to your employees. This is for an external picture only.

The graph to assist you with compliance would be Exhibit 2, the internal picture.

Developing your compensation management philosophy and polices begins with understanding your firm's current situation. The system builds a regression line, or a central tendency line, to fit the pay structure at your organization. Adding market studies and pay comparison data completes the firm's baseline. You should be able to obtain salary studies from outside sources if desired but manage them in-house. The following report (Exhibit 3) is a look at the outside market data 

  Job Title

Chief Financial Officer/Executive Vice President Chief Technology Officer

212-09-004

General Counsel VP/Secretary

Points

Present Pay Rate

Pay Rate Mean

Dollar Variance

Pay Rate Mean

Dollar Variance

2527

$237,500

$260,004

($22,504)

-9.48%

$257,319

($19,819)

-8.34%

$259,056

($21,556)

-9.08%

$259,028

($21,528)

-9.06%

2249

$200,000

$241,177

($41,177)

-20.59%

$243,418

($43,418)

-21.71%

$242,509

($42,509)

-21.25%

$234,656

($34,656)

-17.33%

2164

$195,125

$222,094

($26,969)

-13.82%

$226,879

($31,754)

-16.27%

$241,879

($46,754)

-23.96%

$251,052

($55,927)

-28.66%

$2,232

0.99%

$231,706

($6,706)

-2.98%

$226,415

($1,415)

-0.63%

$250,272

($25,272)

-11.23%

Salary Source - Dallas Mean

EVP Sales & Professional Services

810-09-026

2136

$225,000

$222,768

Chief Marketing Officer

610-09-020

2066

SVP Client Operations

310-09-010

Percent Variance

Salary Source - Dallas Midpt.

Pay Rate Mean

Dollar Variance

Percent Variance

Dallas DOL Mean Pay Rate Mean

Dollar Variance

Compdata -South Region Mean

Percent Variance

Percent Variance

$200,000

$202,652

($2,652)

-1.33%

$207,059

($7,059)

-3.53%

$210,363

($10,363)

-5.18%

2065

$190,000

$202,501

($12,501)

-6.58%

$192,770

($2,770)

-1.46%

$192,444

($2,444)

-1.29%

SVP Engineering

2025

$195,000

$202,508

($7,508)

-3.85%

$202,230

($7,230)

-3.71%

$198,217

($3,217)

-1.65%

$197,357

($2,357)

-1.21%

SVP Sales

2001

$170,268 ($62,690)

-41.79%

$214,166

($64,166)

-42.78%

$224,826

($74,826)

-49.88%

$221,460

($71,460)

-47.64%

-5.93%

$175,947

($10,947)

-6.63%

$160,370

-7.50%

$196,928

($13,615)

VP of Human Resources

712-09-024

1898

$150,000

$212,690

VP of Information Technology

213-09-005

1885

$165,000

$174,777

($9,777)

VP of Managed Security Services Analysis

353090411

1859

$183,313

$197,067

($13,754)

-7.43%

$192,444

VP of Sales - Enterprise

850090485

1748

$213,640

$193,651

$19,989

9.36%

$189,690

$23,950

11.21%

$179,145

$34,495

16.15%

$183,719

$29,921

14.01%

VP of Tax and Treasurer

710-09-022

1728

$155,000

$184,530

($29,530)

-19.05%

$194,131

($39,131)

-25.25%

$193,134

($38,134)

-24.60%

$187,288

($32,288)

-20.83%

1672

$154,500

$172,418

($17,918)

-11.60%

$164,160

($9,660)

-6.25%

$160,370

($5,870)

-3.80%

VP of Finance

710-09-023

1659

$153,000

$163,000

($10,000)

-6.54%

$158,145

($5,145)

-3.36%

$169,954

($16,954)

-11.08%

VP of Sales - Direct

651090481

1586

$175,732

$1,732

VP of Architecture/IT Strategy

$4,630 ($9,131)

2.81% -4.98%

$177,464

$176,046

$1,418

0.80%

$172,445

$5,019

2.83%

$171,356

$6,108

1586

$131,943

$176,046

($44,103)

-33.43%

$172,445

($40,502)

-30.70%

$171,356

($39,413)

-29.87%

1586

$150,000

$176,046

($26,046)

-17.36%

$172,445

($22,445)

-14.96%

$171,356

($21,356)

-14.24%

VP of Professional Services

314-09-015

1579

$150,000

$161,765

($11,765)

-7.84%

VP Risk Management

711-09-024

1545

$170,000

VP of Engineering

256090352

1517

$188,484

$171,744

$16,740

8.88%

$167,132

$21,352

11.33%

$168,799

$19,685

10.44%

$172,365

$16,119

8.55%

VP of Development

210-09-000

1513

$153,470

$170,578

($17,108)

-11.15%

$166,408

($12,938)

-8.43%

$160,873

($7,403)

-4.82%

$164,813

($11,343)

-7.39%

1504

$147,500

$148,048

($548)

-0.37%

$148,147

($647)

-0.44%

$150,635

($3,135)

-2.13%

$149,830

($2,330)

-1.58%

252090326

1495

$113,001

1485

$134,640

256090341

1485

$149,180

$150,866

($1,686)

-1.13%

$143,640

$5,540

3.71%

$153,560

($4,380)

-2.94%

$151,430

($2,250)

-1.51%

1484

$154,500

$148,531

$5,969

3.86%

$141,996

$12,504

8.09%

$146,779

$7,721

5.00%

$142,399

$12,101

7.83%

Director of Architecture

214-09-006

1483

$138,277

$143,682

($5,405)

-3.91%

$136,800

$1,477

1.07%

$146,248

($7,971)

-5.76%

Senior Manager - Client Lifestyle Management

353090381

1483

$136,501

VP of Direct Marketing

610-09-019

1473

$121,380

$151,876

($30,496)

-25.12%

$144,578

($23,198)

-19.11%

$138,701

($17,321)

-14.27%

VP of Product Strategy

621-09-021

1466

$150,000

Assistant General Counsel

713-09-025

1460

$175,085

$148,113

$26,972

15.41%

$148,509

$26,576

15.18%

$165,888

$9,197

Director of Research

212-09-003

1446

$101,000

$144,979

($43,979)

-43.54%

$145,676

($44,676)

-44.23%

$136,917

($35,917)

1415

$127,500

$130,180

($2,680)

-2.10%

$131,366

($3,866)

-3.03%

$125,440

$2,060

$122,084

($19,084)

-18.53%

$126,430

($23,430)

-22.75%

$114,550

($11,550)

VP of Sales - Inside Sales VP of Sales Channels

VP of Managed Security Services Engineering Director of Threat Intelligence Director of Malware Analysis Principle Architect VP of Financial Reporting & Accounting

VP of Corporate Communications

610-09-020

Technical Director of Malware Analysis

212-09-004

1404

$120,000

Director of Corporate Information Systems

213-09-005

1404

$103,000

$153,560

SAMPLE COMPUTER SERVICES COMPANY Exhibit 3A, Page 1 of 5. Printed 4/28/2015.

36

www.HRProfessionalsMagazine.com

($3,560)

3.44%

0.98%

-2.37% 5.25%

$157,000

$18,085

10.33%

1.62%

$124,822

$2,678

2.10%

-11.21%

$108,800

($5,800)

-5.63%

-35.56%

Copyright © 2001-2015 DBSquared, LLC DBCompensation System - www.dbsquared.com

Statistical data for the above report offers a quick overview of the percent variance difference from your organization to the market comparisons entered into the system, which is determined by the client organization. This report (Exhibit 4A) also provides information in regard to the number of benchmark positions that you had from each comparison and the correlation.

Definition of salary policy and determination of economic consequences can now be accomplished with interactive ease.

For example, graphic depiction (Exhibit 5) of the current policy versus the trend

% Variance

Titles

Slope

Intercept

185

90.65%

89.53246

10,533.87

29

90.12%

111.21810

-10,359.75

 Salary Source - Dallas Midpt.

115 97.26% -1.9% 106.63250

-6,005.76

YOUR ORGANIZATION Veracor Study

-10.3%

Correlation

  Salary Source - Dallas Mean 115 97.44% 108.45020 -1.8%

Dallas DOL Mean

115

-1.7% % Variance

Compdata -South (Private) Mean YOUR ORGANIZATION Compdata -South Region Mean Veracor Study

-0.3%

97.74%

Titles

+0.9% -10.3%

103.13200

Correlation

83 185 83 29

Slope

-7,976.26 -3,766.46 Intercept

97.86% 90.65% 97.53% 90.12%

113.20840 89.53246 114.20610 111.21810

-13,354.78 10,533.87 -15,307.46 -10,359.75

Salary Source - Dallas Midpt.

-1.9%

115

97.26%

106.63250

-6,005.76

Salary Source - Dallas Mean

-1.8%

115

97.44%

108.45020

-7,976.26

Dallas DOL Mean

-1.7%

115

97.74%

103.13200

-3,766.46

Compdata -South (Private) Mean

-0.3%

83

97.86%

113.20840

-13,354.78

Compdata -South Region Mean

+0.9%

83

97.53%

114.20610

-15,307.46

and pay. Many companies prefer to implement grade structures. Salary grade structures should be driven by the point values of your job ratings, but illustrate the effective pay ranges as illustrated here.

Another key analysis function is the ability of your tools to bring together different    views of all the information that supports your compensation philosophy. The interactive scattergraph picture (Exhibit 2) confirms numerous aspects of the salary administration planning for the organization. This feature brings together the: 1

2

3

4

5

6

Number of Full Time Employees

Total Actual Pay

Total Pay if All Persons Paid the Midpoint

Percent of Pay to Sum of Midpoints (2) / (3)

Year End AuthorCompaRatio (7b) / (3)

Dollar Variance Between Sum of Midpoints and Actual (2) - (3)

7a

7b

Year End Projection (2) + (7a)

Under Min.

1st

2nd

3rd

4th

Over Max.

$46,266,027

94.75%

97

107

132

98

45

29

+5.55% • Central tendency of your current pay policy

• Max and min ranges for that policy 508

$43,835,300

$46,266,028

94.75%

Budget Variance

100.00% ($2,430,728) $2,430,727

8

Current Month CompaRatio Based On Year End (2) / (7b)

Dollar Variance Between Actual and Budget Compa-Ratio

Current Distribution of Employee Pay in Quartiles

• Grade definition with respect to point value (width) and salary range (height)

Overall Market Variance Mean -2.55% Overall Market Variance Median -1.77%

• Position and compliance characteristics of individuals

*Note: Comparison organizations with correlations less than 75.00% do not appear in the Exhibit 4 salary survey payline graph.

SAMPLE COMPUTER SERVICES COMPANY Exhibit 4A, Page 1 of 1. Printed 4/28/2015.

Copyright © 2001-2015 DBSquared, LLC DBCompensation System - www.dbsquared.com

The final illustration (Exhibit 7) breaks down the employee count within the 



 

  Overall Market Variance Mean -2.55%

Overall Market Variance Median -1.77% *Note: Comparison organizations with correlations less than 75.00% do not appear in the Exhibit 4 salary survey payline graph.

SAMPLE COMPUTER SERVICES COMPANY 200,000 Exhibit 4A, Page 1 of 1. Printed 4/28/2015.

1

2

3

4

5

6

Number of Full Time Employees

Total Actual Pay

Total Pay if All Persons Paid the Midpoint

Percent of Pay to Sum of Midpoints (2) / (3)

Year End AuthorCompaRatio (7b) / (3)

Dollar Variance Between Sum of Midpoints and Actual (2) - (3)

Copyright © 2001-2015 DBSquared, LLC DBCompensation System - www.dbsquared.com

508

$43,835,300

$46,266,028

94.75%

7a

7b

Year End Projection (2) + (7a)

Under Min.

1st

2nd

3rd

4th

Over Max.

$46,266,027

94.75%

97

107

132

98

45

29

+5.55% Budget Variance

100.00% ($2,430,728) $2,430,727

8 Current Month CompaRatio Based On Year End (2) / (7b)

Dollar Variance Between Actual and Budget Compa-Ratio

Current Distribution of Employee Pay in Quartiles

150,000



SAMPLE COMPUTER SERVICES COMPANY Exhibit 7, Page 1 of 1. Printed 4/28/2015.

Copyright © 2001-2015 DBSquared, LLC DBCompensation System - www.dbsquared.com

different quartiles of the new proposed salary ranges. In addition, the compa-ratio is shown for the organization. The purpose of this calculation is to show where the organization stands overall to the midpoint salary ranges. There is also an area for budget planning. This function allows the client organization to enter a percentage adjustment for salary ranges for the upcoming year, and DBCompensation calculates the impact that would have to the client's bottom line.

100,000

50,000

Of course this offers an excellent entrée into many performance management systems that help line management interactively apportion annual salary improvements.

0 0

500

1000

1500

2000



SAMPLE COMPUTER SERVICES COMPANY Exhibit 5, Page 1 of 1. Printed 4/28/2015.

ACTUAL

MIN POLICY

2500

Copyright © 2001-2015 DBSquared, LLC DBCompensation System - www.dbsquared.com

MID POLICY

MAX POLICY

midpoint, maximum and minimum helps determine the direction for future policy decisions. The blue line is your current pay line, the orange line is the new midpoint that you are working towards, the green line will be your new minimum for the salary range and the red line is your new maximum for the salary range.

Intercept and slope parameter manipulation using the tool illustrated offers an easy and interactive method to develop or revise salary ranges. For example, this screen (Exhibit 6) allows the management team to develop any number of 'what-if' 

  Page 1 of 15 No. Emp

Total Points

1

2527

$237,500

Joyce, Van

Points 11,117.98 Actual Salaries in Range Quartiles Sum of Sum of Policy Pay Range Under Over Present Pay/ Present Pay/ Midpoint Max (120%) Min. 1st 2nd 3rd 4th Max. Classification Midpoints $199,930 $249,912 $299,895 $237,500 $249,912 X

1

2249

$200,000

Jones, Alberto

$178,914

$223,642

$268,371

1

2164

$195,125

Alston, Demetrius

$172,488

$215,610

$258,732

94.49716 Classification / Job Title

Chief Financial Officer/Executive Vice President Chief Technology Officer

212-09-004

General Counsel VP/Secretary

Pay Rate

Employee Name

Min (80%)

X X

Dollar Variance

Percent Variance

($12,412)

-5.23%

$200,000

$223,642

($23,642)

-11.82%

$195,125

$215,610

($20,485)

-10.50%

EVP Sales & Professional Services

810-09-026

1

2136

$225,000

Welch, Chong

$170,371

$212,964

$255,557

$225,000

$212,964

$12,036

5.35%

Chief Marketing Officer

610-09-020

1

2066

$200,000

Holloway, Marlin

$165,079

$206,349

$247,619

X

$200,000

$206,349

($6,349)

-3.17%

SVP Client Operations

310-09-010

1

2065

$190,000

Lam, Rodolfo

$165,004

$206,255

$247,506

X

$190,000

$206,255

($16,255)

-8.56%

1

2025

$195,000

Thompson, Tobias

$161,980

$202,475

$242,970

X

$195,000

$202,475

($7,475)

-3.83%

$170,268

$200,207

($29,938)

-17.58%

$150,000

$190,474

($40,474)

-26.98%

$165,000

$189,245

($24,245)

-14.69%

$175,000

$186,788

($11,788)

$191,625

$186,788

$213,640

$176,299

$37,341

17.48%

$155,000

$174,409

($19,409)

-12.52%

SVP Engineering

1

2001

$170,268

Barbour, Olga

$160,165

$200,207

$240,248

VP of Human Resources

712-09-024

1

1898

$150,000

Conway, Federico

$152,379

$190,474

$228,568

VP of Information Technology

213-09-005

1

1885

$165,000

Harvey, Humberto

$151,396

$189,245

$227,094

VP of Managed Security Services Analysis

353090411

2

1859

$175,000

Atkins, Shary

$149,431

$186,788

$224,146

1859

$191,625

Watson, Claud

$149,431

$186,788

$224,146

VP of Sales - Enterprise

850090485

1

1748

$213,640

Shapiro, Tobias

$141,039

$176,299

$211,559

VP of Tax and Treasurer

710-09-022

1

1728

$155,000

Pierce, Rebekah

$139,527

$174,409

$209,291

SVP Sales

353090411

X

X X X X X X X

$4,837

-6.74%

1

1672

$154,500

Creech, Tony

$135,294

$169,117

$202,941

X

$154,500

$169,117

($14,617)

-9.46%

710-09-023

1

1659

$153,000

Callahan, Fernand

$134,311

$167,889

$201,467

X

$153,000

$167,889

($14,889)

-9.73%

VP of Sales - Direct

651090481

2

1586

$148,706

Ellis, Nestor

$128,792

$160,990

$193,189

X

$148,706

$160,990

($12,284)

-8.26%

$206,222

1

1586

$206,222

Gould, Richard

$128,792

$160,990

$193,189

$160,990

$45,231

21.93%

1586

$131,943

Sherrill, Pablo

$128,792

$160,990

$193,189

$131,943

$160,990

($29,047)

-22.02%

1

1586

$150,000

Lynn, Junior

$128,792

$160,990

$193,189

X

$150,000

$160,990

($10,990)

-7.33%

VP of Professional Services

314-09-015

1

1579

$150,000

Wang, Deshawn

$128,263

$160,329

$192,395

X

$150,000

$160,329

($10,329)

-6.89%

VP Risk Management

711-09-024

1

1545

$170,000

Woodward, Sebastien

$125,693

$157,116

$188,539

$170,000

$157,116

$12,884

7.58%

VP of Engineering

256090352

2

1517

$201,867

Barton, Paul

$123,576

$154,470

$185,364

$201,867

$154,470

$47,397

23.48%

1517

$175,100

Lutz, Jermaine

$123,576

$154,470

$185,364

$175,100

$154,470

$20,630

11.78%

1

1513

$153,470

O'Neal, Maria

$123,274

$154,092

$184,911

X

$153,470

$154,092

($622)

-0.41%

1

1504

$147,500

Glover, Jerry

$122,593

$153,242

$183,890

X

$147,500

$153,242

($5,742)

-3.89%

$152,391

651090481 VP of Sales - Inside Sales VP of Sales Channels

256090352 VP of Development

210-09-000

VP of Managed Security Services Engineering Director of Threat Intelligence

252090326

2

Principle Architect

256090341

$120,002 $106,000

Hensley, Laura Wu, Sebastien

$121,913 $121,913

$152,391 $152,391

X X

X

$182,869

X

1485

$134,640

Atkins, Sandy

$121,157

$151,446

$181,736

1485

$156,174

Dunlap, Mindy

$121,157

$151,446

$181,736

1485

$142,185

Weeks, Gaston

$121,157

$151,446

$181,736

1

1484

$154,500

Albright, William

$121,081

$151,352

$181,622

Director of Architecture

214-09-006

1

1483

$138,277

Robertson, Keith

$121,006

$151,257

$181,509

Senior Manager - Client Lifestyle Management

353090381

1

1483

$136,501

Gallagher, Ward

$121,006

$151,257

$181,509

VP of Direct Marketing

610-09-019

1

1473

$121,380

Morris, Dorian

$120,250

$150,312

$180,375

SAMPLE COMPUTER SERVICES COMPANY Exhibit 6, Page 1 of 15. Printed 4/28/2015.

X

$182,869

1 2

256090341 VP of Financial Reporting & Accounting

1495 1495

252090326 Director of Malware Analysis

X X

$120,002

($32,389)

-26.99%

$152,391

($46,391)

-43.77%

$134,640

$151,446

($16,806)

-12.48%

$156,174

$151,446

$4,728

3.03%

$142,185

$151,446

($9,261)

-6.51%

$154,500

$151,352

$3,148

2.04%

X

$138,277

$151,257

($12,980)

-9.39%

X

$136,501

$151,257

($14,756)

-10.81%

$121,380

$150,312

($28,932)

-23.84%

$106,000

X X X X

X

SAMPLE COMPUTER SERVICES COMPANY Exhibit 7, Page 1 of 1. Printed 4/28/2015.

Copyright © 2001-2015 DBSquared, LLC DBCompensation System - www.dbsquared.com

Best practices should be analyzed and applied with a keen sense of the individual company context. They are indicative and directional, but not necessarily mandatory in every case. Over 110 years of combined compensation management practice and experience is pervasive throughout DBCompensation. Regardless of the individual technology framework or any specific procedural context, best practices in compensation management should: • Reduce operating costs o Eliminate position and pay creep o Improve retention - reduce cost of replacement • Ensure compliance and eliminate business risk o Minimize audit and examination costs o Limit liability and exposure to legal costs

2.52%

VP of Finance

VP of Architecture/IT Strategy

SUMMARY

Copyright © 2001-2015 DBSquared, LLC DBCompensation System - www.dbsquared.com

scenarios that help support timely decision making that aligns with corporate goals and supports individual advancement. This chart allows you to see where your employees fall in regard to the minimum, midpoint and maximum of the salary range. It allows you to see all of the positions at your organization, the point-value for each position, the employee(s) in that position, the minimum, midpoint and maximum of your current or future pay policy and where each employee falls within those quartiles (you can plug-in different percentages to see what a certain percentage increase would look like across the board) and much more.

Comprehensive tools support multiple frames of reference. No set of best practices is complete without the ability to view salary information as a function of rating

• Increase operating efficiency o Integrate existing systems and processes o Develop unique value from internal job descriptions o Focus HR resources on more value-added concerns (i.e. talent management) Additionally best practices should facilitate an integrated technology framework and enable HR department process improvement. The resulting system should offer: • Powerful, multi-dimensional reporting and analysis capabilities • Strategic pay policy and decision making • Diverse informational views • Integrated technology environment • Minimized IT support and total cost of ownership Article by Bruce Johanson – Principal Partner and Co-Owner of DB Squared and the Johanson Group. Bruce and his twin brother Blair, and their other DB Squared principal, Dale Oliver, are located in Fayetteville, Arkansas. www.HRProfessionalsMagazine.com

37

May 19th, Jackson Marriott

1

2

3

4

5

6

ONE AREA OF PRACTICE. ONE FOCUS.

7

8

The Kullman Firm has engaged in the practice of labor and employment law on behalf of management since 1946. ! Employment Discrimination Litigation ! OSHA ! Wrongful Discharge Litigation ! Collective Bargaining Negotiations ! Labor and ADR Arbitrations ! Union Representation Cases

! Wage and Hour Law ! OFCCP/Affirmative Action ! ERISA/Employee Benefits ! FMLA Compliance

Offices in Louisiana, Mississippi, Florida and Alabama.

www.kullmanlaw.com

Attorney responsible for content of this ad: Martin J. Regimbal 38

www.HRProfessionalsMagazine.com

9 1 Murray L. Harber, Executive Director of the Mississippi Business Group on Health welcomed everyone to the meeting. 2 Billy Sims, President of Mississippi Business Group on Health, and VP of HR for Southern Farm Bureau Life Insurance. 3 Victor Sutton, Mississippi State Department of Health. 4 State Senator Kenny Wayne Jones (D). 5 State Senator Will Longwitz (R). 6 Matt Ginn with Southern Farm Bureau Life Insurance spoke on Integrating Employee Health at SFBLI. 7 Keynote Speaker Jessica Grossmeier, PhD, VP of Research, HERO. 8 Claude Courtney, MS spoke on the CDC Scorecard as an assessment tool for the SEWP. 9 Marshall Bouldin, MD; Annette Low, MD; and Pete Avara, MD; spoke on Metabolic Health issues and Employees.

`

Financial Planning has never been more important than it is today! Changes in the economy, taxes and interest rates have made every financial picture more complex than ever before.

We focus on: Financial Needs Analysis Retirement Income Planning Disability Income Protection Life & Health Insurance Long Term Care Insurance Guaranteed College Scholarships College Funding Solutions Executive & Employee Group Benefits Charitable Contribution Strategies

www.HRProfessionalsMagazine.com

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