POTENTIAL FOR 2019 IN THE LABOR AND EMPLOYMENT LAW AREA

While 2018 ushered in some important changes at the federal level in labor and employment law such as:

The Fair Labor Standards Act is amended to address tipped employees and tip ownership

The Tax Cuts and Jobs Act which impacts certain deductions and reporting provisions

Regulatory interpretations from the NLRB which reversed course from its previous decisions

It saw its strongest “advocate” in the passing of new laws from the local and state arena. What will be some of the continuing trends for 2019?

We believe employers should continue to prepare for the following trends:

As marijuana use, both recreational and medicinal, become more widely accepted at state and local levels, look for more court’s and administrative interpretations with respect to zero tolerance drug policies

Required sexual harassment training

Increase in mandatory paid and unpaid time off including sick leave, military leave, and family leave

Restrictions on salary history questions

Cybersecurity requirements for the protection of employee data and employer procedures for dealing with breaches

Additionally, employers should keep their eye on minimum wage increases (both state and local) during 2019, “ban the box”, predictive scheduling and [at the federal level] the continued NLRB’s “reverse course” in the previous administration’s decisions as well as potential immigration policies.

Guest author: Pautsch, Spognardi & Baiocchi Legal Group (www.psb-attorneys.com)

MINIMUM WAGE UPDATE – JANUARY 2019

The current federal minimum wage, under the Fair Labor Standards Act (FLSA), is $7.25 per hour which has been in effect since July 2009. States have the ability to set a rate that is higher than the federal minimum rate and employers are obligated to pay the higher rate. Currently, there are 29 states that have laws at the state or local level mandating higher pay than the federal rate.

On September 4, 2018, the Department of Labor published a Notice in the Federal Register to announce that, beginning January 1, 2019, the Executive Order 13658 minimum wage rate is increased to $10.60 per hour. This Executive Order minimum wage rate generally must be paid to workers performing work on or in connection with covered contracts. Additionally, beginning January 1, 2019, tipped employees performing work on or in connection with covered contracts generally must be paid a minimum cash wage of $7.40 per hour.

Voters across many states approved ballot measures to raise their state minimum rates over time, with increases occurring through 2020 and beyond. There are 19 states which have an increase that takes effect on December 31, 2018 or January 1, 2019, including: 1) Alaska, 2) Arizona, 3) Arkansas, 4) California, 5) Colorado, 6) Delaware, 7) Florida, 8) Maine, 9) Massachusetts, 10) Minnesota, 11) Missouri, 12) Montana, 13) New Jersey, 14) New York, 15) Ohio, 16) Rhode Island, 17) South Dakota, 18) Vermont, 19) Washington.

For more details, click on the following link to view the WageWatch Minimum Wage Chart with details of federal, state and local minimum wage increases: WageWatch – U.S. Minimum Wage Increases. In addition to the statewide minimum wage increase, multiple states have approved minimum wage increases that are higher than the statewide average. (The increases are referenced in the attached Excel spreadsheet). There is one state, Oregon, and the District of Columbia that have scheduled their wage increase to begin on July 1, 2019.

Although there are no statewide minimum wage increases, there are several states in which specific cities and/or counties which have wage increases scheduled to occur on 1/1/2019; these states include: Illinois, Maryland, and New Mexico.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

THE BOOMER GENERATION IN THE WORKPLACE

It is not uncommon for baby boomers to now work side by side with co-workers from generation X and generation Y. Each of the generations in the workplace today grew up in times with widely varying political and social issues, technology and other factors, which have affected their attitudes on everyday life. As an employer, it’s important that you understand each of the generations you employ in order to provide them with the work environment and rewards that make them most happy.

The basic employment packages for businesses are based on the needs of baby boomers, a very loyal generation of workers, typically staying with the same company for many years. Employees of this generation value their benefits, such as health insurance, life insurance, and vacation time. To determine if their company is providing salaries and benefits that are on target with the industry average salary, many employers turn to market compensation and benefit survey data. These baby boomer employees that have stayed with a company for most of their careers have invaluable knowledge and experience that is essential to business operations, so it’s important that employers keep them happy and reward them for their loyalty.

While it is important to keep baby boomers satisfied by analyzing market compensation data, benefit survey data and salary reports, it is also essential for employers to look at the needs of the upcoming generations. Many baby boomers are in management positions but will start to retire around the same time leaving a large number of open positions. It is essential that skilled employees of the X and Y generations be ready to take their place.

The new generations of workers enjoy benefits like the baby boomers, but these employees prefer additional incentives and small tokens of appreciation for their efforts. This generation is not as loyal to the companies they work for, and have no problem moving to a job at another company every two or three years. For this reason, it is even more important to build loyalty with employees of these generations by providing them with the benefits and incentives they desire. It is very beneficial for companies to use benefit survey data, market compensation data, and salary reports to determine the types of compensation, including incentives that are standard for the industry. Having this data will help companies to stay competitive with other employers by creating appealing benefits packages that will attract and retain top talent.

Today’s world moves fast, and as an employer, you should constantly be monitoring and adjusting your business operations to meet the ever-changing wants and needs of your employees. At WageWatch, we offer accurate, up-to-date benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including market compensation data, benefit survey data, and salary reports, please call WageWatch at 888-330-9243 or contact us online.

U.S. HOTEL INDUSTRY WAGE GROWTH OUTPACES NATION

With unemployment shrinking to 3.7%, as recently reported by the U.S. Bureau of Labor Statistics, the labor market is the tightest it has been in 50 years.

New job openings continue to exceed the numbers reported as unemployed, which puts finding and retaining talent front and center for the hotel industry as hotels compete for new employees with each other and with other industries such as healthcare, food service and retail.

The forecast by STR, parent company of Hotel News Now, of new hotel openings at or around 2% a year through 2019 means hotel room count will increase by an estimated 150,000 to 200,000 rooms by the end of next year. In terms of housekeepers alone, this equates to another 10,000 to 13,500 new employees just to clean the rooms. Overall, the hotel industry has reached a new employment high every month since the end of the Great Recession and the recovery of the hotel industry beginning in 2010.

The tight labor market also has driven up wages across the country. Salaries for jobs ranging from line positions at front desks and restaurants to GMs have increased well above the general wage increases experienced across the U.S. Average annual wage increases in the hotel industry began to exceed 3% a year in 2014 and in 2018 surpassed 4%, compared to a national average wage increase of 1.9% in 2014 and 2.8% in 2018, according to data from the Bureau of Labor and Statistics and WageWatch.

Even with wage increases in the hotel industry substantially higher than those in the private sector, human resources departments at hotel companies are finding it difficult to obtain and retain new employees. Some of the issues that are repeatedly reported across the country include:

Difficulty hiring quality candidates who can pass a background check and a drug screening
New employees have a difficult time adhering to company attendance policies
High expectations by new employees of accommodations to be made by employers
A trend of applicants not showing up for job interviews
New millennial hires seem to be continually looking for their next gig

Looking ahead to 2019, wages in the hotel industry could see increases of 4% to 4.5% across the country, which could have a significant impact on bottom lines.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

STRATEGIC ISSUES AND THE PAY MODEL

Perceptions of compensation vary. It is seen as a measure of equity and justice. Stockholders are focused on executive compensation. Legislators may view average annual pay changes as a guide to adjusting eligibility for social services. Employees see compensation as a reward for their services and a job well done. Managers will view compensation from the perspective of a labor cost, but also from a competitive perspective that enables them to recruit, engage and retain employees. The four basic compensation policy decisions that an employer must consider in managing compensation are: 1) internal consistency, 2) external competitiveness, 3) employee contributions, and 4) administration of the pay system. The balance between the four policies becomes the employer’s compensation strategy.

It is important that compensation is linked to an organization’s overall goals and strategies and aligned with the Human Resource strategy. Not doing so, can lead to serious issues of employee retention, engagement, and productivity that can be laborious and expensive to repair. Compensation for many organizations is the single largest business expense and is visible and important to employees, managers, and stockholders. Therefore it is important to strategically plan and regularly evaluate compensation systems. Working with your company’s executives is critical to ensuring your compensation philosophy is supporting business objectives. Strategic objectives will include significant challenges and priorities now and over the next two to five years. Some examples are business growth plans, key talent and training objectives, market competition, and whether or not you are in a union environment. Some other key considerations for your compensation program are:

Attracting the appropriate skill sets and types of employees when needed
Rewarding employees for their efforts, such as increasing workloads, taking on new tasks and projects
Employee morale and perceived value of the company’s benefits, incentives, and work environment
A mix of base pay, incentive pay, work environment and benefits that makes the most sense for the organization
The link between base and incentive pay with performance
Legal issues such as wage and hour

An example of a compensation strategy that aligns with other Human Resource initiatives is matching pay ranges to the desired outcome. If quality, experience, and a sophisticated skill set are a strategic advantage to an organization, then it will not be successful in hiring employees significantly below the market rate. Determining whether the organization wants to lead, lag, or match the market is a key decision. A ‘mixed market position’ approach has become more common as employers realize that a one-size-fits-all strategy does not fit the entire workforce. For example, location and market competitiveness will impact your pay levels and certain key or hard to fill or retain positions may require pay well above the market, while other positions may be ok with a lag approach.

A successful compensation program will focus on top priorities, guide employees to where their effort can create the most value, create financial and non-financial consequences for success and failure, drive and reward the development of skills and encourage teamwork and collaboration. Many organizations today keep an eye toward aligning workers’ interests with company goals through innovative types of rewards in the workplace, including skill-based pay and goal sharing. The right total rewards system is a blend of monetary and nonmonetary rewards offered to employees and can generate valuable business results. These results range from enhanced individual and organizational performance to improved job satisfaction, employee loyalty, and workforce morale.

Maintaining a competitive advantage and being able to retain key employees is increasingly important. At WageWatch, our compensation consultants can assist with your organization’s compensation needs and help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online .

PLANNING AN OFFICE HOLIDAY PARTY?

Hosting a holiday party has been a tradition among many companies as a way to reward employees, boost morale, and encourage team spirit. This year, fewer employers are planning to host a party. Based on a recent study, only two-thirds of companies intend to host a holiday party, the lowest percentage since 2009. Economic factors do not seem to be a reason as companies report tax savings and a thriving economy.

Among companies sponsoring a party, nearly 60 percent have real concerns about sexual harassment and inappropriate behavior, especially in light of the #MeToo movement. More than half of these companies have addressed the #MeToo issue this year and if not, one-third indicated that they will do so prior to the party.

If you are planning a holiday party, there are some proactive steps that can be taken to lessen your company’s liability:

Establish written anti-harassment policies and publish in employee handbooks; reference the policies prior to the holiday party
Send a memo to remind employees to act responsibly and professionally (address company’s stance on pictures being posted to social media as well as the dress/attire for the party)
Ensure employees understand attendance is voluntary (especially when held outside of normal work hours)
The focus for the holiday decorations, music, and gifts should be seasonal in nature and not religious
Emphasize to management that they should lead by example
Consider having a holiday party in which no alcohol is served
Hold the party offsite; it limits the company’s liability
Set-up a cash bar—guests will drink less if they are required to pay
If alcohol is served, set a tone of moderation. Consider providing a limited number of drink tickets per guest, restrict the types of alcohol served, and/or only serve alcohol for a limited time
Consider featuring activities/games at the party, it encourages team-building and diverts attention away from cell-phones (also limits focus on drinking)
When alcohol is present, offer non-alcoholic beverages and always serve food
Stop serving alcohol toward the end of the evening and switch to coffee, tea, and soft drinks
Arrange for alternative transportation; encourage employees and guests to use it if they consume any alcohol

While these tips are not a guarantee against holiday party problems, they can be a good foundation for an effective defense against liability if problems should come to pass.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

EMPLOYEE RETENTION STRATEGY

Employee retention is important to organizations in order to facilitate achieving a company’s goals and objectives. HR leaders consider improved retention a high priority over the next five years. Although retention is considered a priority, efforts to increase it have been stymied due to competing priorities and a lack of resources. The side effects of turnover are not only financially based, but are noticed in decreased productivity, knowledge loss, and a lowered morale.

Some interesting statistics on employee retention include:

About 3 million Americans have QUIT their job each month since June 2017 (US Bureau of Labor Statistics)
30% of employees leave a new job within the first 90 days of employment (Jobvite)
51% of employees are looking to leave their jobs (Gallup)
Companies that support remote work have 25% lower employee turnover than companies that don’t (Owl Labs)
35% of employees report that they’d look for a new job if they did not receive a pay raise within the next year (Glassdoor)
44% of employees would consider taking a job with a different company for a raise of 20% or less (Gallup)
71% of retirees who returned to work originally retired due to a lack of flexibility in their work (Global Workplace Analytics)

With nearly one-third of employees leaving a new job within the first 90 days after starting a new position, it is important to understand the dynamics causing employees to quit. The top reason cited was that the day-to-day role was not what the employee expected. Other top reasons include: the employee had a bad experience that drove them away and the company culture lacked transparency.

Before addressing retention, the first step is to make sure that you hire the right employees—hire selectively. It is important to ensure that the new hire has the right skills for the position as well as being a good fit with the company culture, the manager, and the coworkers that they will interact with on a daily basis.

Once hired, onboarding and orientation activities will help to set new hires up for success. These activities can last for a few weeks or months depending on your organization. Aim to develop an onboarding process in which new staff members not only learn about the job but also the company culture and how they can contribute and thrive, with ongoing discussions, goals, and opportunities to address questions and issues.

Establish mentorship programs to pair a new employee with a mentor. The mentor can provide a wealth of knowledge and resources to the new employee while the new employee can offer a fresh viewpoint to the mentor (mentor should not be the supervisor).

Offering an attractive compensation package is essential in this competitive market. This includes salaries as well as bonuses, paid time off, health benefits, retirement plans, and other perks that distinguishes one workplace from another.

Work-life balance is important; burnout is a factor that impacts retention. What is your company’s culture? A healthy work-life balance is important and employees need to know that management understand its importance.

Employees like to feel that they have the possibility for advancement. Training and development programs send a message that the employer is interested in their career growth. It is import for managers to ask their direct reports about their career goals and determine how they can help them achieve their goals.

Providing opportunities for open communication and feedback is essential for employee retention. Direct reports need to feel that they can voice their ideas, questions, and concerns. In return, employees want management to be open and honest in their communication, especially feedback about their performance. Employees desire ongoing feedback about their performance.

Recognize accomplishments of both the individual employee and the team. This can be as simple as a thank-you note or as elaborate as setting up a group excursion. It is important to celebrate successes—to help employees feel engaged in their work environment

Employee retention matters; it is important to understand what is causing turnover within your organization. Employee exit interviews provide information that can help retain your remaining staff.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

HOW ABOUT A SIX HOUR WORKDAY?

Can a move to a six-hour workday increase productivity and the happiness quotient of employees and their families and at the same time increase productivity and company profits? In the U.S., more than 60 years after workers, through their unions, began organizing for an eight-hour day in the 1860s, President Franklin D. Roosevelt signed the Fair Labor Standards Act in 1938 for all workers to see limits on working hours – initially, it was set at 44 hours a week, then reduced to 42 hours, and by 1940 the work week was reduced to 40 hours.

Some businesses in Sweden have experimented with a six-hour workday with the hope of getting more accomplished in a shorter amount of time and ensure that employees have the energy to enjoy their private lives. This change is purely experimental—one that has not been mandated by law nor implemented nationwide.

A Toyota vehicle service center in Sweden’s second largest city, Gothenburg, moved to shorter days fifteen years ago. The service center reported a happier staff, a lower turnover rate, and an increase in profits during that time. The new system keeps the garages open longer and generates new business. Employees are doing the same amount in the six-hour workday, often more than they did in the eight- hour day. The service center reports that employees have more stamina to do this heavy work, and they have seen greater profits and customers because cars are getting fixed faster.

A high-profile case is the publicly funded Svartedalens nursing home in west Sweden. They began a trial a six-hour day to determine if the cost of hiring additional staff members to cover the hours lost, was worth the improvements to patient care and the boosting of employees’ morale. The nursing home had 80 nurses working six-hour shifts (maintaining their eight-hour salaries) while 80 staffers at another nursing home worked their standard hours. Halfway through the test period, the nursing home with the six-hour workday had half the average sick leave, the nurses were happier, and the care was better. The study, however, equates productivity with a quality of care, which doesn’t necessarily translate to white-collar work.

A number of startup companies announced that they are testing the concept. The companies include Background AB, a creative communication agency in Falun, Dalarna and Filimundus, an app developer based in Stockholm. Linus Feldt, Filimundus CEO believes that staying focused on a specific work task for eight hours is a huge challenge. During an eight or more hour workday, employees take frequent breaks and look for distractions and diversions such as social media to make the workday more endurable. With the six-hour workday, staff members at Filimundus are not allowed on social media, meetings are kept to a minimum, and the company does it’s best to eliminate other unproductive distractions.

Most of the companies who have made the shift to the six-hour workday have reported a positive impact, from increased efficiency to better communication and fewer staff sick days. A 2014 Stanford University research paper found a “non-linear” relationship between hours worked and productivity, as well as too much work, can actually impinge productivity. According to a study by the Families and Work Institute, overworked employees make more mistakes. Research has shown that condensing work into more efficient hours is very unlikely to hurt productivity. There is no need to lower pay and in fact, companies are likely to save money through less sick and personal leave, less stress leading to better health, and lower turnover costs.

The six-hour work day would be less acceptable in the U.S. because the eight plus hour workday ethic is so deeply embedded in our culture. According to Gallup’s 2014 poll, full-time employees in the U.S. work an average of 47 hours per week. However, even with encouraging results, it’s unlikely that the U.S. will shift to shorter days any time soon. The rest of the world (outside of Europe) a 40 hour work week would be a very nice improvement as well.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

BENEFITS & PERKS–ATTRACTING & RETAINING TOP TALENT

In today’s tight job market, many employers realize that they need to take a closer look at their benefits package in an effort to attract and retain employees. How often have you found a qualified candidate that you hope to hire only to learn that they decide to go with another position? Most likely, the candidate has found another job in which the benefits offered by the competition were more attractive.

When reviewing the development of benefits and perks for your company, it is valuable to understand the differences. Benefits are a form of non-wage compensation that supplement salary (e.g., health insurance). Perks are a form of non-wage compensation (e.g., work from home Fridays), but unlike benefits, are more loosely defined and vary greatly.

Glassdoor indicates that 57% of job seekers list benefits and perks among the chief determinants when evaluating jobs. Benefits and perks impact recruiting efforts as they help to get prospective talent interested in a company and through the door.

The primary benefits and perks that prospective job seekers value most when considering a new position include (listed in order of importance):

Better health, dental, and vision insurance
More flexible hours
More vacation time
Work from home options
Retirement benefits; pension plan, 401K

Although there are some new, innovative benefits and perks being offered such as free-snacks or nap pods—the top benefits/perks valued by many employees are those that improve their work/life balance.

Some innovative, non-traditional benefits/perks offered by large companies and tech-based companies include:

Unlimited vacation
Student loan assistance
Free gym membership
Free day care services
Free fitness or yoga classes offered on-site
Catered breakfast and/or lunch
Company-wide retreats
Paid volunteer days
Paid parental leave for moms and dads (16+ weeks)
Dedicated game rooms
Nap rooms

Although the benefits and perks offered can help get prospective talent through the door of your organization, once hired, it is the culture, values, and career opportunities that are the leading factors in employee satisfaction. Employee interests vary depending on company size, industry and demographics. To find the benefits package that best fits your business, it’s important to survey employees about what they value most.

WageWatch offers accurate, up-to-date HR metrics, benefit survey data, market compensation data, and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is a custom-built survey tool that allows individual survey participants to select their competitive set for comparison purposes. Our experienced compensation consultants can assist with your organization’s compensation needs. We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

THE IMPORTANCE OF EMOTIONAL INTELLIGENCE IN HUMAN RESOURCES

Emotional Intelligence is about an individual’s ability to recognize and understand emotions and how it impacts their behavior and attitudes. Individuals who have a high degree of emotional intelligence are more in tune with their own emotions as well as the emotions of others.

In the workplace, emotional intelligence involves being sensitive to and perceptive of other people’s emotions and having the ability to intuitively improve performance based on this knowledge. Individuals with high emotional intelligence are observed and measured as having higher productivity, they are better at conflict resolution, and they build strong bonds with co-workers as they can more easily understand the desires and needs of other people.

In the modern workplace, it is important to have open communication, teamwork, and a mutual respect among employees and their supervisors. Emotional intelligence bears an important impact on the self-development of the manager and their leadership qualities. Its impact is visible in building positive relations and gaining the emotional commitment of employees. At a higher level, emotional intelligence helps to strengthen organizational culture, sharpen its resilience, and stretches its flexibility. Managers who possess emotional intelligence approach supervisory responsibilities from a different perspective than an authoritarian manager. They understand the importance of communicating effectively with staff members, and of treating each employee with respect.

Human Resources can help create a more emotionally intelligent workforce by hiring employees who exhibit a high emotional intelligence, by evaluating employees using emotional intelligence criteria, by integrating emotional intelligence into performance management systems, and by offer training to improve emotional competence. An emotionally intelligent organization in which employees share strong connections and are able to work more effectively with each other should result in greater productivity.

Managers and business owners can’t let themselves lose sight of the fact that their employees are people, with real lives and emotions that impact how they think, feel, and act. Managers with emotional intelligence understand that their staff members are people first and workers second. Incorporating emotional intelligence into your personal and organizational management philosophy may be the best way to retain key employees and help with overall organizational success.