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ASKING ABOUT SALARY HISTORY COULD SOON BE ILLEGAL

It has long been customary for employers to gain salary history from job applicants to help determine an applicant’s qualifications for a position.   Some employers have requested W-2 forms have in order to gain an accurate picture of an employee’s background and determine if an applicant’s salary history is in line with is being offered. Federal laws do not prohibit requesting the information, however, some states and cities have already taken steps to outlaw employers from requesting salary history.

With the objective of pushing to fight wage discrimination and the gender pay gap, a bill was recently introduced in Congress that would ban salary questions across ALL states.  The bill forces employers to develop salary offers based on job requirements and market pay levels rather than an applicant’s current salary or salary history, which may be lower than current market rates for some individuals’ skill and experience.

The following cities and states have banned salary questions by public and/or private employers:  (*Effective Date; E.D.)

  • California – (E.D. Jan 2018); banned private and public employers from asking about pay history
  • Delaware – (E.D. Dec 2017); banned ALL employers from asking salary history
  • Massachusetts – (E.D. Jul 2018); prohibits ALL employers from inquiring about pay history
  • New Orleans – (E.D. Jan 2017); banned inquiries from city departments and employees of contractors who work for the city
  • New York City – (E.D. Oct 31, 2017); banned public and private employees from asking salary history
  • Oregon – (E.D. Jan 2019); will ban ALL employers from inquiring about salary history
  • Philadelphia – (E.D. was May 23, 2017—on hold) bans ALL employers from asking salary history; halted from going into effect by Chamber of Commerce; still pending
  • Pittsburgh – (E.D. Jan 30, 2017); Bans only city agencies from asking candidates’ pay history
  • Puerto Rico – (E.D. Mar 2018); bans employers from inquiring about pay history

When an employer ceases to rely on salary history of an applicant, it requires making a clear, market-based case for pay, the challenge falls on the employer.  It will be important to create a salary range for each position and ensure that the variations within those ranges are based on things like merit, education, and experience. Some companies welcome a strictly market-based approach to making salary offers as it has the ability to foster greater transparency.  Whether or not your jurisdiction is covered by the new laws, the trend is increasing and may soon impact your organization.

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 the only Web-based custom 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.

Posted in Uncategorized on February 14th, 2018 · Comments Off on ASKING ABOUT SALARY HISTORY COULD SOON BE ILLEGAL

ARE YOU ATTRACTING TOP TALENT?

Organizations are finding it to be a huge challenge to attract and retain a group of talented and hardworking employees that are loyal to the company and its mission.  Finding high caliber employees with advanced skills to perform important jobs within a company is a challenge, especially as unemployment continues to decline.  Everyone is looking for top talent, and those companies that excel in attracting and retaining this talent are the ones that will reap the rewards.

To retain talent, it is essential that loyalty is established.  In order to do this, the employee must feel that their job is instrumental in achieving the goals of the company, making them excited to come into work each day and give it they’re all.  It is also important that the work the employee puts in is acknowledged, affirming their place within the company, and offering them opportunities for growth.

While compensation and benefits packages are one of the largest factors considered by employees, it isn’t enough to make the top talent stay.  The following are a few ways that you can attract and retain the best employees at your company:

  • Promote Open Communication
    When a company is completely open with employees, everyone will feel respected. Instead of allowing rumors to spread, let your employees know as soon as possible about anything that is going on in regards to the company. When possible, let your employees be a part of the decision making process. A culture of open communication is very attractive to employees.
  • Provide Opportunities for Team Building
    Most employees enjoy interacting with their coworkers.  By encouraging teamwork, employees are able to build great working relationships and establish a trusting, open environment for the company.  When working together toward a common goal, employees are more motivated and excited about their jobs, often producing excellent results.
  • Cater to Individual Work Style
    Each employee has a different way that they prefer to work, learn and be managed.  When you as an employer take the time and effort to make adjustments for each employee’s needs, they will respect the company more and loyalty will, once again, be built.  This will also help you to establish teams that will work best together based on their work styles.
  • Acknowledge Your Talent
    When an employee does a good job, it is important that you recognize them for their efforts, so they feel that they are a valued member of the team.  A majority of employees leaving a company do so because they feel unappreciated.  Employees want to feel that the work they are doing is making a difference, so acknowledging their work often is essential.  Also, review surveys for 2013 healthcare compensation, 2013 casino compensation and other market compensation data surveys for your industry to determine what benefits and bonuses you should be rewarding your employees with.

Implementing the above suggestions will help your company to build a culture that encourages retention of employees, which in turn will attract top talent.  In addition to providing a great work environment that respects employees and provides opportunities for learning and growth, it is also important that they receive a solid benefits package.  At WageWatch, we provide accurate data for 2013 healthcare compensation, 2013 casino compensation and compensation information for a wide variety of other industries.  To learn more about our up-to-date market compensation data, such as 2013 healthcare compensation surveys or university benefits surveys, call 888-330-9243 or contact us online.

MOTIVATING EMPLOYEES BY JOB DESIGN

With changing demographics and a more competitive job market, human resources is more challenged than ever before to hire, engage, maintain, and keep employees happy and motivated.  Workers want more choice and flexibility in how they approach tasks, for example, more opportunities to work collaboratively.  They look for more opportunities to change duties, for exploration, to learn, and to advance in their career in a less linear way.  It is not only desirable but essential for businesses to have motivated employees.  Today many human resource professionals are looking at how to design jobs, work environments, and cultures that motivate employees.

Job specialization is the earliest approach to job design.  Job specialization is efficient but leads to boredom and monotony.  Early alternatives to job specialization include job rotation, job enlargement, and job enrichment.

Job rotation involves moving employees from job-to-job at regular intervals.  When employees periodically move to different jobs, the monotonous aspects of job specialization can be relieved.

Job enlargement consists of making a job larger in scope by combining additional task activities into each job through expansion.

Job enrichment is concerned with designing jobs that include a greater variety of work content, require a higher level of knowledge and skill, give the worker more autonomy and responsibility, and provide an opportunity for personal growth.

Research shows that there are five job components that increase the motivating potential of a job:  skill variety, task identity, task significance, autonomy, and feedback.

  • Skills
    • People will be more motivated if they are using a variety of skills in their positions, rather than one thing repeatedly.
  • Tasks
    • Employees are motivated to complete tasks if they identify with them and have seen them through from start to finish.
    • When employees feel that their work is significant to their organization, they are motivated to do well.
  • Autonomy
    • Employees like to be able to make decisions and have flexibility in their roles. Most employees will have lowered motivation if they feel they have no freedom or are being micromanaged.
  • Feedback
    • Employees need feedback (both positive and negative) in order to stay motivated.

Quality of life in a total job and work environment is also an important part of a positive and motivating experience for employees.  The elements included in ‘quality of life’ include open communication equitable reward system, employees’ job security, and satisfaction, participative management, development of employee skill, etc.  Since a significant amount of one’s life is spent at work, jobs need to provide satisfaction for sustained interest.  Jobs provide employees not only a living but also help in achieving other goals such as economic, social, political, and cultural.

The concept of empowerment extends the idea of autonomy.  The idea behind empowerment is that employees have the ability to make decisions and perform their jobs effectively.  Instead of dictating roles, companies create an environment where employees thrive, feel motivated, and have the discretion to make decisions about the content and context of their jobs.  Empowerment is a contemporary way of motivating employees through job design.

A growing body of research on the relational structures of jobs suggests that interpersonal relationships play a key role in making the work experience important and meaningful to employees.  Interpersonal relationships can often enhance employees’ motivations, opportunities, and resources at work.

Though employees need to have some intrinsic motivation (internal motivation) to complete the tasks assigned to them in their roles, they also need to be motivated by their employers.  By designing jobs that encompass all of the core characteristics, you can help increase employee motivation, in turn improving performance.

WageWatch 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, incentive, and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is the only Web-based custom 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.

HAS THE #METOO MOVEMENT IMPACTED YOUR HARASSMENT POLICIES?

Up to 86% of women report that they have been sexually harassed at work, based on a 2016 Equal Employment Opportunity Commission (EEOC) report.  The #MeToo Movement is creating an environment that provides a feeling of a support group, that you are not alone if you come forward.  The impact of this movement carries over to the workplace with the pitfalls of harassment being great; including millions of dollars in settlements, low employee morale, high-job turnover, increased sick leave, and low productivity.  According to the 2016 EEOC report, it indicates that employers paid $699 million to workers alleging harassment going back to 2010—which does not include indirect costs such as lower productivity or high turnover.  Federal law caps the damages at $300,000, however, under many state laws there are no limitations and juries have awarded substantial verdicts in egregious cases.

There is now a definition in Wikipedia of the Weinstein effect– defined as a global trend in which people come forward to accuse famous or powerful men of sexual misconduct.  The Institute for Corporate Productivity conducted a survey among professionals to gauge how Human Resources are helping their organization handle the impact of this movement.  Information from the survey concludes that one-in-five organizations are taking steps to prepare to handle an increase in new (and renewed) sexual harassment claims, a quarter of respondents report that they have a plan in place or are devising one.  Over 70% of respondents state that their sexual harassment training is mandatory with half indicating that the training is effective.  Only half of the respondents report that they trust HR to handle sensitive issues effectively.

Organizations need to determine how to move forward with their previous policy and what changes need to be made.  Questions to consider include:  What constitutes crossing the line?  Are there degrees and distinctions?  Employers need to use clear, concrete language to communicate standards of behavior to employees in the workplace that are unacceptable.  Some steps to take to review policies include:

  • Develop clear, concrete language to communicate standards of behavior in the workplace among colleagues, vendors, and clients
  • Update training and policies on training; no more ‘click-through training and complete as fast as possible’
  • Provide an extra level of training to managers as they are likely to receive the complaints
  • Determine how incidences should be reported (ombudsman, hotline, or third-party)
  • Improve reporting procedures so transparency makes the “whisper network” visible
  • Be accountable—not just the perpetrator but by the bystander as well. Men and women who see harassment in action should let the victim know they are supported
  • Encourage the CEO to develop and distribute an email to employees affirming the company’s zero tolerance against harassment and ensure that the CEO backs it up

An example of the recent impact of the movement was reflected in changes some organizations made to their annual office holiday party in December–it was scrutinized much more closely. A survey by an outplacement consulting firm found that only 49% of companies planned to serve alcohol, down from 62% in 2016.  Other companies’ limited alcohol drinks by providing two drink tickets.

Overall, due to the current environment and openness toward communicating harassment, it is expected to be on the rise in 2018.  It will be important for your organization to review current policies and procedures, training, and communication of the company’s zero-tolerance policy.  Companies need to take accountability for not only acknowledging it but also being part of the solution.

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 the only Web-based custom 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.

Posted in Uncategorized on January 24th, 2018 · Comments Off on HAS THE #METOO MOVEMENT IMPACTED YOUR HARASSMENT POLICIES?

BEST PRACTICES FOR BONUS COMMUNICATION AND DELIVERY

The primary purpose of an annual incentive or bonus plan is to drive and reward behaviors that have an impact on the operating success of the company.  When designing your incentive plan you need to have a clear measurement system for what success is in your company and then make sure the measurements are meaningful to the employees who are doing the work.  For any incentive plan to be effective it needs to be meaningful and have clarity relating both to the plan provisions and to the results needed to earn and maximize an award and the award should be attainable.  Employees need to see a link between how their job performance affects results, and the award amount needs to be sufficient enough to motivate.

Generally, two to four performance metrics are included in a bonus plan design.  The metrics are primarily financial, though quantifiable business objectives can also be used. Corporate or business unit financial metrics are used to fund the incentive pool, and individual performance measures may also be used to determine final individual payouts.  Results that are measured can be quantitative and qualitative, such as customer service quality, the number of customers served, the effectiveness of programs, etc. Often a balanced scorecard approach is used.

Employers should give careful attention not only to the design but also to the implementation and communication of incentive programs.  The most common pitfall when creating a bonus program is inadequate communication.  Bonus plan communications should be both clear and timely.  Make sure the plan is communicated prior to the beginning of the bonus period and this initial bonus communication should address the structure of the plan, decision-making criteria, fairness, measurability, and target.  Equally important are follow-up communications regarding the progress toward attainment of the goals that should happen at frequent and regular intervals throughout the bonus plan period.  You want your employees to have an on-going understanding of where they are and what they need to do to meet and/or exceed their bonus target.

When bonuses are paid or awarded, clear communications again are very important.  Managers should have individual meetings with each bonus plan recipient and clearly communicate the outcome of the incentive period.  Whatever the amount, be sure to let the recipient know that he/she is valued.  Be sure to discuss specific accomplishments and strengths that went into the bonus award.  If the employee was expecting more, be sure to emphasize the broader context of the company’s approach to bonuses.   Let each person know how the bonus was calculated.  No matter what the award is, the conversation regarding the award amount is an opportunity not only for clarity and understanding, but to thank the individual for their hard work and to hopefully improve morale and motivate for future performance.

Employees want to know they are being fairly compensated for their work and their job performance.  Bonus plans that are meaningful to your employees and aligned with the bottom line of your company can help build morale and drive behaviors that are critical to the success of the company.

WageWatch 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, incentive, and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is the only Web-based custom 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.

Posted in Uncategorized on January 10th, 2018 · Comments Off on BEST PRACTICES FOR BONUS COMMUNICATION AND DELIVERY

MINIMUM WAGE UPDATE – JANUARY 2018

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 15, 2017, the Department of Labor published a notice in the Federal Register that Executive Order 13658, effective January 1, 2018, increase the minimum rate generally payable to workers performing work on or in connection with covered federal contracts to $10.35 per hour.

Also, voters across many states approved ballot measures to raise their state minimum rates over time, with increases occurring through 2020.  In 2018 there are 23 states, cities, or counties that scheduled an increase in their minimum wages.  There are 19 states which have an increase that takes effect on January 1, 2018, including:  1) Alaska, 2) Arizona, 3) California, 4) Colorado, 5) Florida, 6) Hawaii, 7) Maine, 8) Michigan, 9) Minnesota, 10) Missouri, 11) Montana, 12) New Jersey, 13) New Mexico, 14) New York (city/county only), 15) Ohio, 16) Rhode Island, 17) South Dakota, 18) Vermont, 19) Washington.

States with increases occurring on other dates in 2018 (typically on 7/1/2018) include:  1) Illinois (city/county only), 2) Maryland, 3) Nevada, 4) Oregon, 5) Washington DC.

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.

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.

Posted in Uncategorized on January 3rd, 2018 · Comments Off on MINIMUM WAGE UPDATE – JANUARY 2018

MINDFULNESS: EMBRACED BY BUSINESS

In a world where multitasking and information overload are the norm, an old idea, Mindfulness, is becoming increasingly appealing to organizations who are effectively applying it to their businesses.  Mindfulness is training the mind to focus. Our ability to concentrate is seriously compromised the more we multitask.  And technology, though useful to us in so many ways has actually impeded our ability to concentrate or to be mindful of what matters moment by moment

Many Fortune 500 and other organizations are embracing and promoting mindfulness for their workforce.  Business schools are beginning to teach mindfulness and it is included in many MBA programs. In the workplace, mindfulness is a skill that aids concentration, clarity and equanimity.  Present moment awareness keeps your mind from dwelling on the past or obsessing on the future.  Becoming more aware of what is going on around you allows us to be fully focused on the task at hand and more likely to spot opportunities.  Mindfulness also makes us more conscious of what is going on within us, helping to identify and remove subconscious thinking that can be obstacles to success.  Mindfulness also enhances creativity, innovation, and improves the brain’s ability to process information.  So it is not surprising that more and more corporations are embracing mindfulness as a business practice.

To be mindful is to be awake, to be conscious, to be aware and to appreciate the impact of one’s actions . Mindfulness is a mental state achieved by focusing one’s awareness on the present moment, while calmly witnessing one’s thoughts and feelings without judgment.  Mindfulness is a 2,500 year old tradition of Eastern Cultures that now is considered a science of the mind.  Many consider mindfulness to have its origins Buddhism; however, it can be traced back more than 2,500 years ago, when Hindus practiced a range of meditations, which included mindfulness.

It may be time to consider mindfulness, as a business skill.  Extensive research has been done over the last 15 years that show mindfulness is linked to psychological and physical, health.  It decreases blood pressure, regulates the heart, increases the immune function, and enhances memory.  It essentially, rewires our brain.  The idea that increasing mindfulness may lead to better decision-making deserves attention.

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 key 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 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 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 .

 

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 44 hours a week, then phased to 42 and eventually 40 by 1940.

Today some businesses in Sweden are trying out a six-hour workday hoping to get more done in a shorter amount of time and ensure people have the energy to enjoy their private lives.   This change is purely experimental and a voluntary 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 thirteen 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.

The most high-profile case in recent months is the publicly funded Svartedalens nursing home in west Sweden which started a trial of a six-hour day in February 2015 to continue until the end of 2016 when they will determine whether the cost of hiring new staff members to cover the hours lost is worth the improvements to patient care and boost of employees’ morale.  The nursing home has 80 nurses working six-hour shifts maintaining their eight-hour salaries while 80 staffers at another nursing home work their standard hours.  At halfway through 2016, the nursing home trying the six-hour workday has half the average sick leave, the nurses are happier and the care is better.  The study, however, equates productivity with the quality of care, which doesn’t necessarily translate to white-collar work.

Gothenburg’s Sahlgrenska University Hospital’s orthopedics unit switched 89 nurses and doctors to a six-hour day last year, hiring 15 staffers to ensure the hospital work got done.  The test was expensive, costing the hospital $123,000 a month, but no one has called in sick since it began and the nurses and doctors have been found to be more efficient.

A number of startup companies have announced that they are also testing the concept.  These 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.

Opponents of the six-hour workday feel that if Sweden were to adopt this standard, the economy would suffer from reduced competitiveness and strained finances.  The six-hour day has not been embraced by larger Swedish companies and other towns in Sweden that previously tested shorter workdays ultimately abandoned them.  In the northern city of Kiruna, officials scrapped a six-hour day for 250 municipal employees after 16 years, citing high expenses and resentment among workers who were not part of the program.

The six-hour work day would be less accepted in the U.S. because the eight+ 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.  It will be interesting to watch how the six-hour workday plays out in Sweden.  However, even with encouraging results, it’s unlikely that the U.S. will shift to shorter days anytime 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.

INDEPENDENT CONTRACTOR OR EMPLOYEE?

If it walks like a duck and talks like a duck, it’s a duck.  In other words, if you are treating the ‘independent contractor’ like an employee by doing things such as providing work materials and office space, designating working hours, providing training and direction regarding how and when to perform the work, then the ‘independent contractor’ is most likely an employee.  Independent contractor is defined by the Fair Labor Standards Act, IRS regulations, and the decisions of some courts.  Many states also have specific independent contractor regulations.  The IRS and many states have adopted common law principles to define an independent contractor. These rules focus primarily on the level of control an employer has over a service or product. For independent contractors, the company can direct or control only the result of the work done, and not the means and methods in getting to the result.

The rules are not always clear-cut to determine the correct status, but generally characteristics of an Independent Contractor include:

  • The work assignment is temporary and typically for a specific project
  • The work assignment is not an integral part of the business and is not something typically done by employees.

The Independent Contractor will:

  • Supply his or her own equipment, materials and tools
  • Pay for their own expenses
  • Control the hours worked
  • Determine how and when to perform the work
  • Retain a degree of control and independence
  • Operate under a business name and has his/her own employees
  • Advertise his/her business’ services and has more than one client

Some courts and federal agencies use an “economic realities test” which looks at the dependence of the worker on the business.  If a large portion of a worker’s salary is from one specific company, this may qualify the as an employee. Other factors considered are level of skill, integral nature of the work, intent of the parties and payment of social security taxes and benefits.

Misclassification of an individual as an independent contractor may have a number of costly legal consequences such as reimbursement of all wages including overtime, taxes and penalties for federal and state income taxes, social security, Medicare and unemployment, providing employee benefits and workers compensation for any injuries.

There is no set number of factors that makes the worker an employee or an independent contractor.  Also, factors which are relevant in one situation may not be relevant in another.  The best approach is to look at the entire relationship, consider the degree or extent of the right to direct and control the work, and be sure to document all factors used in your determination process.

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.