From regulatory rule changes to keeping pace with marketplace competition, here are a few items that are looming on the Human Resource Horizon in 2016:
FLSA Overtime Changes – The final rules were expected to be announced early 2016, but due to the overwhelming 270,000 comments received, it is likely the announcement and the effective date will be delayed until summer. What we do know for certain about the final rules:
- The current minimum salary threshold a worker must hit to be overtime-exempt is $23,660. The proposed rules seek an increase to $50,440. And while it may not climb quite that high, it will climb.
- The salary threshold will be tied to an automatic-escalator, so it can keep pace with inflation.
- The DOL is considering making changes to the duties tests. The DOL specifically asked for comments regarding on whether the current duties tests are working to screen out employees who are not bona fide white collar exempt employees.
Human Resource professionals continuing to explore and utilize analytics to gain data-driven insights on human resource initiatives and challenges such as recruiting and retaining employees, compensation, merit increases, performance and motivation incentives as well as changes such as minimum wage increases, and the rising costs of healthcare.
Employee engagement continues to be a priority as it is linked to productivity, profitability and customer engagement. Engaged employees can foster innovation, and drive growth and revenue needed to thrive.
Succession planning and next generation leadership development will be critical with more than 3.6 million baby boomers set to retire next year while millennials are expected to account for nearly half of the global workforce by 2020. With so many millennials entering the workforce as well as taking over management positions, companies are forced to look at changes that millennial employees are demanding. For example, millennials want regular feedback, instead of annual performance reviews, and virtual learning instead of printed manuals. This new generation will lead with transition, possibly flattening corporate hierarchies, empowering others and forcing companies to make a positive impact on society.
With the rise of telecommuting, co-working spaces, globalization and new technology tools, workers are demanding flexibility. It is expected that nearly every company will have a flexible work arrangements policy in the next few years.
Obamacare is adding new financial burdens as well as data tracking and reporting complexities to companies. In 2016, Obamacare penalties will go into full effect. For individuals who don’t have health insurance, they will be fined $695, up from the $95 penalty in 2014. Next year, 95% of companies with 100 or more employees will need to be insured, and companies with 50 to 99 employees will have to insure full-time workers. This could lead companies to lay off workers to save money, which puts more pressure on current workers to do more with a smaller headcount. It also adds more work for the HR benefits department. For employers with 50 or more full-time employees or full-time equivalent employees, the Affordable Care Act has transformed what was once an annual enrollment event into a monthly process of tracking and reporting extensive data from multiple systems. To avoid costly penalties it will be become more important for businesses to consider an integrated human capital management solution.
An HR issue we’re hearing more about during the 2016 presidential campaigns is paid family leave. Providing paid leave for new parents or when an employee needs to care for a sick family member is not a new concept. Several states have implemented some type of paid family leave benefit, and paid medical leave is being pushed by worker groups who do not want sick workers to come to the workplace while they may be both contagious and less productive.
Other areas in the regulatory realm that employers will be talking about in 2016 include possible changes to regulations regarding contract or contingent workers. The recession has led more companies to increase their percentage of contingent workers. This will definitely increase the pressure for further regulation amongst this job segment.
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