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HUMAN RESOURCES ROLE IN MERGERS AND ACQUISITIONS

Mergers and acquisitions are extremely challenging and even chaotic events.  Therefore, it is critical that everyone involved has a clear understanding of their role in the process.  Mergers and acquisitions have become the norm in the business world and are often necessary for survival.  Almost every major company in the US today has or will experience a major acquisition.  There is a subtle yet distinct difference between a merger and an acquisition.  A merger is when two separate companies merge into one new entity.  An acquisition is when one company buys the assets of another company.  A merger or acquisition can be desired due to many different strategic reasons including positioning in the market, acquiring another company’s areas of strength or expertise, acquiring capital, diversification and short-term growth.  There are several phases or steps in the acquisition process and human resources will typically be involved in at least 2 to 3 of these phases, including the due diligence and investigation process and the post-merger integration process.

The human resource role in the due diligence and investigation process is to perform a thorough review of all human resource contracts, benefit plans, plan documents, systems, personnel, employment records, all forms of compensation, policies and procedures, especially related to human resource regulations that relate to all human resource disciplines including compensation, benefits, recruiting, employee relations, training and development, and payroll and HRIS.  Human Resources will help to determine the organizational structure and staffing models for the new organization.  Some other important items that fall under the Human Resources umbrella are wage and hour or other compliance claims, employment litigations, collective bargaining agreements, any FMLA, OSHA, Workers Compensation, EEOC and OFCCP compliance issues.

Transition issues need to be discovered and addressed, for example, pay levels between the two organizations may be very different and a cost analysis may be needed to determine the cost of bringing pay levels more in line between the two merging entities.  Other transition issues that often need to be addressed are transitioning pay increase and performance review cycles, differences between benefit levels in health care and retirement plans.  Most items will need to be addressed immediately, and some items can be completed during the first or second year following the merger or acquisition.  For example, if the acquisition occurs in the first quarter and your merit increases are done in January, you may be able to wait until the following January for this transition.  Conversely, it will be highly desirable to transition the acquired entity employees immediately to your health and welfare plans rather than take on the administrative burden and ownership risk of additional plans.

Human Resources is also responsible for layoffs, stay bonuses, culture differences, and synergies and will play a key role in the orientation and welcoming of the new employees.  These are just a few key items on the Human Resources Acquisition Checklist.  And each item has its own list of key points and issues that must be addressed.  While most of the transition work will happen prior to the closing date, the job of transitioning employees into your policies, pay models, practices, procedures, and culture does not end at transition date and typically continues for 2 to 3 years following the transition date and requires continued review at the management level.

Change can be challenging and demanding.  With over 5,000 properties in our lodging compensation database, 150 casinos, and 125 hospitals and clinics, we regularly see properties being acquired, divested, and rebranded. Consolidations are occurring at a rapid pace in the healthcare industry as well with hospitals buying physician groups and primary care practices. There are numerous human resources concerns to address every time a property changes hands. WageWatch consultants can guide you through the process of integrating two or more compensation models, rebalancing grades and ranges, examining internal equities between plan documents, developing a market-based approach to resolving inconsistencies, and helping you along the way with all your transition needs.  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.

JOINT EMPLOYER LIABILITY

The use of sub-contractors, temporary staffing, leased employees and independent contractors can provide employers with quick temporary staffing and reduce benefits and payroll costs. However, the employer client can be considered a joint employer with the leasing or temporary agency when they share certain key employment terms such as the ability to hire, fire, or discipline workers, affect their compensation and benefits, and direct and supervise their performance.  When businesses use a temporary agency, leased, or contract workers, though the employer is the temporary help, leasing, or contracting company, the client business may be regarded as a joint employer under some laws.

The Family and Medical Leave Act have specific language regarding joint employer relationships. While the leasing or temporary help agency is the primary employer, the client company may be required to place the worker in the same or comparable position upon his or her return from FMLA leave.  Additionally, leased and temporary workers will count as employees of the client company for the purposes of determining whether a business is subject to the FMLA regulations.

In the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982, leased and temporary workers are the client’s employees for the purposes of qualifying retirement plans and certain fringe benefits such as life insurance and cafeteria plans (does not apply to health insurance benefits), if the workers have been engaged with the client company on a full-time basis for a minimum of one year and the client company primarily controls or directs their work.

An employer can face a charge of discrimination under Title VII anti-discrimination legislation brought by an individual who worked for the employer under one of these leasing or sub-contractor relationships.

It has also come into question with the National Labor Relations Board (NLRB) whether leased and temporary workers must be included in collective bargaining agreements that cover the client’s regular employees.

Some states have passed legislation on joint employer liability as it pertains to workers’ compensation regulation.  New York ruled that the client is the common law employer of leased employees and is therefore primarily responsible for providing workers’ compensation benefits. To date, there have been no guidelines for joint employer status under OSHA or other health and safety regulations.

Employers need to be aware of and have guidelines regarding the degree of control they have over these temporary, leased and contract workers. The greater the degree of control, the greater the likelihood that the employer could be determined to be a joint employer.

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.

AUTOMATION OF THE HOTEL EXPERIENCE IS THE FUTURE

(Note:  The following article was published in the June 7, 2017, Hotel News Now magazine; it was written by Randy Pullen, the founder and current CEO/President of WageWatch.)

Artificial intelligence and robots are here, and increasingly will be able to do much of the work in hotels. Coming to terms with that can help manage fears and uncertainty.

Hotels are on the edge of a new era driven by automation, artificial intelligence (AI) and robotics. Of course, I am not the first one to say this as there are many published articles extolling the virtues and sins of automation in the workplace and AI technology in the hotel industry.

Automation of guest messaging, mobile check-in and check-out, room assignments, motion detection, mobile key cards and facial recognition are already in service in many hotels around the world, and this is just the beginning.

A futuristic view is provided by Hideo Sawada, president of Sawada Holdings Co., which built the Henn na Hotel in Japan—Henn na is Japanese for “weird,” so this is the “Weird Hotel”—as a futuristic hotel and as a novelty add-on to an existing amusement park. The Weird Hotel is an automated limited service hotel, in operation though it has a few glitches that need to be worked out. Interestingly, it is not that highly rated by guests, but they keep coming to experience the future.

Tractica, a market intelligence firm focused on AI and robotics, forecasts global robotics market revenues to grow from $28 billion in 2015 to $151 billion a year by 2020. They predict the majority of the growth will come from “non-industrial” robots.

Tractica’s forecast does not include the future growth of AI and its impact on robotics. When you add AI to robotics what you end up with is a friendly robot that can learn and adapt to changes in the workplace. Both PricewaterhouseCoopers and McKinsey & Company have researched and written several white papers on the rapid advancement of AI and automation, and their coming impact on the workplace. In a study issued in March, PricewaterhouseCoopers estimated 38% of jobs in the U.S. would be automated by the early 2030s. For the accommodations and food service sector, they estimated that 25% of jobs would be automated.

While 25% of the jobs in the accommodations and food service sector amounts to more than 3.3 million jobs being automated, this is low when compared to other studies. A report issued by McKinsey & Company in July 2016 calculated that, of all industrial sectors, the potential for automation is the highest in accommodations and food service. According to that analysis, 73% of the activities performed by workers in accommodations and food service have the potential for automation. Essentially, up to almost half of the jobs in hotels and restaurants could be automated in the next decade and a half.

Both studies likely underestimate how rapidly AI and automation will transform the workplace and our personal lives. It is not possible to predict with accuracy the speed with which new technologies will advance. Disruptive technologies such as desktop computers and smartphones changed the workplace and our personal lives much faster than predicted when first introduced into the marketplace. I predict the assimilation of AI and automation into our lives will happen much quicker in what is now being called the Fourth Industrial Revolution.

Klaus Schwab, executive chairman of the World Economic Forum, stated in his address to the Forum in January 2016: “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work and relate to one another.” He goes on to say, “This will give rise to a job market increasingly segregated into ‘low-skill/low-pay’ and ‘high-skill/high-pay’ segments, which in turn will lead to an increase in social tensions.” I believe his is a linear projection of the future, not taking into consideration how human beings rapidly adapt to a changing environment.

As we have already seen, it is not just low-skill/low-pay jobs that are impacted by AI. Wall Street is going through a transition as financial advisors are being replaced by software programs with algorithms that make reliable, profitable investment decisions faster and with more accountability than humans. Speaking of accountability (note, I am a CPA), much of what accountants do is very susceptible to automation—audits, inventory tracking, supply chain automation and tax returns, just to name a few.

Hotels have already automated or are in the process of automating repetitive tasks for personal and work activities, and the rate of adoption is accelerating at a pace that was unimaginable just a few years ago. For the hospitality industry, all levels of the business—including the front of house, back of house and administration—are susceptible to automation in total or in part. Automation and AI are and will become the driving forces in the lodging industry, as management companies and team members learn to adapt and apply the new technology to improving the guest experience at their hotels.

As automation and robots with AI become the 800-pound gorilla in the workplace, the uncertainty of what people will do if their jobs disappear is always a fear. No doubt there will be a shift in jobs; however, new conditions create new opportunities. During the first Industrial Revolution, as people moved from the farms to the cities to work in factories, there was much turmoil; but in the long-term, the outcome was good as more jobs were created than lost. People learn to adapt to change and move from the old to the new as their expectations for the future change. We only need to look to our children to see the future. Kids say the future of tech is robots.

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.

 

ADVANCED COMPENSATION ANALYSIS

In order to stay in line with industry trends and economic ups and downs, salary ranges should be compared to market each year.  Adjustments to salary ranges may not be needed every year.  Depending upon how fast or slow the market is moving, adjustments normally are needed every 2 – 3 years.  During your annual salary range to the market analysis process, make notes and keep a record of any changes or movement that you see with any jobs and departments from year to year.  It is prudent to avoid making changes to your salary ranges for temporary fluctuations or anomalies.  Look for trends that are long-lasting.

In addition to an external compensation analysis to market, an analysis should be performed to identify internal pay inequities that could potentially become the focus of an OFCCP audit.  Pay inequities should include women statistically paid less than men and/or minorities statistically paid less than non-minorities. Records should consistently be kept regarding all pay decisions to determine whether there are legitimate business reasons to support the pay patterns that exist in those areas.  The results of this analysis will not necessarily be used to adjust individual employee compensation.  Rather, the analysis results should be used to target areas where suspicious statistical pay patterns exist.

Since the purpose of the analysis is to anticipate areas potentially of concern to OFCCP, start the analysis with the salary grades or levels as these are most often used as the units of analysis by the OFCCP.   You will need to determine which unit or units of analysis most appropriately reflect how compensation is administered.  The objective is to find potential problem areas by targeting employees who would reasonably be expected to be paid on the same basis due to factors such as job grade, market location, and business unit.

Though the OFCCP will typically use median to perform analysis and determine pay inequities within pay grades or other units.  A thorough compensation analysis should include:

  1. Median and mean analyses (to identify areas of OFCCP concern):  In each pay grade compare the median and mean of women and men and of minorities and non-minorities.
  2. t-Test analysis:  This test will determine whether the observed differences in pay within the grade levels are statistically significant.  Results of the t-statistic (t-Stat) in the t-Test are considered to be statistically significant if they are 2.00 or greater representing differences of two or more standard deviations.
  3. Regression analysis:  Any unit where the differences in pay are statistically significant a regression analysis should be performed.  Factors that influence grade levels such as time in service, time in a level, time in the job, department, education, and performance can be incorporated into the regression.
  4. Cohort analysis:  Perform this analysis where it has been determined that the differentials are statistically significant, and where the regression analysis has not accounted for the differentials.  A primary cohort analysis would normally be completed on job titles within grades, across department designations and within departmental designations. Each of the various job titles within the database would be sorted by grade, job title, and then base salary from highest to lowest.
  5. Outlier report:  The average salary of protected class of employees is compared to the average salary of the non-protected group within a salary grade and/or job title.  When a protected employees’ average salary falls below a set percentage of the non-protected, this should be flagged for further review.  This analysis identifies protected employees who are at the lower extremes of the salary range.

At WageWatch 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.  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 .

DOCKING EXEMPT EMPLOYEE PAY

The application and rules for the federal FLSA salary basis test are often misunderstood and not administered accurately or consistently.

First, let’s understand what the term “salary basis” means.  An exempt employee that regularly receives a predetermined amount of base salary each workweek is paid on a “salary basis”.  This applies to employees who are determined to be exempt under the federal FLSA exemption tests including both the minimum salary test and qualifying under one of the duties tests (i.e., administrative, executive, professional, outside sales, etc.).  The minimum weekly salary that must be paid to ‘exempt’ employees under the federal rules is $455.  Please refer to your federal and state wage and hour for exceptions to the salary requirements.  The salary basis pay requirement for exempt status does not apply to some jobs (for example, doctors, lawyers, and schoolteachers are exempt even if the employees are paid hourly).

Now let’s talk about the Salary Basis Test.  An employee’s ‘exempt’ status can be jeopardized if the salary basis test rules are not followed.  The Salary Basis test provides rules regarding what pay deductions can and cannot be made to exempt employees’ weekly base salary.  Generally, the predetermined weekly salary cannot be reduced because of variations in the quality or quantity of the employee’s work.  Except for a few permissible deductions, an exempt employee must receive the full base salary for any work week in which the employee performs any work, regardless of the number of days or hours worked.  This includes any work done remotely such as checking email and voicemail.  An employer cannot make deductions from an employee’s predetermined base salary, because of a business slowdown or lack of available work.

The FLSA salary basis test applies only to reductions in monetary amounts.  Requiring an employee to charge absences from work to leave accruals is not a reduction in “pay,” because the monetary amount of the employee’s paycheck remains the same.

Full Day deductions from pay are permissible when an exempt employee:

  • Is absent from work for one or more full days for personal reasons other than sickness or disability
  • For absences of one or more full days due to sickness or disability, if the deduction is made in accordance with a bona fide sick leave or PTO plan, policy or practice of providing compensation for salary lost due to illness
  • To offset amounts employees receive as jury or witness fees, or for military pay
  • For partial week worked during the initial or terminal week of employment
  • For weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act,
  • Deductions in pay are also permitted for intermittent FMLA leave when the weekly base salary is reduced to coincide exactly with the reduced work week
  • When an exempt performs no work for a full workweek.

For the following two permissible deductions, you should have communicated formal policy(s) detailing disciplinary procedures:

  • For penalties imposed in good faith for infractions of safety rules of major significance
  • For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions

It is important that as an employer, you have a clearly communicated policy permitting or prohibiting improper deductions from exempt employees’ base salary including a complaint mechanism and reimbursement to employees when improper deductions are made.  You should also have a clearly communicated policy for your exempt employees stating that under no circumstances should work be performed during unpaid time off.   The exempt status of your employees will be safe as long as you have clearly communicated policies in place, make good faith efforts to comply with the salary basis test and can show that willful violations have not been made.  For full details regarding federal FLSA, visit http://www.wagehour.dol.gov and links to your state labor department can be found at http://www.dol.gov/whd/contacts/state_of.htm.

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.

EFFECTIVE NEW HIRE ORIENTATION

An employee’s experience during their first few days will affect the rest of their tenure. It is critical, to begin with, an effective, positive, and fun new hire orientation for the future success of your new employees.  Even before the employee’s hire date, you can make a positive impact with a call to the employee two or three days before their start date, welcoming them, letting them know what time to arrive, and what they can expect during their first day and first week on the job.  Studies show that a well-planned orientation can contribute to the length of employment, better work attitudes, more effective communication, and fewer mistakes.  Your new hire orientation is your chance to set a positive tone for a long-lasting and mutually beneficial relationship.

A new hire’s early experience is highly influenced by his peers, managers, subordinates, HR team members, and the organization’s top management.  Ensure that new hires are welcomed by their team members.  Plan a welcome breakfast meet-and-greet for their first morning on the job.  The new hire’s immediate supervisor should schedule daily meetings with the new employee at least for the first week, then at least weekly for the first month or two.  Schedule informational meetings with key people in the department and in other departments to provide the new hire with the general knowledge that they will need to perform their job.  Include an office tour in the orientation process that includes introductions.  Be sure to include introductions to top Executives, Human Resource personnel as well as receptionists, administrative assistants, and copy/mail room attendants.

An effective orientation program will put emphasis on the new employee, their individuality and what they have to offer rather than focusing solely on the company’s culture and how the new employee can fit in.  You are probably hiring in part to get new ideas into the organization.  Make sure to capitalize on that.  Make your orientation meetings fun and be sure to provide a meal or at least snacks.  Keep it interesting and not too long.  Too much information will be boring and will not be retained.  Orientation should reflect culture through interactive activities.  One way to make it memorable is to present the company’s goals, mission, and values in an interactive activity rather than simply providing the information.  Allow the new hires to get to know each other on a personal basis, not just professional – go around the room and have them tell one professional and one personal thing about themselves.  You can also turn this into a game by writing one thing about each person on a piece of paper.  At the end, state items one at a time out of order and have people guess who said what.

Promote communication with a team building activity such as learning the employee handbook through a scavenger hunt.  For example, divide the orientation group into teams and see which team can answer the most handbook questions in a set amount of time.  Cover company ethics to let them know what is expected, and also include ‘unwritten rules’.  Don’t end there.  After orientation, schedule follow-up meetings with each new hire to gain their feedback and answer any follow-up questions they may have.

Don’t forget the basics.  Provide them with all the office supplies they will need to start their job, include contact information they will need.  And let them know how to get additional office supplies.  Teach them how to use the phone, how to forward calls, set up and change voice mail, and how to do a conference call.

Today, many companies are adding programs such as flex-time, telecommuting as well as accommodating and encouraging alternative work styles in an effort to provide a work environment where employees are happier and thriving.  Therefore don’t neglect or underestimate how impactful beginnings are, and provide your new hires with an orientation program that is effective and unique to your company and its culture.

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 compensation and benefits package.  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 consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

IT’S TIME TO ADJUST YOUR SALARY STRUCTURE

Maintaining a salary structure that aligns with the organization’s pay philosophy and is competitive to the labor market is imperative for any organization.  Most organizations update their salary structure every one to two years, as budget permits.  However, during the recent recession, some organizations chose not to increase their salary structures for cost containment and/or a lack of competitive pressure to do so.  For 2017, the stronger U.S. economy and increased employer confidence should continue to bolster job gains, and economists expect the previously sluggish wage growth to accelerate.  Whether or not you’ve adjusted your salary structure during the past few years, it is certainly time to do so now.

The review of your salary structure should determine whether it is still aligned with the company’s needs, pay philosophy and the labor market.  Salary structure adjustments maintain the structure’s competitiveness with the external labor market and protect an organization’s ability to compete in the market place for talented employees.  If the salary structure gets out of sync with the overall labor market, a company may find itself paying employees too much and needlessly increasing operating costs, or paying employees too little and having difficulty attracting and retaining talent.  Salary-structure issues are less expensive to address early on so it is best to review your salary structure annually for any needed changes.  If you wait two or three years to review and adjust, the labor market can move significantly upward in that period of time and the cost of salary range adjustments and resulting salary increases can be substantial.

Other business changes and events may warrant a review of the salary structure, such as the company’s merger or acquisition, or a competitor opening or closing a facility that impacts the company’s operations.  At times during the year hiring managers may alert you to possible salary-structure issues and their insight can indicate that specific areas of the salary structure are out of alignment.  But there may be other factors that the manager is not aware of, such as an organization’s strategic decision to set pay levels above or below the market median.

There are two basic methods for updating your salary structure and many companies will alternate the two methods, performing the ‘quick’ adjustment one year and the ‘in-depth’ adjustment the following year.

  1. The Quick Adjustment method is where you collect and consider trend or annual merit increase information, then adjust your ranges by a percentage you view as necessary to remain competitive. Trend and annual merit increase surveys are published every year and most companies rely more on average or median salary increase figures.
  2. The In-Depth Adjustment method is where you select a representative sample of benchmark jobs using currently published compensation surveys for your competitive market. Collect the competitive salary data, and then compare your salary range mid-points to the market medians or the percentile that you chose to compete with for the benchmark jobs. The results will help you determine the degree to which your ranges should be adjusted and also identify any jobs or job families whose pay is moving at a different pace than the rest of the market and may need re-graded. This methodology requires more data and time to complete.

Alternating annually between these two methods should maintain competitiveness, cost efficiency, and save time from performing the In-Depth Adjustment analysis every year.  Any resulting increases from the structure movement should be minimal and workable within the current budget year.

It is also important to remember that established pay grades, the jobs’ placement within the pay grades and well-maintained job descriptions are the nuts and bolts of the salary structure.  Companies change over time and job functions and duties can also change.  Keeping job descriptions accurate and reflecting the core duties of each position will be essential to appropriate and competitive salary ranges and pay.

Companies should consider the reassessment of their salary administration programs, along with all of their compensation plans, as a vital and ongoing part of the program’s success.  Assessing the program to ensure that it continues to meet your company’s needs is perceived as a credible and functional part of the Human Resources process, and will enhance your company’s ability to remain a competitive force in the marketplace.  When was the last time your organization reviewed its salary structure(s)?

At WageWatch, we offer accurate, up-to-date benefit survey data, market compensation data, salary reports and consulting services 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. WageWatch, Inc. is the leading compensation survey provider for the lodging and gaming industries with 6,000 properties participating in its PeerMark™ Wage Survey.  WageWatch also conducts compensation surveys for other business and industry segments including healthcare and non-profits.  For more information on our services, including market compensation data, benefits survey data, salary reports, and consulting services, please call WageWatch at 888-330-9243 or contact us online.

 

ANSWERS TO ADA ISSUES QUIZ!

Day in and day out, we at Pautsch Spognardi & Baiochhi Legal Group get more questions about disability discrimination and accommodation than any other law.  Listed below are the questions AND answers!

  1. The Americans with Disabilities Act and state laws providing protections against disability discrimination cover employers with 15 or more employees, and not those with less.

    False: Many states have laws protecting individuals with disabilities working or applying for jobs at companies that employ as few as one (1) employee. Illinois and Wisconsin are among these states.

  2. So long as you treat an employee who is an individual with a disability the same as all other employees you will comply with the requirements of ADA.

    False: It is true that individuals with a disability are entitled to treatment equal to that which you give non-disabled employees.  But, you are also required by ADA to afford these individuals with disabilities reasonable accommodations that allow them to perform essential functions of their job.

  3. ADA and state discrimination laws against disability discrimination require equal treatment between employees with disabilities and those employees that do not have disabilities.

    True:  It is true that this is required.  But as noted in the answer to question #2, more is required—reasonable accommodation.

  4. Depressive disorder is a covered disability under ADA.

    True and False: It all depends on whether the condition of the employee or applicant is such that it meets the definition of a “qualified individual with a disability” under ADAAA or applicable.  In other words, does the physical or mental condition substantially limit the employee or applicant in a major life activity such as walking, seeing, talking, working, etc., or does the employee or applicant have a record of such impairment, or is the employee perceived as having such a condition?  This is often a difficult analysis that must be made based on the individualized circumstances of that individual’s condition.  So, some cases of cancer will be determined to be a disability, and some will not.

  5. An employee who suffers a compound fracture of their tibia and fully recovers from this injury and receives a full release for work in four months’ time is likely covered by ADA due to this condition.

    False: Under the Americans with Disabilities Amendments Act of 2008, Congress set six months as the minimum time for coverage as a disability protected by the law.  Beware, however, of terminating an employee based on this premise and law.  It is particularly risky to terminate an employee based on the assumption that the disability won’t last more than six months, when it may.

  6. An employee who suffers an Achilles tear in her left foot and is fully released for a return to work after exactly one year is covered under ADA.

    Probably True: Given the length of time involved, see the answer to question 5 above; it is likely that this condition is covered.

  7. An employee whose only physical limitation on her medical release for work is a 15-pound lifting restriction is not covered by ADA.

    Probably False: If this release is permanent, then almost certainly the employee is covered because this has been held by many courts and agency’s to be a substantial limitation on the major life activity of lifting.

  8. An employee whose only physical limitation on his medical release for work is a 50-pound lifting restriction is not covered by ADA.

    True: Many cases have decided that this sort of condition is not a covered disability because it does not “substantially limit” a major life activity.  In other words, the employee is still a pretty good lifter.

  9. Migraine headaches are not a covered disability under ADA.

    True and False: For all of the same reasons noted above with respect to “cancer”, some cases of migraine headaches are covered, while others are not.

  10. The definition that sets forth the requirements for qualifying as an “individual with a disability under ADA” is essentially the same as that defining a “serious health condition” under the FMLA.

    False:  The two definitions are vastly different.  FMLA’s definition focuses on the need for continuing medical treatment and in-patient hospitalization while ADA’s definition is, as noted above, far more focused on the length and the long-term severity of the condition.

As you can see from these answers, ADA, and the state disability, discrimination laws are difficult laws to interpret and apply to the facts and conditions that occur and are present in your workplace.  The definition of who is a qualified individual with a disability is a particularly knotty one.  The Supreme Court has tackled this definition many times and Congress reversed a number of these decisions in passing the Americans with Disabilities Amendments Act of 2008.
Pautsch Spognardi & Baiocchi Legal Group, LLP; http://www.psb-attorneys.com/ Office: 414-223-5743

 

TEST YOUR KNOWLEDGE OF ADA ISSUES

Day in and day out, we at Pautsch Spognardi & Baiocchi Legal Group LLP, get more questions about disability discrimination and accommodation than any other law.  We developed a quiz to alert you to some of the tougher ADA issues. Answers will be provided in next week’s iBrief™.  (Questions developed by Charles Pautsch/Lisa Baiocchi)

QUIZ – Are the Following Questions True(?) or False(?)

  1. The Americans with Disabilities Act and state laws providing protections against disability discrimination cover employers with 15 or more employees, and not those with less.
  2. So long as you treat an employee who is an individual with a disability the same as all other employees you will comply with the requirements of ADA.
  3. ADA and state discrimination laws against disability discrimination require equal treatment between employees with disabilities and those employees that do not have disabilities.
  4. Depressive disorder is a covered disability under ADA.
  5. An employee who suffers a compound fracture of their tibia and fully recovers from this injury and receives a full release for work in four months’ time is likely covered by ADA due to this condition.
  6. An employee who suffers an Achilles tear in her left foot and is fully released for a return to work after exactly one year is covered under ADA.
  7. An employee whose only physical limitation on her medical release for work is a 15-pound lifting restriction is not covered by ADA.
  8. An employee whose only physical limitation on his medical release for work is a 50-pound lifting restriction is not covered by ADA.
  9. Migraine headaches are not a covered disability under ADA.
  10. The definition that sets forth the requirements for qualifying as an “individual with a disability under ADA” is essentially the same as that defining a “serious health condition” under the FMLA.

COMPENSABLE TIME

Employers need to ensure they count all worked hours as paid hours for their non-exempt staff. For example, when an employee eats lunch at their workstation or desk and their lunch is interrupted by work such as answering phones or email, the employee is working and must be paid for that time because the employee has not been completely relieved from duty.

If the employer has a policy that is expressly and clearly communicated to the employee regarding a specific length of time for a break, any unauthorized extensions of that break time do not need to be counted as hours worked. Bona fide meal periods (typically 30 minutes or more) generally need not be compensated as work time. However, the employee must be completely relieved from duty for the purpose of eating regular meals.

The federal Fair Labor Standards Act (FLSA), doesn’t require employers to provide meal or rest breaks, though some states do require such breaks and the rules can also be different for younger workers. You can find a list of state meal and rest break laws at the Department of Labor’s website at http://www.dol.gov/whd/state/meal.htm and http://www.dol.gov/whd/state/rest.htm.

Employers that fall under the federal guidelines do not have to pay for meal or rest breaks unless:
• The employee works through or during their break
• The break lasts 20 minutes or less
• The break is interrupted by work

Some other compensable time under the federal rules can include waiting time, on-call time, attendance at meetings and training programs, travel time and performing work outside of work hours such as checking emails.

Waiting time may or may not be hours worked depending on the circumstances. If an employee needs to wait before a duty can start such as a firefighter waiting for an alarm, then the employee is ‘engaged to wait’ and this time is worked time and must be paid.

On-Call Time is paid time if the employee is required to remain on the employer’s premises. In most cases, the on-call time does not have to be paid when an employee is not required to remain on the employer’s premises. However additional requirements put on the on-call time that further limits the employee’s freedom could require the time to be compensated.

Attendance at meetings or training programs is paid time when any of the following conditions are true:
• It is during normal work hours
• It is mandatory (if the employee feels that they should or need to attend, then it is mandatory)
• It is job-related

Travel time may be paid time or not depending upon the kind of travel involved. Regular commute time to and from the work site is not paid time. When the employee works at a different work site location then any commute time that is greater than the employee’s regular commute time to their usual work site needs to be counted as paid time. Travel that is part of the regular work duties, such as travel from job site to job site during the workday, is work time and must be counted as hours worked. Overnight travel is work time and must be paid time.

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 and that your pay practices are fair, equitable and non-discriminatory. We can provide your business with compensation surveys and salary reports to help you establish a budget for your merit pay program, including bonuses and incentives. Our innovative company is a leader in the collection of data for surveys and salary reports, which allows us to provide services to a wide range of industries in both the private and public sector. To learn more about our compensation surveys, salary reports, and other services, please call 480-237-6130 or contact us online.