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Posts Tagged “salary survey”

DRAMATIC CHANGES FOR PERFORMANCE MANAGEMENT

Organizations are exploring some new and innovative performance management systems in an effort to truly inspire and motivate their teams with some encouraging results.  Traditional performance management systems typically set goals related to the business plan, utilize performance appraisals that are too lengthy, redundant, hastily completed to meet deadlines, and often don’t allow employees any real input.  Many HR leaders believe that performance reviews yield inaccurate results due to biased approaches and misleading inputs.  Performance Appraisals are essentially a forced ranking system that can actually be very demotivating.

The traditional systems are beginning to shift to a more effective coaching system that focuses on employee achievement of measurable goals and objectives rather than formalized annual appraisal systems that primarily communicate one-way.  There are many examples of progressive companies that have replaced their traditional performance management systems with a culture of coaching, feedback, development, and high performance. Critical to success is that everyone in a leadership role is trained on how to coach and provide constant performance feedback, which in turn, engages employees and creates a desire to continuously improve.

The goal of managing performance is being replaced with a goal of obtaining the best possible sustainable performance under the current circumstances.   Key elements of this new paradigm include:

  • Simplify the Process:  Train managers on how to coach, give feedback and regularly check in with employees.  Focus on developing employees rather than evaluating and giving them a ‘rating’.  Ask questions that help target what the employee needs, such as, “What skills would you most like to improve on?” or “What can I do to help you?”  Review employee progress more frequently making the process less intimidating and more sensitive.
  • Streamline, shorten or completely replace Performance Review forms: Replace the forms with on-going coaching and feedback.  Feedback must be timely to be meaningful.
  • More agile, relevant, frequent and transparent goal management:  Include employees in the discussion of key performance objectives, ensuring they understand the reasons for the goals and can see how they are linked to organizational goals.  Utilize more short-term goals that are easier for employees to derive meaning from what they do every day.  Create achievable goals and regularly monitor employee progress.
  • Address career goals and future training needs:  Include a system that supports follow-up and delivery of the training and career opportunities.  Create a culture where managers can delegate without feeling threatened, knowing they also have opportunity and training for the next career advancement.
  • Eliminate direct correlation between performance rating and compensation:  Make pay adjustments based on a combination of elements such as performance, customer and business impact, skill scarcity and the competitive nature of employees’ positions.

Employees want to perform at their best.  They want to understand the goals and to be motivated.  They want to contribute, be supported, to learn and to have fun.  Management and leaders need to create the conditions needed for a great performance to take place and for business to flourish.  The ideal process for managing performance is one that successfully motivates and supports staff to contribute to the achievement of the goals and objectives of the organization.  A culture that encourages on-going communication and coaching between managers and their employees has many benefits and advantages over traditional Performance Management.

Change can be challenging and demanding.  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 surveys 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.

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.

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.

TO CHECK OR NOT TO CHECK: A BACKGROUND CHECKS PRIMER

Conducting thorough pre-employment background checks are a critical tool in mitigating new hire risks. There are many types of background checks available to HR professionals that can be conducted in-house or externally by vendors who specialize in employment screenings.  HR professional should take a strategic view of onboarding as a process.  By doing so, several layers of checks and screenings are implemented to best reduce new hire risks.  It is the old adage that the result is more than the sum of its parts.

The new hire selection process starts with the job advertisement or announcement.  The announcement needs to be designed to attract specific skills and behaviors while discouraging those without.  Posting in the advertisement that the position requires a drug test or criminal background check is a potent deterrent.  Those still interested should be directed to a job application that captures information that will form the groundwork for the pre-employment screenings in the next recruitment phase.

The EEOC enforces Title VII of the Civil Rights Act; Age Discrimination Act; Title I of the Americans with Disabilities Act; Equal Pay Act; and Title II of the Genetic Information Act.  Employers are welcome to use all manner of pre-employment screenings – as long as they comply with EEOC standards.  None of these Acts directly prohibit employment discrimination based on credit information, conviction records, previous employment, education, or psychological/behavioral profiles.  However, the EEOC has a published a Compliance Manual and provides guidance on a number of pre-employment scenarios, because of the disparate impact facially neutral policies can have on these numerous protected classes.

This is the tightrope that causes many HR professionals to gloss over background checks out of fear of inadvertently triggering an EEOC investigation.  What you don’t know, can hurt you.  HR has a duty to the company to traverse this tightrope and understand the often gray and contradictory playing field (between state and federal guidelines) in which they conduct pre-employment screenings.

Criminal Background Checks – Treat each criminal record individually in the context of the job sought, work environment and conditions, and risk to the organization. Ask the candidate about the situation. Deliberate omission and lies can be used a basis to disqualify the candidate.

Credit Check – Most commonly used for positions that have are executive level, have financial responsibility, or have access to confidential information such as social security numbers to reduce the risk of theft or embezzlement.  Allow candidates the opportunity to explain negative results as some reasons, such as medical bills, are protected.

Physical/Medical Exam – This screening is allowed only after a conditional offer of employment is extended and is used in specific jobs that require a proof of fitness in order to safely perform duties.  All candidates in the job category are required to have the same medical examination.  The candidate medical history is confidential and must be kept separate from employment records.  HR professionals need to keep in mind that the medical examiner does not make the final hiring decision.

Motor Vehicle Record – This is a critical check for positions that are required to operate a company vehicle as part of the job requirement.  In some states, DUI convictions are kept with the DMV not the criminal court system.  There are vendors that make multi-state verification easier by consolidating searches.

Work & Education History – Past performance is a strong indicator of future performance.  The goal of the work history and education background check is to establish that the glowing resume represented to the recruiter is factual and accurate.  On education, check with the governing body on the authenticity of the degree.  We recommend asking for full transcripts for recent graduates with a short work history.

As a company, it is important for you to understand the new regulations set forth by the EEOC and implement them in your hiring and workplace practices.  Additionally, for the good of your employees, it is helpful to analyze benefits survey data, compensation surveys, and salary reports.  Having this information at hand allows you to plan a budget, including competitive employee salaries and benefits, which will help you to hire and retain a happy, talented team.

At WageWatch, our expert evaluators provide businesses in a large range of industries with accurate and beneficial benefits survey data, compensation surveys, and salary reports to ensure that payment and benefits plans are on par with those in the industry. For more information on market compensation data, please call WageWatch at 888-330-9243 or contact us online.

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.

ARE YOU ATTRACTING TOP TALENT?

Many business owners find 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 complete important jobs within a company is a challenge that not only exists in today’s marketplace but one that business owners have had to navigate for many years. 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. In addition to a number of other factors, businesses that retain the best employees offer great compensation and benefits packages.

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 their all. It is also important that the work the employee accomplishes 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 and compensation data within your industry to determine what benefits and bonuses should be awarded to your top performers.

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 compensation and salary data for hospitality, gaming and tribal gaming, healthcare, colleges and universities as well as a wide variety of other industries. To learn more about our up-to-date market compensation data call 888-330-9243 or contact us online.

 

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, and 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 for 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 moral 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.

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 the workers, affect their compensation and benefits, and direct and supervise their performance.  When businesses use 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 has 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 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.

NEW FLSA OVERTIME REGULATIONS ARE IN TURMOIL

In September, 21 states sued the Department of Labor to block implementation of the FLSA overtime regulations slated to go into effect on December 1st of this year.  Separately, over 50 business groups challenged the DOL’s authority to establish a salary test for determining if an employee is or is not exempt from overtime. Those two cases were eventually consolidated.  On November 22nd, federal judge Amos Mazzant, a judge for the eastern district of Texas, appointed by President Barack Obama, entered a nationwide preliminary injunction to stop the implementation of the new overtime regulations. The new regulations would have increased the minimum salary for exempt “white collar” executive, administrative and professional employees from $455 per week to $913 per week, or $47,476 per year.

The Federal Court ruled that Congress intended the EAP exemption to apply to employees doing actual executive, administrative, and professional duties rather than an employee’s salary.  The Court concluded, that the new regulations, which raise the salary threshold significantly would have created “essentially a de facto salary-only test.”  The Court explained, “[t]he [DOL’s] role is to carry out Congress’s intent.  If Congress intended the salary requirement to supplant the duties test, then Congress, and not the Department, should make that change.”

This past Thursday, December 1st, the DOL filed an appeal asking the Fifth Circuit Court of Appeals to overturn the preliminary injunction against its new overtime regulations. Since an appeal in the Fifth Circuit can take a year or more, many labor experts and attorneys expect there will be further legislative or administrative action once the Inauguration occurs and a new Secretary of Labor is in place and this likely will happen well before a final court ruling takes place.

However, many employers have already implemented changes, by either raising exempt employees’ salaries to meet the new threshold or reclassifying employees who are still earning less to nonexempt status.  Employers who have already implemented such changes, may want to leave decisions in place as It would be difficult to take back salary increases.  Employers may want to postpone reclassifications that have not yet been done to give the litigation a chance to play out.  And Employers may want to communicate that there may be future changes depending on Federal Court, Congressional, or Trump administration activities.  Employers shouldn’t assume that the overtime rule will be permanently barred and should have a plan to move forward if necessary in the future.

This said, here are a few possible future scenarios that could unfold:

  • A lame-duck Congress comes up with a compromise bill for President Obama’s signature (not likely);
  • President Elect Trump addresses this after his confirmation by abandoning the Obama administration’s defense of the final rule; and
  • The new administration may introduce legislation seeking a compromise, with a lower, or graduated salary threshold increase, and without the automatic escalator clause.

Regardless of what action the current administration or the new administration take, it is very likely we will see more activity at the state and local government levels. Unions are leading the effort for a $15 minimum wage at the state and local levels. They have had some success in California, Oregon, Washington and New York. As part of that effort, adding a doubling of salary for exempt employees is a logical extension of the unions’ efforts. Why? Because the minimum wage effort impacts exempt employees under FLSA. Exempt employees who are not paid for overtime may see their line employees earning more than they do.

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.

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 also 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 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 resolve 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.