The Modern Office & Managing the Risk

modern officeToday’s employers are placing a premium on employee wellness and engagement. And rightfully so, hard working employees deserve some love. But in addition to doing right by their people, businesses that provide comprehensive wellness plans and lifestyle perks for their employees are realizing huge benefits from it. But with more unconventional and physical activities going on in the office, there comes a whole new set of risks for employers.

Let’s talk about what employers are doing for their people, how it’s working, and how to manage the risks involved in the modern office.

A New Age of Employee Engagement

Now more than ever organizations in business are truly investing in their people. Employee perks and benefits are evolving to an all new level thanks to forward-thinking companies like Google with state of the art fitness facilities, fully stocked game rooms, free bicycles and more cool perks for employees. Who ever thought we’d see a rock climbing wall at the office?  Googles’ perks go so deep that past and current Google employees have gone online to list their favorite perks working for Google.

Here are Some Common Contemporary Employee Benefits, Perks and Activities

  • Fitness gyms
  • Yoga, Karate, Pilates studios
  • Basketball courts
  • Table games: Ping Pong, Foosball, Billiards, etc.
  • Video games
  • Reading rooms
  • Massage chairs
  • On Site Pet Care
  • And yes, even rock climbing

A New Age of Risk

Not to be a wet blanket, but you can get hurt playing Ping Pong, and the bottom line is: If you’re putting perks and activities in place that present the potential for an accident or injury, you have a responsibility to manage the risk and provide the safest environment possible for your employees. So, before you put up the basketball hoop, put some basic risk management measures in place.

Here are some simple things that you can do to manage the risks involved with lifestyle perks:

Liability Waivers: If you’re offering activities with any level of physicality or potential for injury, it’s a common best practice to get signed waivers from participants…even if it’s only Ping Pong.

Medical Clearance: Depending on the physical level of the activities you make available, you may consider requiring clearance from a doctor before employees may participate in any activities.

Restrict Access: To reduce employer risks, allow only employees of the company (and not friends and family) to take advantage of the amenities (Gym, Sports Court, etc).

Safety Programs: Institute a safety education program covering the equipment and activities, and post safety guidelines in game rooms, gyms, and on ball courts or playing fields.

Get Covered: If you’re thinking of providing any new perks or benefits for your employees, make sure that you have adequate liability and workers’ comp  insurance coverage in place (yes, even if it’s ping pong).

The modern office landscape is changing, and with this new era of employee engagement and all of the perks that go with it, a new set of risks arise. So, if you’re considering taking your benefits package to the next level, talk to us at Sinclair. We specialize in measuring your risk and covering your exposure. We’re also Liability and Workers’ Comp experts, so this is right up our alley.

Shannon Hudspeth
Human Resource Director
shudspeth@srfm.com

Why your business needs a wellness program

Health Insurance and Large Groups — Understand How Your Premiums Are Calculated

?????????????????????????????????As an employer, one of the most valuable benefits you can offer to your employees is health insurance. For larger groups of 51 employees or more, you’ll likely have group health insurance coverage. This is a policy you’ll typically purchase from a broker (so you get the best deal) that you can then offer to all of your eligible employees. Around 98% of large employers (businesses with more than 200 employees) provide health coverage to some or all of their people.

These types of health insurance policies are great for your employees

Large group policies have several advantages over small group or individual health insurance plans:

  • The employer typically pays half or more of an employee’s premiums.
  • Premium only plans (POP) mean employees can pay premiums out of their pre-tax incomes.
  • This results in significantly subsidized premiums, meaning happier employees.
  • You get a healthier, better motivated workforce.

The health insurance cost is calculated slightly differently for large groups

The cost of large group policies is typically worked out when the employer decides to purchase, rather than being a fixed rate. The premiums, coverage, deductibles, and benefits are normally based on several factors:

  • The number of employees participating.
  • The type of coverage needed.
  • The amount of payments, deductibles, and benefits desired.
  • An employer’s prior claims history.

Individual employees don’t normally have to fill out health questionnaires, although employers may need to answer general questions on the health of their employees.

Other factors that can impact your health insurance premiums for large groups

Some insurers will also take the following into account:

  • The average age of the workforce.
  • Large claims that have been made by the employer previously.
  • The employer’s location — New York City is going to be more expensive than rural Wisconsin.
  • The gender makeup of the workforce.
  • The sector an employer works in — Premiums for constructions workers are going to be higher than for a retail shoe store.

All of these factors will feed into the calculations, coverage, benefits, and premiums.

Differences in health insurance premiums between small and large groups

If we look at a typical health insurance plan for a family, an employee will generally contribute:

  • In small groups — Around 35% of the premium.
  • In large groups — Around 25% of the premium.

There’s less of a burden on employees in large group health insurance plans.

If you’re a large employer, you must offer health insurance

The Affordable Care Act requires that employers of more than 50 people must offer affordable health plans to their ‘Full Time Equivalent” employees. The penalties for not providing this type of cover are:

  • Mandate Penalty — This comes into effect if an employer does not offer group health coverage. It’s calculated at $2,000 per employee, after the first 30 employees.
  • Qualification Penalty — This applies if an employer does not offer a “qualifying plan.” Qualifying plans must offer a certain minimum standard of coverage, and must be affordable to employees. The penalty is $3,000 per employee that does not get qualifying coverage and purchases a policy through the health insurance Marketplace.

The best way to make sure you get an affordable policy, and your employees get the coverage they need, is to use a specialist health insurance broker. They can help you navigate the complicated areas of health insurance and make sure you get the support you need to make the right choice.

Jill Goulet
Risk Management Consultant
jgoulet@srfm.com

Sinclair 7-22-15-14

Keeping Up With the Evolving Workplace

???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????With the age of Millennials gaining a stronghold in the workforce comes the dawn of the modern workplace. Times are changing surrounding how we hire and train, what we do to retain employees, and the dynamics within the office environment itself. Employees are seeing companies through different lenses these days, and employers have to rethink their employee strategies in order to attract and retain the best new talent.

Change is good, and if you want to keep up it’s time to let go of the past, embrace the present, and see into the future. The business landscape is evolving, and we’re going to discuss some things you can do to make sure you’re positioned to grow with it.

The Office in 2016

Increased technology, a path for growth, and a fresh view from management of workplace dynamics are what employees are expecting in today’s modern office. Millennials are vetting employers more deeply than ever and making choices on where they want to work based on culture, values, perks, and growth opportunities. Millennials want more than just a paycheck, and to attract the best up and coming talent, employers have to offer more. Let’s talk about what that means.

Keeping Up With The Times

One of the top criteria that Millennials use for deciding whether or not to sign on with a company is the quality of the management. Quality of management comes in many forms and is relevant on multiple levels. Here’s what I mean:

Technology: Does it seem like technology developments are moving faster and faster with each passing year? It seems that way, because it is that way. A company that doesn’t embrace and leverage new technology sends a message to employees (and potential employees) that you’re ok remaining stagnant and not so interested in embracing growth and change. This is a red flag for discerning Millennials who are ever-so-searching for upward growth.

Flexibility: As the workplace changes, so do our workdays. The traditional 9 to 5 is a thing of the past in many business settings, and employers are embracing more unconventional methods like implementing 4 day work weeks and allowing more telecommuting. This tells prospective employees that management takes a smart approach to cutting costs and streamlining operations which also allows for a more balanced work-life dynamic for the employee. It’s a winner with Millennial for sure.

Wellness: Employees expect more from the workplace in terms of personal development. They ask the question: If I spend 8 to 10 to 12 hours a day at my job, what am I getting out of it besides a sense of achievement and a paycheck? Wellness programs are an essential part of any companies’ employee strategy. An investment in the health and wellbeing of employees not only improves the quality of life for workers, it’s proven to increase productivity and it lowers insurance rates for the business.

What can a company do to keep up with the times?

Don’t be Fred Flintstone: Nothing is more frustrating for employees than outdated technology that slows down their day. Provide the right tools for your people and it goes a long way in improving their happiness and increasing their productivity. Assess and upgrade equipment as needed like; Phones, Computers, and Printers and if they say “Made in Bedrock” on the bottom, get an upgrade.

Limber Up: Consider some alternatives to the 8 hour workday if they make sense for your business model. Will a four day week work fly? Can some of your people telecommute part of the time? If the answer is yes, test out some of these options, they could save you money and increase productivity.

Take Care of Your People: If you don’t have a dedicated Wellness Program, get one started. A comprehensive wellness program is an attractive benefit for prospective employees and it will pay you back in spades, by way of:

  • Lowered health care costs.
  • Reduced absenteeism.
  • Higher employee productivity.
  • Reduced workers’ compensation and disability-related costs.
  • Reduced occurrences of injuries.
  • Improved employee morale and loyalty.

Step up Your Game: If you have a wellness program in place, great, you’re on the right track. Consistent growth and improvement of your wellness offerings tells employees that they mean something to the company and are worth the investment. Think about expanding your program and even throwing in some lifestyle benefits in the office like; Yoga classes, fitness areas, and even allowing pets in the office.

Millennials love to see that a company is invested in their personal and professional growth; I think we all like to see that. So, especially in this age of the evolving workplace it’s important for employers to stay up with the times, embrace the changes, and provide a culture that’s attractive to up and coming talent.

At Sinclair we’re dedicated to Employee Wellness. We look at an organization from every angle and we will customize a wellness program focused on developing a healthier and happier workforce in your business. Get in touch with us today to see what we can do for you.

Matt Bauer
President
mbauer@srfm.com

11 Smart Financial Moves You Have to Make

Are you ready to comply with the new DOL Overtime Payment Rules?

On May 18, 2016, the U.S. Department of Labor (DOL) announced a final rule regarding overtime wage payment qualifications for the “white collar exemptions” under the Fair Labor Standards Act (FLSA).

How does this rule affect your business? The final rule increases the salary an employee must be paid in order to qualify for a white collar exemption. The required salary level is increased to $47,476 per year and will be automatically updated every three years. The final rule does not modify the duties test employees must meet to qualify for a white collar exemption.

Employers will need to comply with this rule by Dec. 1, 2016.

Overtime Rule Change

How can you prepare yourself to comply with the new rule? Follow these steps:

  • Become familiar with the new rule and identify which employees will be affected. Employers should reclassify employees as exempt or non-exempt, as necessary, by Dec. 1, 2016.
  • Consider communicating any work schedule changes to affected employees before the date mentioned above.
  • Evaluate whether implementing new timekeeping practices and training for managers and supervisors on the new requirements is necessary.

The White Collar Exemption

The white collar exemptions are minimum wage and overtime pay exemptions available to certain administrative, professional, outside sales, computer and highly compensated employees.

To qualify for the white collar exemption, an employee must meet a salary basis test, a salary level test and a duties test – the employee must meet all three tests in order to be exempt from FLSA minimum wage or overtime pay requirements.

The three tests are outlined below:

  • The salary basis test is used to make sure the employee is paid a predetermined and fixed salary that is not subject to reduction due to variations in the quality or quantity of work.
  • The salary level test is used to ensure that the employee meets a minimum specified amount to qualify for the exemption. This salary threshold provides employers with an objective and efficient way to determine whether an employee qualifies for a white collar exemption.
  • The duties test requires that the employee’s job duties conform to executive, administrative or professional duties, as defined by law. This analysis requires a more thorough evaluation of whether an employee can be classified in one of these categories: administrative, professional, outside sales, computer and highly compensated employee.

Higher Salary Threshold Requirement

The final rule increases the minimum salary level of $455 per week ($23,660 per year) to $913 per week or $47,476 per year. The new salary level represents the 40th percentile of wages earned by workers in the lowest-wage census region in the United States (currently the South) for a full-year worker.

The final rule also increases the $100,000 salary level for highly compensated individuals to $134,004 per year—the 90th percentile of wages earned by full-time workers across the entire United States.

These higher salary levels will be updated every three years to maintain the salary level at their corresponding 40th or 90th percentiles. The first automatic rate update is expected by Jan. 1, 2020. The DOL will publish updated rates in the Federal Register and on the Wage and Hour Division’s website at least 150 days before their effective date.

Calculating Employee Wages

Administrative, Executive and Professional Employees

The final rule will allow, for the first time, non-discretionary bonuses and incentive payments (including commissions) to be used to satisfy up to 10 percent of an employee’s standard salary level. This may include the payment of non-discretionary incentive bonuses tied to productivity and profitability. Non-discretionary bonuses and incentive payments may be used if they are paid on a quarterly basis, but more frequent payments are acceptable. However, the DOL will allow employers to make some “catch-up payments.”

The DOL will also allow employers to use significantly large bonuses toward 10 percent of the required salary amount.

Highly Compensated Employees

Under the final rule, highly compensated employees qualify for an overtime exception if they meet the new salary level of $134,004 per year. However these individuals must receive at least the full standard salary amount each pay period (i.e., $913 per week, $1,826 bi-weekly or $3,956.33 per month) on a salary or fee basis (not counting non-discretionary bonuses and incentive payments).

The remainder of a highly compensated employee’s wages may be calculated by including the full amount of non-discretionary bonuses and incentive payments (including commissions).

Impact on Employers

Given the significant increase in the salary level requirement, employers will need to increase employee salaries, or re-classify certain employees as either exempt or non-exempt, solely based on their salary level. The DOL estimates that this final rule extends overtime protections to approximately 4.2 million workers who are currently exempt under the white collar rules and clarifies overtime compensation eligibility for another 5.7 million white collar workers and 3.2 million salaried blue collar workers whose entitlement to overtime pay will no longer rely on the application of the duties test.

In addition, because of the short implementation deadline, employers should not delay becoming familiar with the new requirements and implementing any necessary changes into their timekeeping and payroll systems. Employers should also determine whether additional training on modifications is necessary for their managers and supervisors.

Finally, employers should also consider communicating with employees to inform them of how their wages, hours of work and timekeeping practices will be affected.

Enforcement and Compliance

Employers that fail to comply with the final rule may be subject to a variety of overtime wage payment enforcement mechanisms, including the ones listed below.

  • Private employee lawsuits: These lawsuits can be initiated by employees either individually or through collective action to recover back pay, interest, attorneys’ fees and court costs.
  • Administrative injunctions: These injunctions may include a prohibition on the shipment of goods in interstate commerce if the goods were produced in violation of the FLSA (including overtime wage payment provisions).
  • Civil fines for willful and repeated violations (up to $1,100 per violation).
  • Criminal charges for willful violations (up to $10,000 in fines, imprisonment for up to six months or both).

These laws can seem confusing and complex. If you have questions or need more information, please contact Sinclair Risk & Financial Management – we’re here to help!

Shannon Hudspeth
Human Resource Director
Overtime Rule Changes

Changes from the Affordable Care Act in 2017 — What you need to know

Doctor Tablet Computer Affordable Care ActThe Affordable Care Act is making some changes in 2017 and if you’re providing health insurance via a group plan you need to make sure you’re compliant. Here’s a quick guide to the main changes and what you need to do to ensure you meet all the new guidelines and regulations.

Remember, we’re here to help, so if you have any questions about any of this, please do get in touch. The main changes include:

  • Grandfathered plans — Check your plan is still grandfathered.
  • Deductibles amounts — Changing deductibles for EHB and HSA plans.
  • Employee contributions — Changes to FSB contribution limits from employees.
  • Group plan information — Changes to how information on group benefits and coverage is provided to employees.
  • Reinsurance — No reinsurance fees for self-funded plans in 2017.
  • Large employers — Must offer health plans if you have more than 50 full-time employees.

Grandfathered plans — Check grandfathered status for 2017

You likely have a “grandfathered plan” if the plan was already in existence when the ACA came into effect in March 2010 and it hasn’t had significant changes since then. Grandfathered plans can retain their old benefits, premiums, and other features and fees so long as they don’t have prohibited changes made.

  • If your plan has been grandfathered, check that there aren’t any changes being made that will make it lose the grandfathered status in 2017.
  • If it does lose grandfathered status, you’ll need to ensure it meets all of the regulations and guidelines that the ACA requires.

Essential Health Benefits (EHB) and Health Savings Accounts (HSA)  High Deductibles plans — Amounts changing in 2017

Under the ACA, the Out of Pocket maximum fee for EHBs can’t exceed $7,150 for self-only coverage and $14,300 for family coverage in 2017.

  • Check your plan’s out of pocket maximums to make sure it complies with these guidelines.
  • If you have a Health Savings Account (HSA) plan with high deductibles, make sure those deductibles are below the ACAs allowed limits. In 2017 that’s $6,550 for self-only and $13,100 for families.

Health Flexible Spending Account (FSA) contributions changing in 2017

The amount an employee can contribute, pre-tax, to a health spending account was $2,550 in 2016 and may be increased in 2017. Note that this amount does not apply to employer contributions or to contributions to other benefits such as dependent care assistance.

  • Check to see what the new FSA limit is in 2017, it’s normally announced at the end of the year.
  • If you aren’t able to get that information, use the 2016 limit of $2,550.

Summary of benefits and coverage (SBC) information needs to be updated

The ACA has strict guidelines on how information on benefits and coverage is provided to plan members. In 2017, these guidelines are changing, and a new template will be introduced for SBC information.

  • Use the new SBC template for open-enrollment plans or plans starting on or after April 1 2017.

Reinsurance fees in 2017 — Applies if you are a self-funded plan

From 2014 through 2016, self-funded plans needed to pay fees to a transitional reinsurance program. Starting in 2017, reinsurance fees no longer apply, although your 2016 fees will be due in 2017.

  • Submit the 2016 reinsurance form and make the appropriate payments for the 2016 benefit year.

Applicable Large Employers (ALE) will be subject to penalties if they do not provide appropriate insurance coverage to full-time employees

ALEs must offer affordable health coverage to their full-time employees. They will be penalized if any full-time employee receives a subsidy for health coverage through an Exchange.

  • Calculate the number of Full Time Equivalent (FTE) employees — These are individuals working, on average, more than 30 hours a week or 130 hours a month. If you have more than 50, you are likely an ALE.
  • Ensure that you have proper health care coverage in place for your full time employees in 2017.
  • Report the coverage to your employees and the IRS.

If you’ve got any questions about how this affects you, we’re only a phone call away. We’ve got the experience and expertise to talk you through any changes you need to make.

Jill Goulet
Risk Management Consultant
jgoulet@srfm.com

Sinclair 7-22-15-14

Protect Your Healthcare Organization with a Strong Pre-Screening Process

Protect Your Healthcare Organization with a Strong Pre-Screening Process

Hiring is a complicated component of business that always opens a company to liability. Hiring an ineligible candidate doesn’t just risk fines and litigation,  it can also affect the organization’s brand, which can cause long-lasting financial damage.

In the HireRight 2013 Spotlight, 56% of healthcare organizations said background screening improves the hiring process and protects the company from liability. Not only does a qualified, eligible hire deliver good service, they also represent the brand positively. 40% of healthcare organizations believe background checking improves safety. 44% believe background checking improves regulatory compliance.

It’s the job of good managers to ensure that new hires are eligible to provide healthcare to patients. No matter how experienced a hiring manager may be, a “good feeling” is not an indication of anything. You have to do your homework, which means building and enacting a screening process.

When you consider an applicant, the first place you should look is the Office of Inspector General’s List of Excluded Individuals/Entities, which lists people and organizations that are excluded from federally funded healthcare programs.

Entities are excluded because of past Medicare fraud, patient neglect or abuse, or felony or misdemeanor convictions of healthcare-related fraud, theft, or misconduct of any kind. Any healthcare organization who hires an excluded entity won’t be reimbursed for costs and may end up paying significant monetary penalties (up to $500,000 per ineligible employee).

Next, check state and federal data sources to ensure your applicants are properly licensed and aren’t carrying medical sanctions. Unfortunately, there’s no comprehensive source for sanction data in the United States. Hiring managers would be smart to check multiple sources to reduce their risk, such as the National Practitioner Databank and the Connecticut Department of Public Health.

Third, test candidates and new hires for drugs and alcohol use. This isn’t required by law, but the risk of exposure to lawsuits if a patient is injured by an impaired worker is significant. Continue testing employees routinely and randomly to deter unsafe behavior.

Finally, review your screening process at least once a year. As laws and regulations change, you’ll want to ensure your screening program adapts accordingly to identify gaps. Ensuring you have an effective process will improve the reliability of your overall hiring.

The National Business Research Institute says the number one reason organizations cut corners on pre-screening is because they’re desperate to fill positions. Slow down and investigate carefully. Have you considered potential aliases? Have you verified the applicant’s credentials, licenses and education?

Rushing the screening (and the interview process as a whole) is a terrible mistake that can leave your company open to massive liability. Always make the time to thoroughly complete your screening process (or use an agency specifically for this purpose) and check future applicants’ personal and professional references.

Heather Sinclair
Risk Management Consultant
hsinclair@srfm.com

Protect Your Healthcare Organization with a Strong Pre-Screening Process

You’ve Hired Someone with a Questionable Record: What’s Next?

You’ve Hired Someone with a Questionable Record: What’s Next?As a hiring manager, you know how difficult it can be to find the perfect candidate. In unsteady economic times like these, thousands of people can reply to the same job ad. It’s your duty to comb through them to find the best candidate for the position.
However, all those phone calls to verify employment and forms to request database information can take time. There’s work to be done! When you need someone right now, it can be tempting to cut corners. Don’t – it’s not worth it in the end.  Let the process do the work.
What do you do when you discover your new hire has a criminal (or otherwise questionable) record?
It sounds harsh, but hiring someone with a criminal record, industry sanctions, or other black marks on their record can pose a significant risk to your business and expose your company to liability.
1. Confirm your information is accurate. Verify in any way you can that the record actually belongs to your new hire. Data entry inaccuracies on your part and/or the database you used are quite common. In many cases, a small detail (like an old address or a middle initial) will clear up the confusion. If you use a third-party screener, double check they have provided you with the correct information.
2. Understand the conviction or sanction. Carefully investigate the employee’s past infraction that concerns you. Depending on the type, severity, and distance from the questionable mark, you may choose to disregard it. Of course, infractions in certain industries can’t be ignored, like the medical and financial sectors. It may be helpful to speak with a lawyer to make sure you don’t violate the new hire’s rights. If the person has a parole/probation officer or case counselor, speak with them as well.
3. Execute a Pre-Adverse Action. According to the Fair Credit Reporting Act, a job candidate or employee must be given an opportunity to dispute or explain any information uncovered on a background check. The employer must issue a Pre-Adverse Action, which is a document that informs the new hire that they can be terminated based on the information in the background check. You are also required to give the employee a copy of their rights under the Fair Credit Reporting Act, the background report, and a reasonable amount of time to respond.
4. Execute an Adverse Action. If the employee is unable to offer a suitable explanation or adequate proof that the results of the background check are inaccurate, you may issue an Adverse Action and termination. This must be done in writing. 
5. Review your screening process. If someone slipped through the cracks, your screening process needs some work. First, identify where the error occurred. Were the interview questions less than thorough? Were the references checked? Was each step of the background check completed? Were any licensing or accreditation agencies contacted? 
It’s worth mentioning that by hiring a felon, you may be creating a fiercely loyal employee. Job prospects for felons (or anyone with unfavorable marks on their records) can be slim. By giving the hire an opportunity, you may be rewarded with an outstanding employee who won’t leave a safe, steady job. 
Hiring a candidate should be a thorough multi-step process that uncovers problems and red flags as early as possible. That’s why a proper background check should always be a part of your screening process. You must simultaneously ensure the candidate/employee’s rights are protected and business is insulated from potential harm.
Shannon Hudspeth
Human Resource Director

Why your business needs a wellness program

“Ban the Box” Law Prohibits Inquiries of Criminal History

“Ban the Box” Law Prohibits Inquiries of Criminal HistoryOn June 1st, Connecticut Governor Malloy signed House Bill 5237, An Act Concerning Fair Chance Employment. This new law is referred to as the “Ban the Box” bill.

Effective January 1st, 2017, Connecticut employers will be prohibited from asking about criminal history (including prior arrests, convictions and charges) on job applications. Connecticut is now the 19th state to adopt this type of legislation.

The law applies to any employer with one or more employees, including the state (and any political subdivisions of the state). However, it does not apply to job applications of independent contractors.

The Equal Employment Opportunity Commission collected data that shows that 92% of employers perform criminal background checks on job candidates, and that a criminal record reduces the likelihood of a job offer (and even just a callback) by more than 50%.

The EEOC asserts that the criminal history box on an application allows employers to instate blanket policies to disregard any applicant with a criminal history. Further, they claim these practices disproportionally affect minority applicants, which violates the 1964 Civil Rights Act.

The new law is designed to enhance the protections of people with criminal or legally-troubled pasts. Throughout the United States, more than 100 million people (about a third of the population) have criminal records.

There are two exceptions to this new law. An employer may ask about an applicant’s criminal history on a form if they are otherwise required to by state or federal law. They may also ask about criminal history if any kind of security, fidelity or money bond is required for the position.

Similar “Ban the Box” laws in other states typically prevent the employer from inquiring about criminal information until a certain point in the hiring process. However, Connecticut’s law only prohibits a criminal history inquiry on the initial application. Employers may ask questions about an applicant’s history at any point forward, including during the interview. The interviewer may also run a background check on an applicant and ask any questions they like, even regarding expunged and erased convictions.

The law establishes a “Fair Chance Task Force” that will study employment opportunities available to individuals with criminal histories and may recommend further statutory restrictions.

The law is a victory for anyone whose past has been marred with any type of convictions or arrests. It allows them to display their credentials to prospective employers before being forced to reveal their criminal past.

Employers should take a few steps to ensure compliance with the “Ban the Box” law: 1) Remove any language regarding criminal histories from job applications and advertisements. 2) Provide training to employees who conduct hiring to teach them when it is acceptable to make inquiries into criminal histories of applicants. 3) Audit the hiring process to ensure the compliance and timing of inquiries into criminal histories.

Shannon Hudspeth
Human Resource Director
shudspeth@srfm.com

“Ban the Box” Law Prohibits Inquiries of Criminal History

FLSA Overtime Rule Change

FLSA Overtime Rule Change On March 14th, the new Final Regulations on the Fair Labor Standards Act were sent to the Office of Management and Budget for final review.  The proposed U.S. Department of Labor (DOL) changes to the “white-collar exemption” in the Fair Labor Standards Act (FLSA) could make more than 5 million individuals eligible for overtime pay—individuals who currently aren’t eligible. This could have a significant impact on employers who may face increased labor costs and compliance efforts.

To qualify for the white-collar exemption, an employee must satisfy a variety of tests, including a duties test, a salary basis test and a salary level test. Currently, under the salary level test, only white-collar workers making less than $23,660 a year are automatically eligible for overtime pay. Under the proposed rule, the salary threshold would increase to a projected $50,440 per year in 2016 and would be updated automatically each year in order to keep up with rising costs.

On Feb. 9, 2016, 108 bipartisan members of Congress signed a congressional support letter, addressed to DOL Secretary Tom Perez, expressing concerns about the proposed rule. Lawmakers are concerned about the unintended consequences for both employers and employees.

One of these concerns is the unclear explanation of the duties test, which is one of the main components used in determining whether employees are exempt from the FLSA provisions. In the proposed rule, the language is posed in question format instead of in a concrete way that employers can easily understand.

Another concern mentioned in the letter is that increasing the salary threshold by such a significant amount—113 percent—disregards the geographic diversity of the country. It states that since the purchasing power of a dollar is different in various parts of the United States, the DOL is ignoring the differences that exist between rural and urban areas.

If the rule is passed as drafted, its most negative impact could be on individuals entering the workforce and mid-level managers. Many small businesses cannot afford to increase their employees’ salaries and would be forced to take actions that could include reducing employees’ hours or shifting salaried employees to hourly status. This could mean a reduction in benefits and could be perceived by salaried employees as a demotion.

In addition, employers would need to re-examine employees’ exemption statuses, review and revise overtime policies, notify employees of changes and adjust payroll systems. Employers may also incur additional managerial costs because they might need to spend more time tracking when employees clock in and out.

The DOL, on the other hand, projects that the higher salary level requirements could actually simplify the process of employee classification because employers would not be required to perform a duties test for employees making less than $50,440 per year, which, in turn, could result in fewer lawsuits and lower legal costs for employers.

The DOL invited the general public to comment on the new rule from June 3 to Sept. 4, 2015, during which it received more than 200,000 comments. The comment period is now closed and a final rule is expected in the summer of 2016. The time between the date the final rule is announced and the date it goes into effect could be short—giving employers little time to make changes.

The Final Regulations could be released as early as May or June, but likely no later than July 7th, with an effective date likely on or before Labor Day, September 5th.  Employers should consider the impact these regulations will have on their current workforce classifications in advance of the effective date.

Matt Bauer
President
mbauer@srfm.com

FLSA Overtime Rule Change

Job Descriptions: Many businesses overlook this key HR must have – do you?

Marty SheaJob descriptions are an essential component of any organization. Not only is it important that they are thorough and accurate when first crafted, it is also vital that they are kept up-to-date, as employees’ job functions may evolve.

Inaccurate or outdated job descriptions can also negatively affect recruiting and productivity, are a detriment to the employer-employee relationship and pose serious legal risks for the company.

 Impact on Recruiting

When a recruiter is told to hire a new employee, he or she should have a clear idea of the type of person to hire—specifically which qualities, skills and experience to look for to yield a solid group of candidates. This can be gleaned from a detailed job description. Without one, the recruiter cannot hope to find a candidate that will match the manager’s expectations for the position.

On the applicant side, prospective employees need specific job descriptions to decide if the position is a good fit for their qualifications and their desired career. Well-written, accurate job descriptions will ensure that the most relevant, qualified candidates apply for the job.

Employer Expectations

Having a comprehensive job description creates a concrete set of expectations for the employer to communicate to the employee. The employee is aware of his or her responsibilities as outlined in the job description, so there is less confusion about job expectations. It can also serve as an evaluation tool for employers to measure job performance based on pre-defined job duties.

Legal Implications – the fine print.

Perhaps most importantly, accurate and up-to-date job descriptions will limit company liability. Job descriptions have been successfully used by employees against former employers in recent litigation.

  • Fair Labor and Standards Act (FLSA): The FLSA defines exempt and non-exempt status—exempt employees are not subject to minimum wage and overtime pay requirements. This can be a serious liability if an employee began work under exempt status, but is now performing non-exempt work as well without an updated job description. The job description must make clear whether the employee is exempt or not and must be in line with the duties the employee is actually performing—failing to do so can leave companies vulnerable to lawsuits.
    • Exempt: The employee must be paid a salary (not an hourly fee) and perform duties defined as relatively high-level work in which the employee uses judgment and discretion on a regular basis. The employee’s primary duties must fit this classification in order to be considered exempt.
    • Non-exempt: Any employee who is paid by the hour is non-exempt, and thus subject to minimum wage and overtime requirements.
  • Americans with Disabilities Act (ADA): The ADA stipulates that employers define the “essential functions” of a job, which are the basic duties that an employee must perform. An individual is only protected under the ADA if he or she is capable of performing the essential functions of a job, so it is vital that these functions are specified.

Don’t overlook this key HR must have – the Employee Job Description – it should be part of your overall Risk Management program.

Concerned that your company may have a gap and be at risk?  Clients of Sinclair Risk & Financial Management have access to Human Resources Management and other tools to help improve their business’s bottom line.

If you are struggling with creating the correct job descriptions, other HR compliance documents or are concerned that perhaps your current Risk Management program is less than stellar – give me a call, we can take a review and get you on the right track.

Marty Shea. VP of Sales

mshea@srfm.com

P: 203-284-3208

C: 860-202-1773