Cardinal FLSA sin costs employer $18.3M in overtime case

Christian Schappel

To terminate FLSA accusations against it brought on by the DOL, oil and gas giant Halliburton Co. will shell out $18.3M. Its mistake is always No. 1 on every list ever assembled of things employers should not do when employing salaried workers. 

Three examples of such lists can be found here, here and here.

The mistake in question: making all salaried employees exempt from overtime, without considering their income or whether they pass the duties tests.

According to a report by Reuters, the DOL said Halliburton automatically exempted all salaried workers from overtime without considering their pay or duties.

That’s a massive no-no. Still, it’s one that the DOL finds pretty often.

This mistake was caught as part of an ongoing multi-year compliance initiative by the DOL to investigate major players in the oil and gas industry for violations of the FLSA.

According to a release by the DOL, the agency’s investigators found that Halliburton incorrectly categorized employees in 28 job positions as exempt from overtime.


Some of the positions incorrectly classified as exempt:

Click here for entire article. 

Tip Tuesday! Blowing up the annual performance review? Start with the yearly engagement survey

Pretty much everybody agrees: The annual performance review process is deeply flawed. But there’s another common review procedure that needs to be torn down and rebuilt as well, according to guest poster Glint CEO Jim Barnett.  
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The Washington Post said it best: “Big business is falling out of love with the annual performance review.” Some of the world’s most admired organizations, like Accenture, Deloitte, and most recently, GE, are eliminating traditional annual processes for evaluating employee performance in favor of “more frequent conversations.”

This transition is indicative of a major shift in the way we work. Once viewed as a traditional “rite of corporate life,” the annual performance review has now been abandoned by more than 10% of Fortune-500 companies. We believe this is just the beginning of a dramatic change in performance management systems and practices.

The goal of eliminating the annual performance review is to replace an ineffective, often painful process for managers and employees alike with regular check-ins about development. No more high-stakes, once-a-year grades that go on your “permanent record:” Instead, a regular dialogue where feedback and course correction happen much more frequently.

Click here for entire article. 

A strong argument for starting the workday at 10 a.m.

by Jared Bilski

Flexible scheduling options that allow employees to start their workday later may bolster a lot more than just morale.  

According to sleep expert and Oxford University Professor Dr. Paul Kelley, a traditional nine-to-five workday is only benefiting a very small segment of employees because that start time is too early for most people.

You heard that right — nine in the morning is too early to start work. Unless you’re in the 55-and-older demographic, Kelley says you’re fighting your body’s natural biorhythms by starting the workday closer to 10 a.m.

Optimal wake-up times

As reported in The Guardian, Kelley originally started conducting research to find out when school-age children experienced “true body awakening” and whether the starting time at most schools was optimal for those children.


That research uncovered the following body wake-up times for children:

Click here for entire article. 

New rule: Employees of federal contractors must be free to discuss pay

by Christian Schappel

You’d think this would’ve gone without saying, given all of the one-sided legal hullabaloo in this area recently. But this is the federal government we’re talking about, and what should go without saying must be said (or, rather, carved into stone).

In a new rule issued by the DOL, the feds are officially saying: Let employees talk and ask questions about their pay — and the pay of others.

The issuing of the rule was the result of an executive order by President Obama.

The rule prohibits federal contractors from keeping “pay secrecy” policies.

The nuts and bolts of the new rule:

• It applies to any organization that holds any contracts, subcontracts or federally assisted construction contracts that have a combined total of $10,000 or more in any 12-month period. It also applies to any organization that holds government bills of lading, serves as a depository of federal funds, or is an issuing and paying agency for U.S. savings bonds and notes in any amount.
• It says federal contractors and subcontractors may not fire or discriminate against employees for discussing, disclosing or inquiring about their own pay or that of their co-workers.
• It also protects those same types of pay discussions by job applicants.

Click here for entire article. 

The next costly HR headache: Workers’ comp to double

by Christian Schappel

It never ends. You’re already trying to comply with Obamacare. Then, you’ll have to deal with the DOL’s new overtime exemption rule changes. What’s next? 
A wave of workers’ compensation claims, according to one insider.
Our good friends over at SafetyNewsAlert.com recently attended the annual conference for the Association of Occupational Health Professionals in Healthcare and came back with some concerning info for HR pros.

‘It’ll double’

While presenting at the conference, Phil Walker, the founder of the Phil Walker Work Comp Savings Company and a national trial counsel for employers in California workers’ comp cases, said workers’ compensation claims will double over the next 10 years.
According to Fred Hosier, SafetyNewsAlert’s editor-in-chief, Walker said there are three reasons for this:

1. Technology will eliminate low-paying jobs. We’re already seeing this at places like Amazon, which is using robots to eliminate warehouse jobs, and Wendy’s, which is starting to use order kiosks in place of warm-blooded order-takers, Walker said. And what happens when low-paying jobs are eliminated? People who occupied those positions file workers’ comp claims

Click here for entire article. 

Tip Tuesday! ACA reporting rules: A plain-English breakdown

by Christian Schappel

If you think the Obamacare reporting requirements issued by the IRS are confusing, you’re not alone. But we’ve cut through the clutter to get to the point of what’s required. 

Who has to report

First of all, let’s make it clear who has to abide by these reporting rules. Who knows maybe you’re small enough to recuse yourself from all this mess.

The reporting requirements apply to “applicable large employers” (ALE) — those who employ 50 or more full-time or full-time equivalent employees. They also apply to anyone who provides minimum essential health coverage under the law to an individual — this would apply to a very small self-insured employer, for example.

Who’s a full-time equivalent employee? That’s an issue we tackle here.

The IRS then says: “If an employer has fewer than 50 full-time employees, including full-time equivalent employees, on average during the prior year, the employer is not an ALE for the current calendar year. Therefore, the employer is not subject to the employer shared responsibility provisions or the employer information reporting provisions for the current year.”

Reporting requirements

Now it’s time to get down to brass tacks.

Click here for entire article.

Can an employee be overworked to death? Court tackles benefits impact

by Jared Bi

If you’ve got any employees who are logging serious overtime week after week, you’ll want to take note of how the court handled this case.

Judith Dietz v. Workers’ Compensation Appeal was a case that centered around a Pennsylvania municipal water department employee, Robert  Dietz, who had a deadly heart attack on the job. Dietz was a 48-year-old field maintenance worker who routinely logged more than 40 hours per week and was always on call. He was also a heavy smoker.

Dietz’s heart attack took place during a 14-hour shift.

Long hours or smoking habit?

Click here for entire article.

Don’t delegate that! 3 tasks managers should never pass off

by Jared Bilski

Delegating work effectively is consistently listed as a skill managers say they’d like to improve. While passing off tasks to your team is a critical skill, there are certain things that managers should never, ever delegate.

Because the tasks that managers shouldn’t pass off tends to be less concrete than specific projects (“Can you draft a summary of what was covered at our wellness seminar and send it to everybody?”), managers often thinks it’s OK to let others take over. But as the Laura Stack, the president and CEO of consulting firm The Productivity Pro, Inc., points out that’s a huge mistake.

Here are three duties Stack says great managers should never delegate:

1. The recruiting process

If there’s a skilled, effective hiring team in place, it’s tempting to take a more hands off approach to recruiting and hiring new staffers. But managers are ultimately responsible for creating the most effective teams. So whether managers are in charge of the entire HR department or overseeing a specific group within that department (e.g., the Benefits staff), they should always 

Click here for entire article. 

Tip Tuesday! Overtime crisis nearing: 6 steps to avoid pitfalls

by Christian Schappel

It would be hard for any regulatory change to be as impactful as the passage of the Affordable Care Act. But the DOL’s impending changes to the overtime exemption rules may be exactly that. 
As if that wasn’t stressful enough, you’ll have far less time to prepare for the fallout of the overtime rule changes than Obamacare gave you.
The new rules won’t be phased in over the course of a decade like the ACA’s mandates. All signs point to the overtime rules taking effect before the end of 2016.

They’ll affect 2016 budget, staff plans

That means the time to start prepping is now, since the overtime rules will affect your budget and staffing plans for the 2016 calendar year.
And even without the final rules in hand yet (the comment period for the proposed rules just ended), there are steps employers would be wise to take now to brace for them — no matter what form the rules ultimately take:

1. Audit employees’ work hours

Click here for entire article. 

IRS reminder: Your contractors have to pass this test, too

by Christian Schappel

Earlier this summer, the DOL issued a statement that most thought laid to rest any argument as to which independent contractor classification test employers should follow. But since then, the IRS has essentially said, “Not so fast.” 

On July 15, 2015, the DOL published an Administrator’s Interpretation letter, penned by DOL Administrator David Weil on how employers should distinguish between employees and contractors and classify accordingly.

To cut to the chase, Weil said employers and courts should use the DOL’s six-factor “economic realities” test to determine whether someone is a true independent contractor or not.

In a nutshell, the test is designed to measure a person’s “economic dependence” on a single business. The greater a person’s dependence on that business, the more likely it is that person’s an employee.

The six factors of a person’s working relationship with a business that are to be evaluated under the test:

1. The extent to which the work performed is an integral part of the employer’s business
2. The worker’s opportunity for profit or loss depending on his or her managerial skill
3. The extent of the relative investments of the employer and the worker
4. Whether the work performed requires special skills and initiative
5. The permanency of the relationship, and
6. The degree of control exercised or retained by the employer.

Click here for entire article. 

New ACA nondiscrimination rules: But these aren’t the rules you’re looking for

by Christian Schappel

The Department of Health & Human Services (HHS) just issued proposed nondiscrimination rules that would be applied under the health reform law. 
After reading a press release titled something to the effect of “New ACA nondiscrimination rules issued,” we were reminded of the scene from Star Wars: A New Hope in which Obi-Wan Kenobi plays a Jedi mind trick on a stormtrooper and says, “These aren’t the droids you’re looking for.”
Why, of all things, did that pop into our head? Because, in fact, these aren’t the nondiscrimination rules we’re looking for.

Still waiting …

As you’ll likely recall, when the ACA was passed, the feds said it would subject group health plans to nondiscrimination rules similar to those that currently apply to self-insured group health plans. The rules would prevent health plans from discriminating against highly compensated employees by offering them benefits not open to their lesser-paid counterparts.

The problem is, the feds said the rules wouldn’t apply until official guidance had been released about them. So feds kept employers waiting and searching for the guidance. It was then expected to finally be released in 2014, but it was delayed due to some lingering questions IRS officials had.

Click here for entire article. 

5 biggest reasons employees quit jobs quickly

by Christian Schappel

As you know all too well, it’s hard to hold onto new employees. Thus, onboarding programs were born. The problem is, there are several reasons onboarding may not be working. 

In fact, recent research by BambooHR, a software company, found that 31% of people have quit a job within the first six months.

This does not speak well of employers’ onboarding efforts.

To find out exactly what’s going wrong in the onboarding process, BambooHR surveyed 1,005 U.S. employees over the age of 24 to find out what has made them quit jobs in the past and what could be done to improve employers’ onboarding programs.

Why they’ve quit quickly

Here are the top five reasons U.S. workers gave for leaving new jobs shortly after being hired:

1. Changed mind on work type (in other words, they were still deciding on their career path and it turns out they didn’t like the one they’d chosen)

Click here for entire article

Tip Tuesday! 5 ways to create a thriving work culture without breaking the bank

by Amanda Abrom

Employers don’t need a showy benefits package to create a great work environment, and attract and retain top talent.
Here are five ways that HR pros can help managers to create a successful work culture that attracts and motivates employees without breaking the bank:

1. Define the mission

Clearly define company values and connect employees’ work to a purpose. Employees are happier when they work toward a goal and know they’re making an impact.

2. Encourage openness

Be honest about what’s really going on in the company – the good and bad. Openness will create trust, foster accountability and build a team environment. And if you’re truthful about failures, employees might even bring forward solutions.

3. Help employees grow

Click here for entire article.

Why, how and when you must grant ADA leave

by Julian Lopez

A new compliance nightmare is driving employers batty: administering leave as an accommodation under the ADA. It’s not hard to slip up and put yourself right in the crosshairs of your employees’ attorneys. 

One of the more common mistakes: refusing to let employees take additional leave as an accommodation, believing FMLA and/or a company’s own leave policies provide all the time off required under law — only to find out the hard way that the EEOC or courts disagree.

The reality: If an employee has an ADA-covered disability and requests leave, you’ve got to consider it as an accommodation under the ADA — regardless of whether the employee’s exhausted FMLA leave or exceeded the limits in your leave policy

Employment law attorney Penny C. Wofford from the firm Ogletree Deakins is here to help. In a presentation at SHRM’s 2015 annual conference, she said employers must consider two things when workers request ADA leave:

Click here for entire article.

Helping your managers understand their strengths: An offbeat quiz

by Tim Gould

Every manager can use a quick self-audit now and then.  

Take a look at this quiz, commissioned by SwitchmyBusiness.com, a U.K.-based utility consulting firm. It’s a kind of quirky test designed to help managers determine what their management style is, where their strengths lie and little things to remember when the going gets a little tough.


Be forewarned: Those Brits spell some words funny.

Click here for entire article.

3 keys to successful recognition programs

by Tim Gould

Employee recognition programs have kind of become old hat these days. So how can you pump new life into this morale-building effort?


The most common characteristics of high-ROI recognition programs — regardless of their monetary value — are their spontaneity and perceived value by employees themselves.

In reality, the cost of some of most effective spot awards and bonuses often amount to less than 1% of base pay — and the awards don’t even have to be given in cash.

Less sense of entitlement

Part of the problem with traditional end-of-year or quarterly bonuses (apart from the fact that they cost employers an average of 10% of base pay) is that employees expect to receive them for reaching certain goals.

Click here for entire article.

Tip Tuesday! Bill would bring back popular Obamacare workaround: Stand-alone HRAs

by Jared Bilski

Remember that $36K penalty the IRS felt the need to remind everybody it would impose on employers that tried to give employees untaxed funds to purchase healthcare coverage? Well, there’s now hope that some employers won’t have to worry about this after all. 

That’s because legislators re-introduced the Small Business Healthcare Relief Act in both the House (H.R. 2911) and the Senate (S. 1697).

The timing of the legislation is significant because the penalty phase for stand-alone HRA usage kicked in on July 1, 2015.

If passed, the bill would provide an exception to Obamacare regs and allow some small businesses to use pre-tax dollars to help employees purchase healthcare benefits on the exchanges, as well as other out-of-pocket medical expenses. This is a tactic some employers were planning to take in lieu of providing their employees with health insurance under Obamacare’s employer mandate.

Click here for entire article.