March 2019 Issue by Cynthia Thompson

Volume 9 : Issue 3

www.HRProfessionalsMagazine.com

2019 Rising Stars in Employment Law

The First Step Act 10 Years After the

Lilly Ledbetter Fair Pay Act Preview of the

SHRM Talent Conference

Emily

M. Dickens,J.D.

SHRMâ&#x20AC;&#x2122;s

Corporate Secretary and Chief of Staff

Photo by Jessica Knox

International Presence. Local Knowledge. EMPLOYERS AND LAWYERS, WORKING TOGETHER Ogletree Deakins is one of the largest labor and employment law firms representing management in all types of employment-related legal matters. The firm has more than 850 lawyers located in 53 offices across the United States and in Europe, Canada, and Mexico.

www.ogletree.com BIRMINGHAM OFFICE

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MEMPHIS OFFICE

420 20th Street North Suite 1900 Birmingham, AL 35203 205.328.1900

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74% of

employers say they’ve hired the wrong person for a position. www.HRProfessionalsMagazine.com Editor

Cynthia Y. Thompson, MBA, SHRM-SCP, SPHR Publisher

The Thompson HR Firm, LLC Art Direction

Park Avenue Design Contributing Writers

Austin Baker Stephen Clement Harvey Deutschendorf L. Eric Ebbert Brad Federman Stewart Gott JonVieve D. Hill Russel W. Jackson Sheerin Mehdian Greg Siskind Stacey Stewart Johnny C. Taylor, Jr. James V. Thompson Gordon Tredgold Evan S. Weiss Richard Works Joshua B. Zugish Board of Advisors

Austin Baker Jonathan C. Hancock Ross Harris Diane M. Heyman, SPHR Terri Murphy Susan Nieman Robert Pipkin Ed Rains Michael R. Ryan, PhD Contact HR Professionals Magazine: To submit a letter to the editor, suggest an idea for an article, notify us of a special event, promotion, announcement, new product or service, or obtain information on becoming a contributor, visit our website at www.hrprofessionalsmagazine.com. We do not accept unsolicited manuscripts or articles. All manuscripts and photos must be submitted by email to Cynthia@hrprosmagazine.com. Editorial content does not necessarily reflect the opinions of the publisher, nor can the publisher be held responsible for errors. HR Professionals Magazine is published every month, 12 times a year by the Thompson HR Firm, LLC. Reproduction of any photographs, articles, artwork or copy prepared by the magazine or the contributors is strictly prohibited without prior written permission of the Publisher. All information is deemed to be reliable, but not guaranteed to be accurate, and subject to change without notice. HR Professionals Magazine, its contributors or advertisers within are not responsible for misinformation, misprints, omissions or typographical errors. ©2019 The Thompson HR Firm, LLC | This publication is pledged to the spirit and letter of Equal Opportunity Law. The following is general educational information only. It is not legal advice. You need to consult with legal counsel regarding all employment law matters. This information is subject to change without notice.

Features

Employment Law

Top Educational Programs for HR Professionals

Industry News

4 note from the editor 5 Profile: Emily M. Dickens, SHRM Corporate Secretary and Chief of Staff 14 Why Are You Playing Russian Roulette with the Leadership and Direction of Your Company? 18 The First Step Act and SHRM 20 7 Things HR Professionals Need to Know About Choosing the Best Vendors 21 Bridge Your Leadership Gap at Leadership Louisville 22 People Plans – the Key Variable to Strategic Planning 42 The U.S. Economy is Strong, But Fragile 46 10 Things Great Leaders Say to Create Highly Engaged Teams 49 7 Skills Leaders Will Need in Tomorrow’s Workplace 51 Lisa May Assumes Role of Senior Vice-President of Strategic Solutions for Data Facts

7 Emory Law Legal Training for HR Professionals 9 WGU Bachelor’s and Master’s Degree Fully Aligned with SHRM’s HR Curriculum 19 University of Illinois at Urbana-Champaign Master of Human Resources and Industrial Relations

Employee Benefits

26 Top Health and Welfare Considerations in an M&A Deal

Rising Stars in Labor and Employment Law 28 Ogletree Deakins 29 Wright Lindsey Jennings Bass, Berry & Sims 30 FordHarrison 32 Littler Martenson, Hasbrouck & Simon LLP 33 Kullman Firm Fisher Phillips 34 Cross, Gunter, Witherspoon & Galchus, P.C.

10 Soft Skills a “Good Fit” for 11th Circuit? Ogletree Deakins Names Kim Hodges 11 Managing Shareholder of Memphis Office Ten Years After Ledbettter – Why Employers 12 Need to Worry about Gender Pay Equity States are Going to Pot: Medical Marijuana 16 Laws Pose Increased Risks for Unwary Employers Seventh Circuit Holds Disparate Impact Age 24 Claims Not Applicable to External Job Applicants Cross, Gunter, Witherspoon & Galchus, P.C. 35 Seminars Calculating an Employee’s “Regular Rate of 36 Pay” Under the FLSA The Longest Government Shutdown…Ever! 38 Independent Contractor Analysis: 40 NLRB’s “SuperShuttle” Ride Back to It’s Prior Standard Trump Administration Releases Final Rule 44 on H-1B Lottery Process 6 Preview of SHRM-Atlanta SOAHR Conference March 25-27 7 Online SHRM Certification Exam Prep Class Begins April 24 8 2019 SHRM Talent Conference & Exposition in Nashville April 8-10 39 SHRM-Memphis Executive Roundtable Meeting February 7 47 Preview TN SHRM Strategic Leadership Conference in Nashville April 26 48 Preview of ARSHRM 2019 HR Conference & Expo in Hot Springs April 3-5 50 Preview of 2019 ALSHRM State Conference & Expo in Birmingham May 14-15 April 2019 issue features Talent Management and Recruiting plus Employment Law and Employee Benefits Updates ARSHRM 2019 State Conference & Expo in Hot Springs April 3-5 SHRM Talent Conference & Expo in Nashville April 8-10 TN SHRM Strategic Leadership Conference in Nashville April 26 Deadline to reserve space March 10 www.HRProfessionalsMagazine.com

a note from the editor

Strategic HR Leadership Workshop for Walgreenâ&#x20AC;&#x2122;s Regional HR Team Please take the time to congratulate those you know who made this prestigious list. We hope you will call on them as you navigate new legal issues. One of our Rising Stars has also contributed an article in this issue. Don't miss Russell Jackson's article on Page 24 about the 7th Circuit Court of Appeals ruling that disparate impact age claims are not applicable to external job candidates. This is a blow to baby boomers who are currently seeking new employment! Russell is with HarrisonFord in Memphis. (L-R) Whitney Fowler, Edwina Simpson, Cindy Howard, Debbie Carmony, Jeff Fendley, Shawn Curtis, Melody Collier, Miguel Valdes. Cynthia presented a Strategic HR Leadership Workshop to Walgreenâ&#x20AC;&#x2122;s Tennessee and Kentucky Field HR Team in Memphis on January 15. Participants received 2.00 SHRM PDCs and 2.00 HRCI Business credits.

are so honored to have Emily M. Dickens, J.D., SHRM's Corporate Secretary and Chief of Staff, on our March cover. You can read all about her many accomplishments at SHRM on Page 5. You can also read about the new SHRM-backed legislation, the First Step Act, which the U.S. Senate and the House of Representatives passed in December. This new bill will help fix our broken criminal justice system and get a lot of people back to work. This article is written by SHRM CEO, Johnny C. Taylor, Jr. I hope you will join us on March 18-20 as we hear great presentations from subject matter experts on public policy issues that impact our workforce at the SHRM Employment Law and Legislative conference in Washington, D.C. The most exciting part of this conference is visiting our state legislators on Capitol Hill and discussing these issues with them. Please follow me on Twitter @cythomps for up-to-the-minute coverage of the conference! We will also be bringing you Facebook Live interviews from the conference with keynote speakers and thought leaders. Be sure to Like us on Facebook in order to receive instant notifications. We are featuring Rising Stars in Labor and Employment Law in our March issue. I know you will enjoy reading about these attorneys who are 40 or under and have practiced ten years or less and are already top performers in their industry.

It is exciting to be a media sponsor for the 29th Annual SHRM-Atlanta HR Conference on March 25-27 again this year. We are looking forward to seeing our SHRM friends in Atlanta! There will be over 30 innovative, career-advancing educational sessions in addition to thought-compelling keynote presentations. Participants can earn up to 12.00 SHRM and HRCI recertification credits. There will also be a 3-hour pre-conference workshop where you can earn 6.00 hours of extra credit on March 25. We will bring you the exciting details in real time on Twitter, Facebook, and LinkedIn. If you are not currently following me on social media, I encourage you to do so. Don't miss any of this exciting coverage! Mark your calendar for March 21st, as we will be presenting our monthly webinar sponsored by Data Facts. I will be presenting a recap of the SHRM Employment Law and Legislative Conference for those who were unable to attend. Watch your email for your invitation! If you are not currently on our email list, please let us know. We will be happy to add you. Don't miss this opportunity to obtain complimentary SHRM and HRCI recertification credits!

cynthia@hrprosmagazine.com @cythomps on Twitter

www.HRProfessionalsMagazine.com

Emily

Photo by Jessica Knox

on the cover

M. DICKENS

EMILY M. DICKENS, J.D. SHRM's Corporate Secretary and Chief of Staff Emily M. Dickens, J.D., serves as SHRM's Corporate Secretary and Chief of Staff. She is the executive responsible for coordinating staff to implement the CEO's vision, serving as corporate secretary for the SHRM Board and subsidiary boards, as well as managing external partnerships and providing oversight for the Government Affairs division. Dickens is an attorney with significant and progressive experience in government, higher education and the non-profit sector. She has served as a member of the leadership team at the University of North Carolina system, the Association of Governing Boards of Colleges and Universities and the Thurgood Marshall College Fund. Her prior roles include general counsel, chief relationship officer, senior vice president, vice president for public policy and assistant vice president for federal relations. Dickens has also worked at Duke University and Fayetteville State University in administrative and external affairs roles. She is actively engaged in board service. She formerly served on the Fayetteville/Cumberland (N.C.) Chamber of Commerce (Secretary of the Board), the Cumberland County Workforce Development Board, the North Carolina Partnership for Defense Innovation Board, and the Educational Advancement Foundation. She is currently a member of the Advisory Council of the Congressional Hispanic Caucus Institute (CHCI) and the Advisory Board of the College of Arts and Sciences at North Carolina Central University, and she chairs the International HBCU Task Force for Alpha Kappa Alpha Sorority, Incorporated. She is a graduate of North Carolina Central University and North Carolina Central University School of Law. ď Ž

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Presents

Affordable Online SHRM-CP® | SHRM-SCP® Certification Exam Prep Class Online classes begin April 24, 2019 and will meet twice per week for 12 weeks on Monday and Thursday evenings from 6:00 PM to 7:30 PM. The total cost of the SHRM-CP® | SHRM-SCP® Online Certification Exam Prep Class is $995

SHRM Learning System® Participant Materials

You may pay by PayPal, credit card or check.

Spring Exam Window May 1 – July 15, 2019 For more information visit shrmcertification.org

Deadline to register is April 17 Contact cynthia@hrprosmagazine.com OR visit our website at www.hrprofessionalsmagazine.com

About the instructor: Cynthia Y. Thompson is Principal and Founder of The Thompson HR Firm, LLC, a human resources consulting company in Memphis, TN. She is a senior human resources executive with more than twenty years of human resources experience concentrated in publicly traded companies. She is also the Publisher | Editor of HR Professionals Magazine, an HR trade publication distributed to HR professionals in Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, and Tennessee. The mission of the publication is to inform and educate HR professionals. Cynthia has an MBA and is certified as a Senior Professional in Human Resources by SHRM and HRCI. Cynthia is a faculty member at Christian Brothers University in Memphis teaching Human Resource Management. Cynthia also teaches online HR Certification Exam Prep Courses for HRCI and SHRM. She is a sought-after speaker on HR Strategic Leadership.

Put the Law to Work for Your Career Legal Training for HR Professionals Online and On-Campus Options “The Emory Law juris master program provided me with the legal knowledge essential for executive level human resources leadership.” Betsy Hames Associate Dean & Chief Human Resources Officer Duke University School of Medicine 2014 JM Graduate

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2019 SHRM TALENT CONFERENCE & EXPOSITION APRIL 8 – 10, 2019 | NASHVILLE, TN Competition is stiff for your company’s most valuable resource – talent. With more job openings than qualified candidates, your talent strategies must be tailored to the realities of today’s job market. At #SHRMTalent, you’ll gain expert tips to compete in a tough market while hiring the right people who enrich your workplace. Explore new ways to access untapped talent pools, communicate the true value of benefits, and retain engaged employees at every level.

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Soft Skills a

“Good Fit” for 11th Circuit?

By JOSHUA B. ZUGISH

In a recent case before the11th Circuit Court of Appeals, Martin V. Shelby County Board of Education, 2018 WL 6190366 (11th Cir. 2018), the Court affirmed summary judgment and dismissal of a Title VII race discrimination case brought by Sharon Martin against the Shelby County Board of Education and certain Board members. Martin, who is black, alleged the Board intentionally discriminated against her on the basis of race when it promoted a white candidate instead of her. While the decision provides an efficient and thorough recitation of a “failure to promote” legal analysis, of particular note was the “whole comprehensive approach” to vetting applicants that appeared to incorporate consideration of soft skills in the interview and selection process. Failure to Promote Legal Considerations In a failure-to-promote scenario, a plaintiff may establish a prima facie case of discrimination by showing that: (1) she was a member of a protected class; (2) she applied and was qualified for a position for which the employer was accepting applications; (3) despite her qualifications, she was not promoted; and (4) the position remained open or was filled by another person outside her protected class. If a prima facie case is presented, the burden shifts to the defendant employer to articulate a race-neutral basis for the employment action. This is a light burden that, if met by the defendant employer, returns the burden to the plaintiff to prove the employer’s stated reason for its conduct is a pretext for discrimination.

“People Skills” and a “Customer Service Mindset” In this instance, Martin established a prima facie case of discrimination. However, the defendant employer met its burden of articulating a race-neutral basis for it hiring decision. Notably, the Court found the Board’s race-neutral reason to hire George instead of Martin adequate: [T]he interviewers decided that they wanted someone with excellent people skills and a customer service mindset, and the ‘consensus among the interviewers was that Ms. George would have done the best job and was the best choice. 10

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While subjective and open-ended notions of who may have “people skills” and a “customer service mindset” can lead to problems in the hiring process, in this case the Court found consideration of such traits to be an adequate, nondiscriminatory reason to choose one candidate over another, regardless of race. This sense of who may be the “best fit” commonly impacts the review of job candidates, yet it is a subjective concept that can lead to a variety of problems, including claims of discrimination.

Consistency is Key At first glance, the Court’s affirmation of the interview process as nondiscriminatory suggests that soft skills may be considered in the hiring process with little risk. Further review, however, shows the Court’s holding is buttressed by other considerations of fairness and consistency in the hiring process. The Court took care to note the following occurred in the hiring process: - The hiring panel asked all five candidates for the position the same questions; - The panel made notes of each candidate’s answers; - The panel did not use numerical ratings for any of the candidates which, despite being a deviation from the forms and usual process, was applied equally to all candidates regardless of race; - The panel looked favorably on George’s prior experience as a substitute in the office, together with her “demonstrated organizational skills and ability to multitask” in recommending her for hire. Martin, however, relied on the following evidence in support of her discrimination claim: - Evidence comparing her qualifications against George’s; - The panel’s focus on criteria not emphasized in the job description;

- The panel’s decision not to use a numerical rating system as provided on the interview forms and instead use a “whole comprehensive approach” to score the candidates. Under this “whole comprehensive approach,” the panel discussed each candidate’s strengths and weaknesses, any personal knowledge the interviewers had of each candidate, and the “overall impression” of the candidate after each candidate’s interview. While this comprehensive approach was a deviation from the employer’s own standard procedures, the Court found it was not sufficient evidence of pretext when the comprehensive approach was used equally on all candidates, including a white candidate who arguably had superior qualifications over George. The Court noted: Because applicants of all races – and specifically both a white and black candidate – were affected in the same manner by the panel’s choices during the interview process, we cannot say that this evidence creates a genuine issue of material fact about whether the panel’s process was ‘actually designed to conceal a racially discriminatory motive.

Lessons Learned from Martin v. Shelby County Board of Education So what lessons do we learn from this case and its affirmation of a hiring process that relied, in part, on soft skills and a less technical approach than many? First, even though the defendant employer successfully defended a discrimination claim in this case, the deviation from standard procedure and use of a “whole comprehensive approach” provided fuel for a legal claim from Martin. The more consistent the hiring process is, with established process and evenly applied standards for review, the less risk of a discrimination claim. Second, the employer’s legal defense in this case benefited greatly from the panel asking the same questions of each candidate and reviewing each candidate similarly. Deviation from established process for one candidate over another enhances risk of a discrimination claim. Third, it is important to ensure that hiring authorities, whether individuals or panels, are well trained in the employer’s established hiring procedures and the importance of following them to help avoid legal arguments from an applicant that does not get hired. Lastly, if soft skills are important to the vacant position, consider how to articulate those skills as a qualification or essential duty in the job announcement and position description. This helps avoid arguments that an individual or panel has gone off script to consider subjective notions of being a “good fit” or “good with people” that may result in arguments of bias and enhance the risk of discrimination claims.

Ogletree Deakins Names

Kim Hodges Managing Shareholder of Memphis Office MEMPHIS, Tenn. – February 5, 2019 – Ogletree Deakins, one of the largest labor and employment law firms representing management, is pleased to announce Kim Hodges has been named managing shareholder of the firm’s Memphis office. Hodges was elected to the position during Ogletree Deakins’ annual Shareholders Meeting. In her role, Hodges will oversee the attorneys in the firm’s Jackson and Memphis office, as well as Ogletree Deakins’ geographic footprint in Tennessee, Mississippi, and Arkansas. Throughout her career as a litigator, Hodges amassed a wealth of employment and commercial litigation experience and defended corporate clients in state and federal courts across the United States. She has represented clients in appeals before the 3rd, 4th, 6th, 8th, 9th and 11th Circuit Courts of Appeal and also has experience defending clients in matters before the Equal Employment Opportunity Commission, the Department of Labor, and appeals before the Administrative Review Board. Her litigation experience runs the gamut of employment law and related issues, including: all types of employment discrimination and harassment, wage and hour, Fair Labor Standards Act classification, state and federal disability discrimination and accommodation, public access for disabled individuals, Family and Medical Leave Act leave and interference, Age Discrimination in Employment Act, complex contracts, non-competition and non-solicitation agreements, trade secrets, whistleblower claims, tort claims, and antitrust/unfair competition.

Joshua B. Zugish, Of Counsel Ogletree Deakins Birmingham Office joshua.zugish@ogletree.com www.ogletree.com www.HRProfessionalsMagazine.com

Ten Years After Ledbetter Why Employers Need to Worry about Gender Pay Equity By JONVIEVE D. HILL and EVAN S. WEISS

lmost ten years to the day after the Lilly Ledbetter Fair Pay Act of 2009 went into effect, Congress may be working towards another development in pay equity. On January 30, 2019, House Speaker Nancy Pelosi announced the reintroduction of the Paycheck Fairness Act. Originally introduced back in 1997, the proposed Paycheck Fairness Act represents an attempt to close any gender earnings gap that may still exist more than 50 years after the Equal Pay Act made pay disparities on the basis of gender illegal. While previous iterations of the Paycheck Fairness Act have passed a Democrat-controlled House of Representatives, none of the proposed versions have been able to overcome Republican majorities or filibusters in the Senate. The current bill was introduced in the House by Representative Rosa DeLauro, D-Conn., and in the Senate by Senator Patty Murray, D-Wash. The bill has 240 co-sponsors in the House, and 45 co-sponsors in the Senate. There is little indication, however, that any Republican Senators will cross party lines to enact this Congress’s proposed legislation.

History of Equal Pay Laws A precursor to the wide-sweeping Civil Rights Act of 1964, President John F. Kennedy signed the federal Equal Pay Act (“EPA”) into law in 1963. The law made pay disparities between women and men who perform the same work illegal. Specifically, the EPA requires that employees who perform substantially equal work in the same establishment for positions that require equal skill, effort, and responsibility and are performed under similar working conditions must be compensated equally. Pay equity includes not only base wages, but also bonuses, benefits, overtime pay, etc. Many states have their own laws that mimic the federal EPA, and some go further by requiring even more stringent justifications for pay differences between men and women. In the 2007 case of Ledbetter v. Goodyear Tire and Rubber Company, the Supreme Court interpreted the EPA’s statute of limitations in a way that would have precluded many claims under the EPA. The EPA requires employees to file suit within 180 days of an alleged discriminatory act. In Ledbetter, the Court held that the 180-day period ran only from the first day the discriminatory pay decision was made. Under that ruling, any employee who did not discover discriminatory pay within six months could no longer bring suit under the EPA. Ms. Ledbetter, who worked for Goodyear for nearly 20 years before learning that her male counterparts were being paid between 15 and 40 percent more than her, was denied relief on the grounds that she failed to file a timely claim. The decision created a difficult hurdle 12

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for challenging pay decisions in the requisite time period when the employee is not aware of the differences in pay, particularly because many employers discourage their employees from discussing wages with their co-workers. In 2009, President Obama signed the Lilly Ledbetter Fair Pay Act. The Act revised the interpretation of the EPA’s statute of limitations, effectively mooting the Ledbetter decision. Under the 2009 Act, each paycheck that reflected an earlier discriminatory pay decision renewed the statute of limitations. Accordingly, an employee like Ms. Ledbetter, who was receiving less pay than her male counterparts for the same work, could sue within 180 days of any paycheck that was the result of an earlier discriminatory decision. The Act essentially restored the prior position of the Equal Employment Opportunity Commission that each paycheck delivering discriminatory compensation is an actionable wrong, regardless of when the discrimination began.

The Paycheck Fairness Act of 2019 The Paycheck Fairness Act is intended to provide added protections in areas not addressed by the EPA. These include allowing workers to sue for damages in cases of pay discrimination, providing more training for employers on collecting pay gap information and eliminating pay disparities, prohibiting employers from inquiring about salary history with applicants, banning salary secrecy, and increasing penalties for employers who retaliate against employees for sharing wage information with their co-workers. Ledbetter, now an activist for wage equity, has pushed for the law along with a wide range of unions, women’s groups, and a sizable group of Democratic lawmakers. The potential success of the bill appears to come down to party politics. Although many Democrats continue to push for the passage of the Paycheck Fairness Act, many Republicans have raised concerns that the bill would increase litigation by making it too easy to sue an employer and actually discourage employers from hiring women to prevent potential exposure to litigation. With some limited exceptions, votes on previous versions of the Act have gone along party lines.

The Gender Pay Gap Today While women’s earnings as a percentage of men’s have risen over the last several decades, certain statistics make clear that an earnings gap still exists. The extent of the gap varies, but it exists in most industries, across all educational levels, and in every state in the country, ranging

from Vermont, where, according to the U.S. Bureau of Labor Statistics in 2016, women’s earnings were roughly 90% of men’s earnings, to Utah, where that number was below 70%. Opponents of the Paycheck Fairness Act point to research indicating that factors other than gender contribute to a difference in earnings between men and women. For instance, different occupational patterns and the impact of decisions related to caregiving for dependents also create discrepancies in earnings between men and women in the workforce. Proponents’ response to that point is that the provisions of the legislation that prohibit inquiring about pay history and banning salary secrecy are designed to not only correct any intentional gender discrimination that occurs, but also some of the other factors that lead to unintentional systemic discrimination.

Advice to Employers The contentious debate over equal pay has existed for decades and will likely continue into the foreseeable future. Regardless of whether the Paycheck Fairness Act passes this year, employers should recognize the importance of and heightened attention to gender pay equity issues. Employers are advised to proactively examine their compensation practices to find and remediate any illegitimate pay discrepancies. If an employer discovers different compensation for employees who perform the same job that cannot be justified by factors such as education, seniority, experience, or responsibility, the employer should take steps to correct these disparities. Because pay equity is an ongoing issue, employers should frequently conduct internal audits to identify any potential areas where pay disparity may exist. The need for ongoing

review is of particular importance since the passage of the Lilly Ledbetter Fair Pay Act, because the discriminatory decisions of predecessors may be the subject of future liability for an organization until any pay discrepancy is corrected. One action that no employer should take in response to any changes in pay equity laws is to hire fewer women in an attempt to avoid exposure to pay-disparity litigation. Such a policy would be in clear violation of Title VII of the Civil Rights Act of 1964. Even though it appears that the current iteration of the Paycheck Fairness Act is unlikely to be enacted in the near future, employers should be aware that many of the proposed protections, in particular prohibitions on asking about salary history, have already been made law in several states. Employers who wish to maintain best pay equity practices and legal compliance in their state should consult with an attorney. Furthermore, any decision-makers within a company should be consistently trained on how to make appropriate pay decisions.

JonVieve D. Hill, Attorney Martenson Hasbrouck & Simon LLP jhill@martensonlaw.com www.martensonlaw.com

Evan S. Weiss, Attorney Martenson Hasbrouck & Simon LLP eweiss@martenson law.com www.martensonlaw.com

Martenson, Hasbrouck & Simon LLP focuses its practice

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Why are you playing Russian roulette with the leadership and direction of your company? By BRAD FEDERMAN and ANDREA BURLESON

You need to bring in a strong executive…a heavy hitter, but you are worried. The last time you brought someone in they did not last and created a great deal of damage before they left. A position opened up in your company, but it will be filled by an internal promotion. Multiple people are vying for the promotion and each of them have their sponsors. How do you promote the right person? When hiring for a senior leadership role, you must take a comprehensive look at an individual before making an informed promotion and selection decision. What is “Leadership Assessment” and why do companies use it? “Leadership assessment” typically describes a process designed to measure people’s problem-solving skills and personality traits as these relate to leading and managing others. While there are many types of assessment “tools” or “instruments” on the market, most purport to do something similar: Provide information based on data given by the person being assessed, that increases the accuracy of making personnel decisions such as hiring the right candidates or targeting developmental efforts to the specific needs of individuals. What’s the difference between leadership and executive assessment? Both leadership and executive assessments share the goal of helping companies make decisions about the hiring and development of their leaders. Leadership assessment, which is the broader term, can be used for positions ranging from first-line supervisors through senior executives. Executive assessment is a type of leadership assessment focused on identifying and developing a company’s top executives (often referred to as “C-Suite”). An executive assessment is usually a longer process comprised of multiple steps, with input from several stakeholders. The stakeholders provide insight into leaders’ business and functional expertise, learning agility, strategic thinking, organizational fit and the ability to motivate and inspire followership and adapt, change and evolve the company. The key differentiator between the two is that an executive assessment is specifically designed to identify strengths and potential risks (or derailers) for an organization’s top leaders where the risk of success or failure has significant consequences for a company’s future. Well-developed executive assessment seeks to provide a comprehensive picture of a person’s capabilities so as to optimize the process’ predictive power and reduce the probability of making costly mistakes. Tools used as part of leadership assessment. Any robust leadership assessment process will utilize a mix of instruments or “tools” that, when taken together, form an increasingly complete picture of an individual and his/her current capabilities and future potential. When deciding which tools to utilize, the process usually begins with a careful study of the position and its success factors. Other considerations include: 14

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• The number of applicants that typically apply for the position • Cost associated with purchasing, administering, and interpreting the tools • Costs/consequences associated with hiring the wrong people (turnover, theft, security and legal violations, potential damage to the company’s income or reputation, etc.) • Legal considerations including the instruments’ compliance with hiring laws • The utility or “Return on Investment” of the process and tools used • The instruments’ perceived fairness and job relevance by applicants (face validity) • The tool’s ability to accurately predict success (validity) Most leadership assessments are comprised of at least two or more different and, preferably, unrelated tools and/or processes. Examples provided by U.S. Office of Personnel Management’s include: • Structured interviews based on a job analysis so that questions and the scoring of people’s responses link to job relevant criteria and success factors. • Mental abilities tests that evaluate reasoning and problemsolving capabilities. • Personality tests, which provide information about a person's motivations, preferences, interests, emotional make-up, and style of interacting with people and situations. • Integrity tests, which evaluate applicants’ tendency to be honest, trustworthy, and dependable. • Job knowledge tests, which are designed to assess technical or professional expertise in specific knowledge areas. Job knowledge tests evaluate what a person knows at the time of taking the test but not what they are capable of learning in the future. • Work Sample tests, which requires applicants to perform tasks or work activities that mirror the tasks employees perform on the job. • Multi-rater assessments in which an individual’s manager, peers, company leaders, and customers evaluate that person on behaviors linked to leadership effectiveness. • Assessment centers, which employ multiple methods and exercises to evaluate a wide range of competencies used to make a variety of employment decisions (e.g., employee selection, career development, promotion). Assessment centers can be used to assess groups of people at relatively the same time. Many assessment center exercises resemble work sample tests designed to simulate the actual challenges found on the job.

A real business case can be made for using a leadership assessment as part of pre-employment testing. The cost of a bad hire depends on the job’s scope and level. In a recent survey by Career Builder, companies lost an average of $14,900 on every bad hire they had made in the past year…and this is a common mistake. Nearly 74% of employers say they've hired the wrong person for a position. A white paper published by the Center for American Progress indicated that the cost of a bad hire for positions paying $75,000 per year or less is about 20% of an employee’s annual salary. The cost of a bad hire for highly complex positions that require specialized training and/or education tend to have disproportionately high turnover costs as a percentage of salary (up to 213%). While the cost of investing in a well-designed pre-employment assessment process may seem prohibitive at first, a legal, valid hiring process enables a company to make legally defensible and valid personnel decisions that save money, time, and potentially – reputation—in the long run. That said, no assessment process is ironclad. Even when using valid measures, administered by trained professionals, with multiple data points, potentially great hires get rejected while people who don’t work out get hired. A solid pre-hire assessment process won’t eliminate decision-making errors, but it can significantly reduce them.

Effective leadership assessments are typically comprised of a mix of tools that evaluate thinking skills, personality, and motivations so that company leaders have objective, relevant, and legally defensible data for making personnel decisions. Multi-tool assessment processes create a data-rich picture of a candidate’s abilities across success factors that were previously identified, through job analysis, as important to success on the job. When used for selection, a properly-designed leadership assessment process provides not only legal defensibility, but also enables employers to make the best possible decisions about people. An assessment process could confirm a hiring manager or hiring team’s “gut” about a person, but add depth as to why the candidate is or is not a fit. In other cases, having multiple tools can surface red flags that any one tool alone can’t fully flesh out, giving decisionmakers valuable data in determining a candidate’s viability for the role and/ or company. When used for development, a leadership assessment allows companies to be thoughtful about their investments in interventions such as training, education, or coaching that remediate gaps and leverage strengths so as to increase peoples’ effectiveness in current roles and support their growth into higher level roles.

Other uses for leadership and executive assessments. • Development

• Training

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• On-boarding

• Pre-promotion testing

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States are Going to Pot:

Medical Marijuana Laws Pose Increased Risks for Unwary Employers By L. ERIC EBBERT

Legislation allowing marijuana use is sweeping across America. And it may have unexpected consequences for employers. Currently 33 states plus the District of Columbia have legalized medical use of marijuana. These states typically require patients to be certified by a physician and to register with the state. Some states provide workplace protections to employees who lawfully use marijuana for medicinal purposes.

government agencies issued Chance a right-to-sue letter. Accordingly, Chance filed suit within 90 days. He sued Kraft Heinze Foods Company for violation of Delaware’s Medical Marijuana Act among other causes of action. Unlike the medical marijuana statutes of most other states, the Delaware act prohibits employers from discriminating against employees who use medical marijuana as authorized by the Act.

In addition, ten states and the District of Columbia have approved recreational use of marijuana for adults who are 21 years and older. These laws may even allow individuals to grow their own marijuana. To date, none of these statutes provides workplace accommodations.

Kraft filed a motion to dismiss the claim under the Delaware Medical Marijuana Act. A motion to dismiss challenges a cause of action on legal grounds assuming that the allegations of the complaint are true. In this case, Kraft asserted that the Medical Marijuana Act claim failed because it is preempted by federal law: specifically, the Controlled Substances Act. Pursuant to the Supremacy Clause of the U.S. Constitution, federal laws override state laws. So Kraft argued that Delaware’s Medical Marijuana Act improperly authorized conduct that was prohibited by federal law, i.e., by authorizing the use of marijuana and requiring employers to accommodate that use. In rebuttal, Chance argued that Kraft’s analysis was overbroad and that the anti-discrimination provisions of the state statute do not violate federal law.

Federal law still prohibits the distribution and possession of marijuana, regardless of its use. Notwithstanding federal law, the Obama administration issued a memo directing federal prosecutors not to target adults who grow and use marijuana in compliance with state laws. Prosecutors, though, were encouraged to prevent marijuana sales to minors. Although the Trump administration rescinded the memo, states continue to pass laws legalizing marijuana use.

CHANCE V. KRAFT HEINZ FOODS COMPANY The conflicting laws between the federal and state governments, and the lack of uniformity in these laws, create potential traps for the unwary employer. The case of Chance v. Kraft Heinz Foods Company demonstrates this problem. Kraft Heinz Foods Company employed Jeremiah Chance as a yard equipment operator. Chance suffered from numerous medical problems including various back problems. Because of his health issues, he obtained a valid medical-marijuana card in 2016 pursuant to Delaware’s Medical Marijuana Act. He also took leaves of absence on several occasions under the Family and Medical Leave Act and used short-term disability benefits. As a yard equipment operator, Chance operated a shuttle wagon on the company’s railroad tracks. Chance derailed a shuttle wagon. Because of the incident and presumably pursuant to company policy, management requested that Chance take a drug test. The test was inconclusive which caused the company to request a second drug test. Three days after the first drug test, the second test was administered. Four days later, a company medical review officer informed Chance that he had tested positive for marijuana use. Chance advised the medical review officer that he was authorized to use medical marijuana pursuant to Delaware’s Medical Marijuana Act and provided the medical review officer with a copy of his state-issued card. Approximately ten days later, the company terminated Chance for failing the drug test. Thereafter, Chance filed a discrimination charge with the Delaware Department of Labor Office of Anti-Discrimination and with the federal Equal Employment Opportunity Commission. Both 16

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THE COURT’S ANALYSIS Federal law regulates the use and possession of drugs, including marijuana. These drugs are called “controlled substances.” The law states that it is unlawful to manufacture, distribute, dispense, or possess controlled substances except as provided by the Controlled Substances Act. Under the Controlled Substances Act, marijuana is a schedule 1 substance and the act does not allow any exceptions, not even for medical use. In contrast, the court acknowledged that the Delaware statute provides “for the distribution, possession, and use of marijuana for medical purposes.” The state act further prohibits an employer from discriminating against an employee in hiring, firing, or any other term or condition of employment who is a card-carrying user of medical marijuana or a card-carrying user of medical marijuana who tests positive for marijuana use. But if the employee possesses or uses marijuana or is impaired while on the employer’s premises or during the employee’s scheduled shift, the employer may discipline the employee. The court acknowledged that upon a cursory review the Delaware act appears to be in direct conflict with federal law. But the court reasoned that such a view is overbroad, because the only part of the statute at issue in the Chance case was the anti-discrimination provision. And the court was not called upon to review the statute as a whole. The court reasoned that in its preemption analysis, it need only consider the extent to which the state law contradicts federal law and that the court should not invalidate the state statute any more than necessary to resolve the pending case. So, the court limited its review of the Delaware act solely to the provision regarding employment discrimination.

The court further explained that although federal law does not authorize the medical use of marijuana, it does not prohibit the employment of marijuana users, and the federal statute does not attempt to regulate employment matters. The court thus concluded that the anti-discrimination provisions of Delaware’s Medical Marijuana Act are not in conflict with federal law and do not interfere with the goals of Congress. Therefore, the court denied Kraft’s motion to dismiss Chance’s discrimination claim. The case will proceed to discovery, allowing the parties to learn the facts and analyze the strengths and weaknesses of their positions, and ultimately to decide whether to file dispositive motions, settle the case, or proceed to trial.

PRACTICAL TIPS Notwithstanding the holding of the Chance case, employers should not immediately toss out their drug policies. 1. Know the Law Thirty-three states plus the District of Columbia have passed laws permitting medical marijuana use and, in some jurisdictions, recreational use. The laws are not uniform and, in some instances, like the Delaware act, give rise to employer liability for discriminating against card-carrying marijuana users. And in states like Tennessee, marijuana use is not authorized. Thus, employers must be aware of the laws governing marijuana use in the jurisdictions in which they have employees. And they must ensure that their policies do not violate those laws.

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2. Consider Focusing Your Policies on Impairment Even though the majority of states have passed medical marijuana laws, none of the laws prohibit an employer’s right to discipline an employee for being impaired while at work. Unlike alcohol, a positive drug test for marijuana does not necessarily mean that the employee was impaired at the time of the test. Evidence of marijuana use remains in the human body long after its effects have dissipated. So instead of having a policy that disciplines employees for a positive marijuana drug test, consider modifying your policy to discipline employees who are impaired while at work. A drug test confirming marijuana use should only be one factor in determining whether an employee is impaired. Employers should rely on common short-term symptoms of marijuana use as evidence of impairment: “panic, anxiety, poor muscle and limb coordination, delayed reaction times and abilities, an initial liveliness, increased heart rate, distorted senses, [and] red eyes.” https://americanaddictioncenters. org/marijuana-rehab/how-to-tell-if-someone-is-high. If an employee manifests common symptoms of marijuana use, then the employer may use a drug test to confirm the employee’s impairment. By being aware of the applicable medical marijuana laws and amending policies to focus on impairment, employers can avoid a new breed of discrimination claims.

L. Eric Ebbert, Member Wimberly Lawson Wright Daves & Jones, PLLC Knoxville, Tennessee office eebbert@wimberlylawson.com

Neemah Esmaeilpour neemah@wlj.com 501.212.1280

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BETTER WORKPLACES INCLUDE SECOND CHANCES:

The First Step Act and SHRM By JOHNNY C. TAYLOR, JR.

Every year, nearly 700,000 people leave prison to reintegrate into society, but most quickly run into roadblocks when looking for gainful employment. A year after release, 75 percent of them will remain unemployed.

The Next Step for Business: Take the Pledge

SHRM is a strong advocate for giving willing workers who made mistakes a second chance. Men and women with criminal histories are looking for opportunities to re-enter the workplace, contribute to their communities and earn an honest living. Studies show that having a job after incarceration reduces recidivism substantially, making communities safer. It’s also good for the economy, as nearly $87 billion in GDP is lost each year by excluding ex-offenders from the workforce.

It is up to us to persuade our organizations to take the next step: committing to consider qualified job seekers with criminal records. We must counter the stigma and fear around this talent pool with knowledge, tools, and resources.

People who have paid their debt to society, who want to work and who are qualified for the job should not be re-sentenced to joblessness. And it is shortsighted to exclude them from workplaces that have a tremendous need for workers—especially in a time when the U.S. is experiencing a serious skills shortage. Currently, there are about a million more open jobs than there are qualified applicants looking to fill them—and the skills gap isn’t going away any time soon. SHRM’s own research shows that hiring people with criminal records is an important strategy for employers struggling to meet their need for qualified talent. And it makes good business sense. • Three-quarters of managers and HR professionals say the cost of hiring workers with criminal records is the same as or lower than those without. • More than 80 percent of managers and two-thirds of HR professionals believe the value workers with criminal records bring to the organization is as high or higher than that of workers without records. • Those who hire the formerly incarcerated say they tend to be more loyal employees when it comes to retention. And there is not as much resistance from fellow workers as you might imagine. A majority of employees in all roles say they are willing to work with individuals with criminal records, and an additional 40 percent reported no opinion.

The First Step Act SHRM has met with Congressional and Administration leadership to offer solutions and engage in thoughtful discourse on how the private, public, and government sectors could work together to provide opportunities for more Americans with records and reduce recidivism rates. On December 21, 2018, the First Step Act was signed into law with SHRM’s support. This ground-breaking bill received broad, bipartisan backing, with advocates from the business, political and social justice spectrums coming together to reduce sentences for nonviolent offenders in federal prisons and improve programs to reduce recidivism by investing in workforce training and skills building. The First Step Act’s criminal justice reforms open new opportunities for job training, treatment and rehabilitation for the formerly incarcerated. These measures will help those with criminal records reintegrate into the workforce, while helping employers address our country’s critical skills gap by making it easier to hire individuals from this nontraditional applicant pool. Our government has made a clear commitment to give past offenders muchneeded workplace skills and training—a potential game changer for companies looking to hire viable candidates who are ready to do the job upon release. 18

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As HR professionals, we understand that the First Step Act really is the first step; our work has just begun.

This is why SHRM, in partnership with Koch Industries, has launched the Getting Talent Back to Work initiative and toolkit. Getting Talent Back to Work encourages employers to make their recruiting practices more inclusive by taking a pledge to give opportunities to qualified people with a criminal record deserving of a second chance. The toolkit equips employers to confidently evaluate applicants with criminal records by reducing uncertainty and promoting best practices, including when to ask about a criminal record during the hiring process, state and federal regulations, and what types of convictions to consider based on the job. Already, a diverse coalition of organizations—together representing more than half of the American workforce— have partnered with SHRM to take the pledge. They include the American Staffing Association, the National Restaurant Association, the National Retail Federation, the U.S. Chamber of Commerce, Koch Industries, Checkr, Dave’s Killer Bread and others. HR professionals can and must do a better job at creating second-chance employment opportunities for the formerly incarcerated. If we do, everyone wins: Employers acquire valuable employees, deserving people can turn their lives around and our communities are safer. We’ll have a chance to dig deeper into this and other issues that shape today’s workplaces this month at our Employment Law & Legislative Conference, March 18 - 20 in Washington, D.C. It’s a perfect opportunity to get an inside look at the current agendas of the presidential administration and Congress, as well as public policy issues that impact every American workforce. At our annual Capitol Hill Day on March 20, HR professionals have the opportunity to meet directly with their legislators to include our issues and experiences on the policy agenda. Hiring people with criminal histories is one important way that HR and our organizations can create better workplaces for a better world. Together, let’s pledge to extend jobs to people based on their merit, not their mistakes.

Johnny C. Taylor, Jr., SHRM-SCP President and CEO of SHRM, the Society for Human Resource Management

University of Illinois at Urbana-Champaign Master of Human Resources and Industrial Relations Complete your master’s degree in human resources online! Illinois’ accredited and internationally recognized master’s program is now tailored to the needs of working professionals. Students in our online MHRIR program earn their degree in two years, while continuing to work. Whether you have prior experience in human resources or you are transitioning from another function, you will find immediate connections from your courses to your work, grow to meet new challenges, pursue upper-level positions, and guide strategic decisions. Our experienced faculty and industry experts hold weekly virtual class sessions, where students’ professional experiences provide deeper entry into course topics. The MHRIR curriculum is designed to build business acumen and a strong foundation in human resources and labor relations. Annetta Allison, Human Resources Coordinator at Illinois Public Media, designed a change management plan to align her organization’s structure with a new strategic plan, “I used [the final project] as a tool to gain approval from our executive committee on how I would execute the reorganization. The Executive Director said that my preparation helped make their decision an easy one.” In each course, students are encouraged to apply their coursework to their careers. Students benefit from peer networking in selective cohorts – our students have an average of eight years of experience in HR and related

business functions. “When I heard that the program was being offered online, I was excited for the opportunity to experience the program virtually, expand my network of HR professionals … and enhance my knowledge of Labor and Employment Relations,” said Annette Gorzelany, online alumna who was promoted to Labor Relations Specialist at The Boeing Company. Each cohort includes a diverse and experienced group of working professionals from long-standing corporate partners like BP, PepsiCo, and Cargill, in addition to professionals in non-profit, consulting, and higher education institutions. Beyond the classroom, our students are building their professional networks and participating in an active community of practitioners. Program staff and faculty visit students across the nation, hosting networking events with our 3000+ alumni, which includes EVPs and CHROs at leading global organizations and Fortune 500 companies. These networking opportunities support professional advancement while in the program. Over 25% of our first cohort received new positions while in the program. We encourage prospective students to connect with us to evaluate their suitability for a GRE/GMAT waiver. Applications are accepted on a rolling basis. For more information, visit go.illinois.edu/LERonline or email Eden Haycraft, Associate Director, Graduate Online Programs.

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 Things HR Professionals

Need to Know About Choosing the Best Vendors By STEWART GOTT

It probably doesn’t keep us up every night, but our company vendors are extremely important. They make certain our processes run smoothly, our shelves stay stocked, and we have access to necessities like the internet, copiers, and phone systems. HR vendor partners are especially important. After all, what’s more critical to organizational success than their human capital? HR is typically in charge of vendors that include recruiting companies, job boards, Applicant Tracking Software (ATS) systems, background check companies, payroll services, and employee training vendors. This list isn’t exhaustive, but it shows that HR shoulders significant responsibility in choosing vendors that are reputable, dependable, and perform well. Toss in the hundred other projects HR handles and it’s easy to see why thoughtful consideration of every vendor can seem overwhelming. However, if HR makes the wrong vendor decisions, there may be costly and long-term consequences to the company. HR needs a plan to vet vendors efficiently and effectively. Here are 7 things HR professionals need to know about choosing the best vendors.

: First, don’t decide on price alone. It’s tempting to just go with the vendor that offers the cheapest price, but this sets you up for some undesirable results. They may not offer the training and support your team needs. If you and your staff spend tons of extra time on issues and obstacles, you are not saving money with the lower price. In addition, their products and services may not be as broad as you need and might even be inferior in quality. If the vendor deals with technology, they might not keep up with upgrades and advances that are essential to your department’s success. Yes, we all have budgets. Price, however, should be only ONE factor when deciding on a vendor. 20

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: Do your research.

: Review their compliance standards.

Going in blindly and choosing the first vendor you speak with sets you up to make the wrong decision. Set aside some time and figure out who the main players are and check out their websites. Look at their size and the products they offer. Do they integrate with systems and processes you already use? Do they offer training? Is there evidence they currently work with companies like yours?

HR must maintain a close watch on vendor compliance. After all, a company’s information is only as secure as its vendors’. Ask for written documentation of how they handle compliance standards. How are their staff trained to handle data? Where is their client information stored? Shoddy compliance practices should point you away from that vendor.

By understanding your vendor options, you will have a better chance of reaching the best decision for your organization.

: Engage with their references.

When you narrow down a list of “finalists” you need to speak with a vendor representative and…

: Ask the right questions. Dig for in-depth information that aids in making the wisest choice. Find out if the vendor offers scalability. For example, if your company opens new branches, will they be able to train and support them? Also, have them explain how their service team supports their clients. Request they tell you about other companies like yours, how long they’ve worked with them, and how they meet their needs. Make sure you understand their total pricing package and any extras that aren’t automatically included. Finally, and maybe most importantly, find out how their team is trained, their qualifications, and how they audit their finished product.

: Measure their knowledge. Don’t set yourself up for unanswered emails and vague explanations. If the representative fails to be communicative, helpful, and forthcoming during the decision process, how can you expect any better treatment after you become their client? Pay close attention to how they answer your questions, and the amount of time it takes them to get back to you with any follow up information.

Once you determine your top choices…

We all know a polished salesperson can talk a good game. That shouldn’t be all you hear about the company. Ask to speak to two or more of their clients, preferably in a related industry and of a comparable size, and conduct a conversation about their satisfaction. Ask how the vendor solves problems, get them to walk you through their communication strategy, and find out how long they have been clients of the vendor. Pose the question of what they could do better.

: Finally, compare and decide. Now that you’re armed with considerable intel about more than one vendor, review the results and compare them to what you expect from your vendor partners. Base your decision on the sum total of the data you’ve gathered, and make your final decision. It may take a bit more time to vet HR vendors this way, but it’s well worth the extra attention to set up a vendor that will be a strong and productive partner. Making the best vendor decisions is key to keeping HR functioning efficiently and serving the company to the best of its ability.

Stewart Gott National Account Manager sgott@datafacts.com www.datafacts.com

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PEOPLE PLANS The Key Variable to Strategic Planning By AUSTIN BAKER

According to a survey by 6 Disciplines, 95% of employees do not understand their organization's strategy while 44% rank aligning the implementation of strategy to people & company culture as the toughest challenge. Strategic plans highlight strengths, weaknesses, threats, and update us on our goals, however, the implementation of those plans will never suffice unless there is a solid People plan in place to build out those initiatives. Without clarity around the strategy of the organization, creating a “plan for people” and defining the role of talent management is not only difficult, it’s impossible. Long gone are the days when the Human Resources department focused solely on recruiting employees. HR has become an invaluable resource itself, working hand in hand with top-level management to create a cohesive, organization-wide strategy. The strategic importance of HR cannot be underestimated. Its role as the liaison between employees and the organization is a vital one, especially given the highly competitive nature of the workplace today. Your people plan must serve the overall strategy of the organization. If it isn’t absolutely clear about what the strategy MEANS in terms of people, skills and competencies required, confusion and dysfunction will spread to talent management and every other function in the organization. There is no such thing as “good” alignment or “close” alignment. It either exists or it doesn’t and therefore the due diligence that must be applied to the process must be extremely disciplined and precise. Close enough isn’t good enough. We listed a few tips to make sure you have the alignments necessary to achieve your strategic goals in 2019.

People Objectives Need to Be Clearly Defined First, the strategic game plan of the organization must contain a specific people plan with “people objectives” that define what talent is required to effectively execute the strategic plan. For this, goal planning sessions are critical for the people to begin developing necessary key performance indicators (KPI’s) to align and measure performance ROI towards that goal. The people plan must be developed with sufficient granularity to answer these questions: • What new competencies are required to achieve the new strategic goals defined in the game plan? • What does the training and recruitment plan look like to acquire these new competencies? (The timing of these actions must precisely parallel the strategy’s need for the new skills critical to deliver results within a specific timeframe.) • What existing competencies are no longer required? 22

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• What training is needed to equip these people with the new skills required? • What is the exit plan to move people out of the organization who are either incapable or unwilling to acquire the new expertise? • How do the elements of the people plan line up with strategic objectives? To get alignment, you have to demonstrate precisely how the outcome of each people plan element serves a corresponding component of the business strategy. For example, which critical objectives of the business are satisfied by which of the new skills targeted to acquire? You need to be able to “see” the link directly, otherwise you can’t claim there is alignment.

Strategic Goals Need to Be Communicated and Translated Across All Levels of Management According to a study by the Harvard Business Review, 42% of managers and 27% of employees get access to the strategic plan. As these trickle down, it results in 95% of employees not understanding their organization's strategy. With the communication gap effacing the alignment between the upper, middle, and base levels of organizations, objectives, perceived vision, goals, and initiatives will become unclear - thus resulting in a deviation from the original plan designed. A recent Harris Poll survey of CEOs and HR executives revealed that CEOs think their HR executives are spending their time on training and development, diversity and inclusion, and running employee programs. While in reality, HR executives report that they are spending their time on compensation and benefits, employee relations, recruiting, and onboarding. CEOs in the survey said that they would like HR leaders to spend more time on talent management, employee rewards and compensation and less time on employee brand, internal communication, and HRIS. In your quest to be more strategic, be sure you are clear about what is most important to your senior leadership. Then you can ensure that your priorities are aligned and resources are being used to the best advantage.

Engagement and People Development Should Be Integral Parts of Any Strategic Plan Research continues to support a strong relationship between employee engagement and the effectiveness of a strategic plan. When we inform people by clearly communicating the company’s destination, they develop a sense of direction and focus. When we inspire people by explaining why the destination is important, they develop the motivation and determination to see the race through. When we engage them in reaching that destination, they become more willing to make decisions, take appropriate risks and act in the best interests of the organization. Some steps to make sure you engage your employees throughout the implementation of a strategic plan include: • Clearly define what “winning” looks like • Measure what matters AND show the importance of their roles in achieving those goals • Provide clarity on what they are expected to produce/accomplish • Give plenty of feedback and recognition & build an atmosphere of trust

Looking ahead If the most important factor affecting the viability of an organization is the people who are the very embodiment of the organization, meaningful strategic HR planning must become an organization wide priority to address the myriad issues associated with any workforce. As HR professionals are uniquely aware, the topics and issues identified in this article are only the tip of the iceberg.

Austin Baker, President HRO-Partners

Austin Baker is the President of HRO Partners, a human resources consulting and benefit administration and enrollment firm as well as a National Enrollment Partner Member representing the largest boutique, full service insurance and enrollment firms in the country. A veteran of more than 16 years in the human resources and insurance & benefits industry, Baker is responsible for managing a multifaceted human resources consulting company with public workforce programs and services focused on companies in the southeastern United States. Austin is a frequent speaker on a variety of leadership and benefit topics representing thought leadership and innovative practices in the HR industry. For more information, call Baker at 1-866-822-0123, visit www.hro-partners.com or connect with the company at www.facebook.com/hropartners, www.linkedin. com/in/jaustinbaker or twitter.com/jaustinbaker. hro-partners.com company/hro-partners

hropartners @hropartners

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Seventh Circuit Holds Disparate Impact Age Claims Not Applicable to External Job Applicants By RUSSEL W. JACKSON

In Kleber v. CareFusion Corp. (7th Cir. Jan. 23, 2019) (en banc), a divided Seventh Circuit Court of Appeals held outside job applicants cannot bring disparate impact claims for age discrimination under the Age Discrimination in Employment Act (“ADEA”). Disparate impact claims are those brought against employers who have implemented policies or practices appearing neutral on their face, but disproportionately impacting a protected group. A common disparate impact allegation is testing that effectively screens out a minority group from the hiring process. Disparate treatment claims, on the other hand, allege intentional discrimination based on protected status. Factual and Procedural Background In March 2014, Dale Kleber applied for a senior in-house attorney position in CareFusion Corporation’s legal department. The job description for the position required “3 to 7 years (no more than 7 years) of relevant legal experience.” Kleber was 58 years old and had more than the seven years of pertinent experience. Kleber did not receive an offer, and CareFusion hired a 29-year-old who had the requisite experience, but did not exceed it. Kleber filed suit pursuing ADEA claims for both disparate treatment and disparate impact. The district court granted CareFusion’s motion to dismiss, reasoning the text of the ADEA’s disparate impact language did not extend to outside job applicants. Kleber voluntarily dismissed his disparate treatment claim and appealed the disparate impact ruling. Majority Relies On Plain Language On appeal, the Seventh Circuit majority began its analysis with the text of the disparate impact statute, which states it is unlawful: to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age; 29 U.S.C. § 623(a)(2). Relying on the plain language, the court determined that the “requisite impact must befall an individual with ‘status as an employee.’” The court ruled that the reach of the statute does not extend to applicants because common dictionary definitions confirm an outside applicant has no status as an employee. Kleber argued the language in the middle of the statute – “deprive or tend to deprive any individual of employment opportunities” – indicated that Congress intended to cover “any individual,” including outside job applicants. The majority rejected this argument, noting the language only covers “any individual” deprived of an employment opportunity because the conduct “adversely affects his status as an employee.”

is no dispute that the disparate treatment provision covers outside job applicants. The court reasoned that Congress’s inclusion of such language in the disparate treatment provision and its apparent deliberate omission of similar language from the disparate impact provision was an indication that Congress intended a difference in the statutes. The Seventh Circuit also reviewed § 4(c)(2), which prohibits labor organizations from engaging in age discriminatory practices. The language of the labor organization statute provides it is illegal “to limit, segregate, or classify its membership, or to classify or fail or refuse to refer for employment any individual, in any way which would deprive or tend to deprive any individual of employment opportunities, or would limit such employment opportunities or otherwise adversely affect his status as an employee or as an applicant for employment, because of such individual’s age…” 29 U.S.C. § 623(c)(2) (emphasis added.) The court also analyzed the ADEA’s retaliation statute, making it unlawful to “discriminate against any of his employees or applicants for employment.” 29 U.S.C. § 623(d) (emphasis added.) The majority noted these three provisions differentiate between employees and applicants. By including references to applicants, the court held it is implausible that the court meant to use the term “employee” in the disparate impact statute to cover employees as well as outside job applicants. Griggs v. Duke Power Kleber attempted to rely on a 1971 Supreme Court decision, Griggs v. Duke Power Co., 401 U.S. 424 (1971), to contend disparate impact for outside applicants was viable. In Griggs, African-American employees challenged Duke Power’s practice of conditioning job transfers and promotions on high school graduation and standardized tests. The Griggs plaintiffs sued under a Title VII disparate impact theory. At that time, Title VII mirrored the ADEA’s current disparate impact provision. The Griggs Court found that Title VII’s language prohibited disparate impact discrimination by proscribing “practices that are fair in form, but discriminatory in operation.” The Kleber court declined the opportunity to read Griggs for the proposition that outside job applicants can pursue disparate impact claims because nowhere in Griggs did the Court hold that its decision extended to applicants. The majority found it significant that the claims in Griggs were brought by current employees – not outside job applicants. Title VII’s 1972 Amendment and Gross v. FBL Financial Servs., Inc.

Comparison To Other ADEA Provisions

The Kleber majority also reasoned that the Court’s 1972 amendment to Title VII’s disparate impact provision – at issue in Griggs the prior year – further cemented the court’s position. The amendment added language to Title VII’s disparate impact provision to expressly cover “applicants for employment.” The majority concluded that if Title VII’s previous disparate impact language, which mirrored the ADEA’s, already covered applicants, there would have been no need for the amendment.

The court compared the disparate impact statute to the ADEA’s disparate treatment provision, which makes it unlawful for an employer “to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual … because of such individual’s age…” 29 U.S.C. § 623(a) (1). Based on the “fail or refuse to hire” verbiage, the court concluded there

The Seventh Circuit also used the Gross v. FBL Financial Servs., Inc., 557 U.S. 167 (2009), decision to further its conclusion. In Gross, the Supreme Court held that under the ADEA, plaintiffs must establish that age was the but-for cause of an adverse employment action. This is a different standard than that for Title VII claims, which only requires that race be a motivating

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factor. The Kleber court determined that paramount to the Gross decision were obvious textual differences between the ADEA and Title VII brought about by Congress’s Title VII amendments. The court found instructive that the Supreme Court held that prior decisions interpreting Title VII do not control the construction of the ADEA, where the texts of the provisions are “materially different.” As a result, Congress’s decision to add “applicants” in Title VII, but not to amend the ADEA was meaningful. The majority found that its holding gave effect to the plain limits embodied in the ADEA’s disparate impact statute. The court also noted that Congress remains free to extend disparate impact ADEA coverage to outside job applicants, as it did with Title VII. Dissenting Opinion The dissent criticized the majority decision’s reliance entirely on their reading of the statute’s text. The dissent determined “any individual” in the statute would clearly reach job applicants and that “otherwise adversely affect his status as an employee” does not limit the scope, but, instead, is a catch-all for unknown situations. The dissent also opined “status as an employee” could include when an individual is denied an opportunity to become an employee. The dissent was highly critical of the majority’s interpretation of Griggs. The dissenting judges noted Griggs was a class action that “beyond reasonable dispute” included job applicants. The class definition in Griggs specifically included anyone “who may hereafter seek employment.” The dissent also reviewed subsequent Supreme Court decisions, which all read Griggs as governing hiring practices.

of “applicants for employment,” the dissent contended, was only a minor change to Title VII mentioned briefly and simply incorporating existing law. The dissent determined the amendment did not extend Title VII, and that there is no foundation for inferring the amendment was a silent endorsement of a narrow interpretation in the ADEA’s identical language. The dissent also reviewed the legislative history and found that Congress enacted the ADEA to address employment practices making it difficult for older individuals to find jobs. The dissent pointed to the Department of Labor’s Wirtz Report, the catalyst for the ADEA, and found the report had job applicants in mind. The dissent determined that “[a] central goal – arguably the most central goal – of the [ADEA] was to prevent age discrimination in hiring.” Conclusion The Kleber decision is a helpful decision for those employers facing age-related disparate impact claims by outside job applicants, but companies should remember it applies solely to disparate impact claims of age discrimination arising under the ADEA. Employers should be aware that disparate treatment claims remain viable under the ADEA. Companies may also want to consult legal counsel if there are questions as to whether their hiring or other personnel policies could adversely affect certain groups – particularly those individuals still afforded protection under Title VII, including race, color, sex, religion, and national origin discrimination.

The dissent pointed to Title VII’s 1972 amendment as further support for its position, noting the majority “overlooked the long-recognized difference between substantive and clarifying statutory amendments.” The addition

Russell W. Jackson, Partner FordHarrison Memphis rjackson@fordharrison.com www.fordharrison.com

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Top Health and Welfare Considerations in an M&A Deal

hat would happen if you arrived for work on Monday to find that your company is contemplating acquiring (or selling to) another company? Do you feel confident in your ability to guide your colleagues through the employee benefits aspects of the transaction? The acquisition process is fraught with traps for the unwary, especially when it comes to employee benefits. This article discusses some of the key considerations. It focuses on welfare benefits although many of the overall concepts apply equally in the retirement plan context. Is This a Stock or Asset Deal or a Merger? This is one of the first and most important questions to ask about a proposed transaction because the legal form of the transaction will determine many of the benefits issues. This includes whether the benefit plans of the entity being acquired, which we refer to here as the “target,” are usually continued post-closing or terminated in advance of closing, what happens with target employees, and the like. In a stock purchase, the buyer automatically becomes the sponsor of any plans not terminated by the target prior to closing. The buyer steps into the target’s shoes from a liability perspective so it needs to be very clear on compliance obligations and potential liability associated with these plans. Employees of the target business who continue will work for the same employer post-sale. Contrast this with an asset purchase where the employees associated with the purchased assets who continue post-sale will have a termination of employment. The termination of employment has implications for various employee benefits plans. For group health plans in particular, COBRA liability and responsibility are a key concern. What Benefits Does the Target Offer? The buyer will want to know about the target’s plans to assess potential liability. This is why the parties engage in the “due diligence process” where they ask each other to provide information on offerings and associated compliance risks. The transaction form determines how much importance the parties will place on past compliance. For example, past compliance is much more important in a stock or asset deal where the buyer will continue target plans post-closing versus in a stock deal where the target terminates all plans pre-closing or an asset deal where the buyer does not assume/continue any plans (and is not a successor). The due diligence process also helps assess possible next steps for maintaining separate plans for acquired target employees or integrating their benefits with the buyer’s plans. Retiree medical, for example, can pose very significant challenges, both from a cost and a compliance perspective. Union plans also present their own unique set of considerations that are better addressed early in negotiations with the benefit of experienced counsel. In addition, to the extent the target offers a health FSA, DCAP or other “use-itor-lose-it” account-based plan and the transaction will close mid-plan year, the parties must determine how/whether the account balances will transfer to a plan at the buyer, stay at the target, etc. What Does the Purchase Agreement Provide? The purchase agreement often speaks to the parties’ intentions so it is vital to consult that agreement when discussing how to handle benefits on a going forward basis. For example, the purchase agreement may require the buyer provide past service credit for plan eligibility and credit toward deductibles or out-ofpocket maximums. It may also cover whether the buyer is required to offer certain benefits to all employees and/or particular benefits to executives. 26

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By STACEY STEWART

Keep in mind that the purchase agreement may provide for employment or severance agreements for executives and these agreements may separately require the buyer to provide certain benefits to these executives (e.g., retiree health insurance, subsidized COBRA coverage). You also want to know what the purchase agreement may say about COBRA obligations. It can, in some cases, shift COBRA liability away from the party otherwise legally required to shoulder it. It is important to understand the amount of expected COBRA liability and who will bear it. Equally important is whether this liability can and will shift from one party to the other. Is the Post-Sale Benefit Plan Strategy Viable? The parties must assess the viability of the proposed strategy from both a practical and a compliance standpoint. For example, if the buyer wants to keep acquired target employees in their current group health plan after an asset deal, it generally will need to assume the plan or set up a mirror plan. Allowing these employees to stay on target’s plan post-closing creates a Multiple Employer Welfare Association (MEWA), which triggers additional compliance obligations. Benefits counsel may devise a creative approach to make this work (e.g., treat former employees as retiree class) or rely on an alternate theory to not treat temporary coverage as a MEWA. But the bottom line is that the buyer must evaluate the strategy on the front-end with counsel and be comfortable with any associated risk. They also must coordinate with applicable service providers to ensure they can accomplish the strategy in a timely fashion. Do You Have All Information Needed to Understand/Comply with ACA Obligations? The ACA added a host of considerations in M&A transactions including the impact of applicable large employer (ALE) status and potential liability for ACA-related penalties (e.g., employer mandate penalties for ALE members, PCORI fees etc.). Determining when the employer mandate and associated reporting rules apply (or cease to apply) is key. When an ALE buyer acquires a non-ALE member (or becomes an ALE due to the proposed transaction) statutory language indicates that the employer mandate may apply immediately. So the buyer may have an immediate need to provide affordable, minimum value coverage to all full-time employees including acquired target employees and to satisfy ACA Form 1094/5-C reporting. Buyer must obtain hours of service and other relevant pre-transaction data from target to determine who is a full-time employee so it can make the necessary coverage offer (or understand potential penalties for failure to do so) and fulfill ACA reporting obligations. Also, the parties may use different measurement methods requiring the buyer sort through how to treat acquired employees post-closing under applicable IRS guidance. The above discussion gives you a taste of the potential health and welfare issues that may arise in an M&A deal. The earlier you learn about a deal the better. Proper planning is key to avoid potential missteps both before and after the transaction.

Stacey Stewart, JD | Senior Advisor McGriff Insurance Services stacey.stewart@mcgriffinsurance..com www.mcgriffinsurance.com

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Labor and Employment Law

Rising Stars We are proud to present the 2019 Rising Stars in Labor and Employment Law submitted by our sponsors. These attorneys are 40 or under and have practiced law 10 years or less. They are already top performers in their respective firms.

Ogletree Deakins Ogletree Deakins is one of the largest labor and employment law firms representing management in all types of employment-related legal matters. Premier client service, as outlined in the firm’s Client Pledge, is one of the firm’s top priorities and a cornerstone of its core values. U.S. News – Best Lawyers® “Best Law Firms” has named Ogletree Deakins a “Law Firm of the Year” for seven consecutive years. In 2018, the publication named Ogletree Deakins its “Law Firm of the Year” in the Litigation - Labor & Employment category. Ogletree Deakins has more than 850 attorneys located in 52 offices across the United States and in Europe, Canada, and Mexico. The firm represents a diverse range of clients, from small businesses to Fortune 50 companies. www.ogletree.com

Josh C. Harrison

Audrey M. Calkins

Michael Oliver Eckard

BIRMINGHAM OFFICE

MEMPHIS OFFICE

ATLANTA OFFICE

Josh represents employers in all aspects of employment and labor law. An experienced litigator, he has obtained summary judgment for clients in federal employment lawsuits in a number of jurisdictions and has successfully handled appeals before the United States Courts of Appeals for the Fifth, Tenth and Eleventh Circuits and the Supreme Court of the United States. Josh also frequently advises clients regarding wage and hour compliance issues, accommodation and leave issues, and non-competition agreements.

Michael represents companies in labor, employment, restrictive covenant, and wage and hour matters in the health care, manufacturing, chemicals, hospitality, transportation and logistics, and retail industries, among others. He regularly advises companies on human resources and labor policy issues. Michael represents his clients in many types of employment litigation matters, including wrongful termination claims, sexual harassment claims, employment discrimination claims, employment contracts, wage and hour claims, trade secrets, and non-compete agreements.

M. Tae Phillips

Ana Dowell

Jana L. Korhonen

BIRMINGHAM OFFICE

ATLANTA OFFICE

Tae focuses his practice on assisting clients with the many labor and employment challenges they face on a daily basis. A significant portion of Tae’s practice consists of employment litigation, and he also assists employers in traditional labor matters such as union avoidance, election campaigns, collective bargaining, and labor arbitrations. Tae is heavily involved in Ogletree Deakins’ Drug Testing Practice Group, where he advises clients on all aspects of drug and alcohol testing. 28

Audrey represents employers in a full range of labor and employment matters, including cases involving wage and hour claims, Title VII, ADEA, FMLA, ADA, and comparable state statutes. She also has intellectual property experience that she uses to assist clients with matters involving non-competition, trade secret, and non-solicitation disputes. Audrey regularly leads onsite training for supervisors, management, and employees regarding compliance with employment laws.

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She represents employers in a variety of employment law matters, including alleged violations of Title VII, ADA, FMLA, and FLSA. She also has experience in drafting responsive pleadings, motions to dismiss, and other dispositive motions. Aside from litigation, Ana regularly counsels companies on employment law compliance, including drafting employee handbooks and separation agreements. Ana has represented and defended clients in government investigations brought by the Department of Justice and HUD.

Jana represents employers of all sizes in employment law, including employment litigation and counseling. She regularly counsels and trains clients on employment-related matters, including terminations and reductions in force, employee discipline, internal investigations, leaves of absence, workplace accommodations, wage and hour compliance, change management, pay equity and other employment issues. Jana has experience representing clients in federal and state courts, in mediations and arbitrations, and before administrative agencies.

Bonnie Puckett

Deepa Subramanian

ATLANTA OFFICE

Bonnie leads the firm’s Asia-Pacific practice, advising on all types of cross-border and global employment matters within the Asia region and worldwide. Some of her major work includes preparing contracts, handbooks, and corporate policies designed for worldwide as well as country-specific use. Bonnie develops business-practical solutions for employers confronting various international challenges from onboarding, to compensation structure, to performance management, to transactional diligence and post-transaction workforce integration, to reductions in force.

Deepa represents employers in all aspects of employment law, including employment litigation and counseling. She advises and defends clients in federal and state employment-related lawsuits, including actions alleging discrimination, harassment, retaliation, violations of wage and hour law, and breach of contract. In addition, she provides advice to employers concerning litigation avoidance, leaves of absence, employee discipline, hiring and termination issues, reductions in force, and other personnel matters.

Wright Lindsey Jennings Wright Lindsey Jennings' Labor and Employment team has management-oriented practices addressing all aspects of the employee/employer relationship. The team has extensive experience litigating and arbitrating employment and civil rights claims, in addition to state law claims. Our attorneys defend clients in multi-plaintiff, collective action and class action lawsuits, as well as Department of Labor and EEOC investigations. WLJ's team provides advice and counsel to clients regarding a variety of day-to-day matters and represents clients in labor arbitrations, union elections and contract negotiations. We offer proactive and preventive resources for HR professionals, including employee and manager training, e-newsletters, employment law luncheons and webinars, and website articles.

Neemah Esmaeilpour LITTLE ROCK OFFICE

Neemah Esmaeilpour is a member of the firm’s labor and employment team, whose Little Rock-based practice focuses on employment-based immigration and employment law. He represents employers and professionals in a variety of matters, including visa petitions, labor certifications, discrimination claims, minimum wage and overtime issues, employee leave, employment contracts, covenants not to compete, unemployment claims and EEOC/DOL/ICE investigations. Mid-South Super Lawyers has recognized him as “Rising Star” since 2016 in labor and employment law, and he was voted one of the 100 “Best Lawyers in Little Rock” by the readers of Soirée Magazine and Arkansas Business in 2017. He is a graduate of Leadership Greater Little Rock, Class XXXIII.

Bass Berry Sims Bass, Berry & Sims advises clients on labor and employment matters from a perspective that connects our clients’ dynamic labor and human resources needs with affirmative strategies. We partner with clients to provide creative, innovative and practical solutions to business problems that have legal ramifications.

Mary Leigh Pirtle NASHVILLE OFFICE

Mary Leigh helps human resources professionals and in-house counsel at companies of all sizes navigate complicated and evolving employment law issues. She defends employers in matters of labor & employment litigation in federal and state courts, including complaints related to non-compete/ non-solicitation agreements, reductions in force, wrongful discharge, discrimination and civil rights, and wage and hour compliance. www.HRProfessionalsMagazine.com

FordHarrison FordHarrison is a labor & employment defense law firm with 28 offices, including three affiliate firms, and is the sole member of the global employment law firm alliance, Ius Laboris. The firm has built a national legal practice as one of the nation’s leading defense firms with an exclusive focus on labor law, employment law, litigation, business immigration, employee benefits and executive compensation. FordHarrison is committed to our FH Promise, a set of principles that guides our firm in the delivery of legal services and client communications. For more information on FordHarrison, visit fordharrison.com. To learn more about Ius Laboris, visit iuslaboris.com.

Frank L. Day, Jr., Partner

Henry F. Warnock, Partner

MEMPHIS OFFICE

ATLANTA OFFICE

Frank Day devotes his practice to helping clients accomplish business objectives through employment law litigation and counseling. Frank has successfully represented national retailers, health care providers, and various other public and private employers in matters arising under Title VII, the ADA, FMLA, ADEA, USERRA, and various other federal and state statutes. He has extensive litigation experience in many different forums, and he has helped many clients prevail on summary judgment and at trial. Frank frequently serves as a faculty member at employment law seminars, and he has published articles in the ABA Employment Law Newsletter, the Tennessee Bar Journal, and the University of Memphis Law Review. He earned his J.D. from the University of Memphis School of Law.

Russell W. Jackson, Partner MEMPHIS OFFICE

Russell Jackson represents management in employmentrelated matters on federal, state, and local levels. His representation includes claims relating to discrimination, harassment, retaliation, wrongful discharge, restrictive covenants, wage and hour violations, unemployment compensation, and other aspects of the employee-employer relationship under Title VII, ADA, ADEA, FMLA, FLSA, NLRA and the OSH Act. He has successfully defended clients in federal and state courts against claims of race discrimination, race harassment, sex discrimination, sexual harassment, disability discrimination, age discrimination, national origin discrimination, retaliation as well as various state law claims. Russell earned his J.D. from Case Western Reserve University.

Patrick L. Ryan, Partner

Henry Warnock devotes his practice to employment litigation and traditional labor law, with a particular focus on the healthcare and technology industries. He defends employers in discrimination and retaliation cases involving the FLSA, FMLA, ADA, and Title VII. Henry also guides clients through all facets of traditional labor law, including collective bargaining negotiations, unfair labor practice cases before the NLRB, union organizing campaigns, arbitration, and picketing. Henry has practiced in federal and state court, and represented employers in administrative actions with the NLRB, EEOC, DOL, and various state agencies. Henry earned his J.D. from the University of Georgia School of Law.

Jessica Lynn Asbridge, Counsel ATLANTA OFFICE

Jessica Asbridge focuses her practice on the representation of management in both traditional labor and employment matters. She defends employers in relation to discrimination, harassment, retaliation and wrongful termination actions in the federal and state courts and before administrative agencies. In addition, Jessica counsels employers on a variety of issues, including employee terminations, how to avoid/resolve labor and employment disputes and litigation, and Title VII, FMLA, FLSA, and ADA compliance. Jessica has assisted airline clients in grievance resolution matters, including grievance arbitrations, and has represented management in union representation matters before the NMB. Jessica earned her J.D. from Indiana University, Maurer School of Law.

Loren C. Locke, Counsel ATLANTA OFFICE

Loren Locke focuses her practice on the representation of employers and employees in issues related to business immigration. She works directly with foreign nationals and their employers to help obtain a variety of nonimmigrant and immigrant visas and achieve lawful permanent residence in the United States. Loren also advises on consular practice and responds to Requests for Evidence and Notices of Intent to Deny or Revoke. She assists clients in the full cycle of PERM including developing labor certification application case strategy, responding to audits, and requesting reconsideration in case of denial. Loren earned her J.D. from William & Mary School of Law.

ATLANTA OFFICE

Pat Ryan is a member of FordHarrison’s wage and hour practice group and concentrates his practice on class action litigation, arbitration, counseling, and government investigations. He has extensive experience in handling litigation brought under the FLSA and state wage and hour laws and regulations. Pat represents employers in wage and hour investigations brought by the DOL including conducting internal investigations, defending “on-site” visits, and advising clients on effective resolution. He has conducted numerous wage and hour audits, including exemption, independent contractor, pay practice and time keeping reviews, for clients in various industries. Pat earned his J.D. from the University of Georgia School of Law. 30

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Patrick H. Ouzts, Counsel ATLANTA OFFICE

Patrick Ouzts is a member of FordHarrison’s airline practice group and he focuses his practice on helping human resource leaders and in-house lawyers with employmentrelated issues, including employee discipline and discharge, accommodations and leave, allegations of discrimination, harassment, and retaliation, and policy review. As a litigator, Patrick represents employers in matters ranging from class actions to single plaintiffs to administrative hearings in federal and state courts. Patrick has also facilitated dozens of trainings for employers on how to practically implement laws in the workplace. Patrick earned his J.D. from Georgia State University College of Law.

P. Maxwell “Max” Smith, Counsel NASHVILLE OFFICE

Katherine S. O’Shea, Senior Associate ATLANTA OFFICE

Max Smith’s legal practice is devoted to the representation of management in employment law matters including litigation and day-do-day counsel. Max represents companies spanning a broad array of industries including healthcare, financial services, and manufacturing, and has helped his clients successfully resolve both litigation and charges before federal and state courts and administrative agencies. He has handled federal employment law claims on behalf of clients including alleged violations of Title VII, the ADA/ ADAAA, ADEA, FMLA, and FLSA. He has also represented clients in charges of violations of the Tennessee Human Rights Act, the Tennessee Disability Act and the Tennessee Public Protection Act. Max earned his J.D. from the University of Alabama School of Law.

Katie O’Shea concentrates her practice on representing management in claims involving harassment and discrimination in the workplace, retaliation, and violations of federal and state employment law statutes. During law school, Katie served as a Notes Editor of the Georgia Law Review, President of the Dean’s Ambassadors, secretary of the Women Law Students Association, and co-founder and treasurer of the Law Literary Society. Katie was a national finalist in the GRAMMY Foundation Entertainment Law Initiative legal writing competition. Katie earned her J.D. from the University of Georgia School of Law.

Garrett P. Buttrey, Associate Destiny S. Washington, Counsel ATLANTA OFFICE

Destiny Washington has an extensive background representing clients in state and federal courts and before administrative agencies. She has advised clients in all manner of employment law disputes including claims of discrimination, harassment, retaliation, and wage and hour violations. She also has experience in labor relations, counseling clients on the legal issues related to union campaigns, collective bargaining, and arbitrations. Destiny serves as a CoEditor for the Georgia Employment Law Letter, a Georgia Co-Editor for the 50 Employment Laws in 50 States publication, and is a contributing author for FordHarrison’s EntertainHR blog. She is a veteran of both the U.S. Army and the Louisiana Army National Guard. Destiny earned her J.D. from Tulane University Law School.

NASHVILLE OFFICE

Garrett Buttrey concentrates his legal practice on the defense and counsel of management in labor and employment law matters. Prior to joining FordHarrison, Garrett served as a legal intern and analyst for the HR Policy Association where he researched and drafted memoranda on labor and employment issues related to the NLRB, EEOC, and DOL. He also drafted amicus briefs on behalf of member companies to various federal U.S. Courts of Appeal regarding NLRB decisions on the certification of micro-units, employee use of employer-provided email systems, and the Board’s evolving definition of a “joint employer.” Garrett earned his J.D. from George Mason University.

Kristina Griffin, Associate ATLANTA OFFICE

David R. Anderson, Senior Associate ATLANTA OFFICE

David Anderson counsels and represents employers on discrimination and retaliation claims under the FLSA, FMLA, ADA, and Title VII and regularly advises clients on compliant background check policies under the FCRA and applicable state law. He provides guidance to clients on various business litigation matters including the enforcement of noncompetition agreements and claims for misappropriation of trade secrets, false advertising, breach of contract, and breach of fiduciary duty. David has practiced in state court and represented employers in administrative actions with the EEOC and DOL. David earned his J.D. from Emory University School of Law.

Chelsey M. Lewis, Senior Associate

Kristina Griffin focuses her practice on representing employers in labor and employment disputes and providing guidance regarding compliance with federal and state employment laws. She handles litigation arising from claims of discrimination under Title VII, the FMLA, the ADA, and GINA, as well as claims related to wrongful termination, harassment, and pay under the FLSA. Additionally, Kristina counsels employers on workplace issues including noncompetition agreements, the protection of trade secrets, personnel policies, leaves of absence, and disability accommodations. Kristina earned her J.D. from the University of Georgia School of Law.

Courtney E. Majors, Associate ATLANTA OFFICE

ATLANTA OFFICE

Chelsey Lewis advises and represents employers on a wide range of labor and employment matters including discrimination and retaliation claims under Title VII, the FMLA, ADA, and the FLSA. She has experience negotiating and drafting employment and separation agreements, as well as drafting and enforcing restrictive covenants including non-competition and non-solicitation provisions. Chelsey assists employers with workplace investigations, and provides counseling on various topics including discharge and discipline, accommodation requirements, employee handbooks and employment agreements. Chelsey has practiced in state court and represented employers in administrative actions with the EEOC and DOL. Chelsey received her J.D. from the University of Georgia School of Law.

Courtney Majors has experience representing and advising employers in litigation and various legal matters arising in the workplace. She is skilled in drafting settlement agreements, employee separation agreements, EEOC position statements, and employee handbook provisions. She has conducted extensive legal research and drafted memoranda on substantive and procedural issues pertaining to claims arising under Title VII, the FLSA, the ADA, the Equal Pay Act, and the FMLA. Courtney has additional experience advising employers in matters pertaining to collective bargaining agreements and union campaigns and elections. Additionally, Courtney has worked in-house for a major U.S. airline. Courtney earned her J.D. from Emory University School of Law. www.HRProfessionalsMagazine.com

Littler At Littler, we understand that workplace issues can’t wait. With access to more than 1,500 employment attorneys in over 80 offices around the world, our clients don’t have to. We aim to go beyond best practices, creating solutions that help clients navigate a complex business world. What’s distinct about our approach? With deep experience and resources that are local, everywhere, we are fully focused on your business. With a diverse team of the brightest minds, we foster a culture that celebrates original thinking. And with powerful proprietary technology, we disrupt the status quo—delivering groundbreaking innovation that prepares employers not just for what’s happening today, but for what’s likely to happen tomorrow. For over 75 years, our firm has harnessed these strengths to offer fresh perspectives on each matter we advise, litigate, mediate, and negotiate. Because at Littler, we’re fueled by ingenuity and inspired by you.

Kathryn S. McConnell

Jay Inman

ATLANTA OFFICE

LEXINGTON OFFICE

Kathryn S. McConnell – Katy is a shareholder in Littler’s Atlanta office, where she counsels, trains, and defends multinational and domestic companies on employment and traditional labor law matters, including use, implementation and enforcement of restrictive covenants, discrimination, harassment and retaliation in the workplace, wrongful termination, wage and hour compliance, unfair labor practice charges and union avoidance. She regularly prepares and advises on non-competition, confidentiality, non-disclosure and other employment-related agreements, as well as the development of incentive and commission plans. Katy is also an experienced employment litigator who focuses on representing employers in complex employment litigation matters, including class and collective actions in the wage and hour and employment discrimination areas.

Jay Inman - Jay is a shareholder in Littler’s Lexington office, where he represents employers throughout Kentucky and Tennessee in a full range of labor and employment law matters arising under federal, state, and local laws. He regularly provides advice, counsel, and training for employers of all sizes, and he has assisted clients with administrative agency investigations and charges, as well as represented clients at various stages of litigation, including trial and, if necessary, appeal. Jay has particular experience with drafting and enforcing arbitration agreements and appellate practice in employment law, and his industries of emphasis include healthcare and manufacturing.

Martenson, Hasbrouck & Simon LLP Martenson, Hasbrouck & Simon LLP focuses its practice on labor and employment defense and business litigation. Our reputation for excellence has been earned through our dedication to providing innovative solutions to the most difficult problems at an exceptional value. We have forged long-lasting relationships with our clients through out tenacity, skill, and accessibility. Based in Atlanta, Georgia in the heart of Buckhead, with two additional offices in Southern California (San Diego) and Northern California (Sacramento), we have developed a highly flexible representation model that enables us to serve clients of all sizes, across all regions of the country.

Betsy Bulat Turner Betsy Bulat Turner is a partner with Martenson, Hasbrouck & Simon LLP where she defends labor and employment litigation from nationwide class actions to single plaintiff wrongful termination suits and advises management on related business compliance matters. Betsy has been selected as a Rising Star by Georgia Super Lawyer magazine, has been designated as Legal Elite in Labor and Employment by Georgia Trend magazine, and has obtained a Martindale-Hubbell AV Preeminent Peer Review Rating. Betsy is an alumna of the Georgia Institute of Technology (B.S., high honors) and the Georgia State University College of Law (J.D., cum laude). Betsy can be reached at bturner@martensonlaw.com.

Wes R. McCart Wes McCart is a partner with Martenson, Hasbrouck & Simon LLP where he defends employers in claims alleging discrimination or harassment, unfair labor practices, and wage-and-hour violations. Wes also represents businesses and individuals in defense and enforcement of restrictive covenant disputes, and he regularly provides day-to-day advice and counsel to clients regarding employment and compliance matters. Wes has been selected as a Rising Star by Georgia Super Lawyer magazine since 2017. Wes is a graduate of the University of Georgia and DePaul University College of Law (summa cum laude). Wes can be reached at wmccart@martensonlaw.com. 32

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W. Brian Holladay Brian Holladay is a partner with Martenson, Hasbrouck & Simon LLP where he advises management with regard to labor and employment law issues and represents employers in litigation across the country. He tracks newly-enacted legislation across all jurisdictions and helps clients comply with these laws. He also specializes in issues relating to staffing agencies, such as joint employment. Brian graduated from Furman University and the Duke University School of Law, both magna cum laude. He worked for the Equal Employment Opportunity Commission during law school and, prior to joining the firm, served as a law clerk for a federal judge. Brian can be reached at bholladay@martensonlaw.com.

Lisa Knottek Simpson Lisa Knottek Simpson is a partner with Martenson, Hasbrouck & Simon LLP where she represents companies in the full range of employment-related litigation, with an emphasis on discrimination, harassment, and retaliation claims. Lisa also assists employers in implementing preventative practices, including preemptive training. Lisa graduated from the University of Georgia and Emory University School of Law. She currently serves on the Board of Directors of the State Bar of Georgia Labor and Employment Section Mentorship Academy which provides new lawyers with experienced mentors outside of their organization to foster professional development and assist mentees in navigating successful legal careers. Lisa can be reached at lsimpson@martensonlaw.com.

The Kullman Firm The Kullman Firm has exclusively represented management in labor and employment matters since 1946, including matters relating to Title VII, the ADA, ADEA, FMLA, FLSA, OSHA, ERISA, COBRA, OFCCP, NLRA, WARN and other federal and state employment laws. The Firm represents clients in a wide range of industries, which provides it with a sound understanding of the general business practices of a vast array companies. With this experience, the Firm is able to provide proactive legal advice to help clients achieve their business goals while complying with applicable law.

Jennifer D. Sims

MaryJo Roberts

MISSISSIPPI OFFICE

NEW ORLEANS OFFICE

Jennifer D. Sims represents management in employment matters, including EEOC charges and employment-related lawsuits. Ms. Sims also advises clients on day-to-day employment matters, including personnel policies, classification and leave issues, and employee handbooks. Ms. Sims is AV-rated in Martindale and has been recognized as a Super Lawyers Rising Star since 2015. She is also an editor for BLR’s HR Hero Mississippi Employment Law Letter and has authored employment law articles for HR Professionals Magazine.

MaryJo Roberts, Of Counsel at the Kullman Firm in New Orleans, Louisiana, was recognized as a Rising Star in Employment & Labor by Super Lawyers Louisiana for 2019. She has received this recognition each year since 2013. Her practice includes: federal and state discrimination, retaliation, and harassment claims; Family and Medical Leave Act litigation; and wage and hour litigation under the FLSA and state laws. Ms. Roberts also provides training to human resources professionals on employment matters. Prior to practicing employment law, Ms. Roberts served as a judicial clerk to the Honorable James Brady in the Middle District of Louisiana.

Fisher Phillips Fisher Phillips is one of the largest labor and employment law firms in the country with more than 400 attorneys in 32 offices nationwide, including Tennessee, Florida, Georgia, Kentucky and Mississippi. Some of the most talented and experienced attorneys come to the firm to handle challenging cases involving workplace issues faced by employers and HR professionals. Fisher Phillips attorneys specialize in all areas of labor and employment law and have the experience and resolve to achieve your desired results in court, with employees and unions, and with competitors.

Courtney Leyes

Robert W. Ratton III

Emily Litzinger

MEMPHIS OFFICE

LOUISVILLE OFFICE

Courtney Leyes is a partner with the Fisher Phillips Memphis office, where she represents employers throughout Mississippi and throughout the state of Tennessee in litigation related to discrimination and harassment in the workplace, which has included representing clients in federal jury trials. She also represents employers on wage and hour issues in both the court system and before the DOL’s Wage & Hour Division. Specifically, she has represented employers in several FLSA collective actions over the past couple of years. Leyes received the Memphis Business Journal’s 2017 Best of the Bar award for Ace Associate and has been listed in MidSouth Super Lawyers Rising Stars since 2014.

Rob Ratton is an attorney with the Fisher Phillips Memphis office where he advises clients in employment law matters related to Family and Medical Leave Act, Fair Labor Standards Act, and Equal Employment Opportunity Commission. Rob has tried over 30 jury trials to verdict and has represented clients in front of state and federal courts at both the trial and appellate level. Ratton was listed in Mid-South Super Lawyers Rising Stars in 2016 and was selected as one of Memphis Business Journal’s 2017 40 Under 40.

Megan U’Sellis LOUISVILLE OFFICE

Gabriel McGaha MEMPHIS OFFICE

Gabriel McGaha is an attorney with the Fisher Phillips Memphis office, where he represents clients on a variety of employment-related matters, including those involving harassment, discrimination, and retaliation claims. He has significant experience preparing matters for litigation, as well as serving as lead counsel at trial. McGaha received the Tennessee Bar Association 2017 Larry Dean Wilks Leadership Award and has been listed in Mid-South Super Lawyers Rising Stars since 2016. He has been chosen as a finalist for the Memphis Business Journal’s 2019 Best of the Bar award.

Megan U’Sellis is an attorney in the firm’s Louisville office. She counsels and represents employers throughout many states and industries regarding a wide range of labor and employment issues, including claims of harassment, discrimination and retaliation under Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and similar state laws. She also handles various wage and hour matters under both the Fair Labor Standards Act and state wage and hour laws, including collective and class actions. She also conducts internal audits, management training, and handbook reviews, in addition to providing practical day-today advice. U’Sellis has been listed as a Kentucky Super Lawyers Rising Star since 2015.

Emily Litzinger is an attorney in the firm’s Louisville office and works with employers to navigate the intricacies of the everchanging landscape of employment law. She regularly works with employers to develop preventative strategies to ensure compliance with employment laws to help avoid the burdens associated with costly litigation. Litzinger drafts handbooks, policies, procedures and training materials as well as provides daily advice to clients with employment-related issues. She has successfully defended employers in complex litigation on a wide-range of labor and employment issues including discrimination, wage and hour, breach of contract, retaliation and sexual harassment. She has been selected as a Kentucky Super Lawyers Rising Star since 2016.

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Cross Gunter Witherspoon Galchus U.S. News has named CGWG the leading Labor and Employment law firm in the state of Arkansas for 2018. We are proud to have seven attorneys selected as Best Lawyers, including one being named “Lawyer of the Year” in his practice area. CGWG’s team of attorneys are highly adept in handling a wide range of labor and employment defense matters, including discrimination litigation, collective bargaining, benefits advice, employment contracts, complex immigration matters, development of constructive employee relations, and the development of employment policies and procedures. Preventive law strategies and exceptional educational programs are hallmarks of CGWG’s services.

Joe Kraska

Mary Buckley

ARKANSAS

Joe Kraska, an associate attorney at CGWG, practices labor relations and employment law. Originally from Minnesota, Joe served on active duty in the United States Air Force for nearly ten years. Since 2013, he has been serving part-time in the Arkansas Air National Guard. Joe received his undergraduate degree with honors in political science from the American Military University and graduated from the University of Arkansas at Little Rock Bowen School of Law, where he was Executive Editor of the University of Arkansas at Little Rock Law Review and President of the Bowen Student Veterans Organization.

Abtin Mehdizadegan

Alexander Clark

ARKANSAS

Abtin Mehdizadegan joined CGWG in 2013 after graduating from the University of Arkansas at Little Rock William H. Bowen School of Law. His practice focuses on management and labor employment defense. He is active in the Firm’s litigation practice and enjoys advising clients about how to develop creative solutions to mitigate and minimize liability. Abtin frequently speaks and publishes on current labor and employment law matters for human resources professionals and various trade associations. He is active in the Pulaski County and Arkansas Bar Associations and provides volunteer legal services for VOCALS – Volunteer Organization, Center for Arkansas Legal Services.

George Ernst ARKANSAS

With over ten years of multi-disciplinary experience representing multinational corporations across various industries, Mr. George Ernst is an accomplished business immigration attorney whose practice focuses on advising clients in highly technical and complex matters relating to the employment of foreign nationals under EB-5 visas for international investors, EB-1 and 2 visas for employment-based immigration, national interest waivers, E-2 treaty visas, and H-1 and O-1 temporary work visas reserved for STEM, specialty occupations, and individuals of extraordinary ability. Complimenting his immigration practice, Mr. Ernst also supports the firm’s Employment Defense practice group, in particular, zealously defending employers in the growing area of governmentinitiated I-9 audits and charges. 34

Mary E. Buckley is an Associate at CGWG. A Texas native, Mary has been in private practice since graduating from the University of Arkansas School of Law in Fayetteville and is licensed in both Arkansas and Texas. During law school, Mary served for two years as President of the Student Bar Association, received the award for most outstanding contribution to the law school community, and externed for the Honorable Joe J. Volpe of the United States Magistrate Court for the Eastern District of Arkansas. She is an active member of the Arkansas, Texas, and American Bar Associations.

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Alexander Clark, an Associate at CGWG, practices in civil litigation and labor and employment defense before federal and state courts and agencies. He also assists clients in reviewing and drafting employment policies and job descriptions. Alex received his undergraduate degree in Marketing from the University of Arkansas and graduated magna cum laude from the University of Arkansas at Little Rock Bowen School of Law in 2017, where he received awards for top paper in Decedents Estates, Evidence, Federal Income Taxation, Property Law, Public International Law, and Real Estate Finance.

Calculating an Employee’s “Regular Rate of Pay” Under the FLSA By STEPHEN CLEMENT

In October, the Trump Administration unveiled its Fall 2018 Unified Agenda of Regulatory and Deregulatory Actions. The Agenda emphasizes regulatory restraint, and underscores the current administration’s commitment to a more businessfriendly regulatory framework noting that “In general, the [DOL] will work to assist employees and employers to meet their needs in a helpful manner, with a minimum of rulemaking.” In line with this commitment is a Notice of Proposed Rulemaking (NPRM) indicating a forthcoming change to how employers should calculate an employee’s “regular rate of pay” in order to calculate overtime. Specifically, the NPRM states that “the Department will propose to amend 29 CFR part 778, [of the Fair Labor standards Act] to clarify, update, and define regular rate requirements under section 7(e)(2) of the Act.” However, specific details of the proposed change were not provided. Because promulgation of the proposed rule is not expected until at least March of 2019, and actual implementation of it will likely take at least a year, it is important for employers to remain in compliance with the laws as currently written. The FLSA requires that covered, nonexempt employees in the United States be paid at least the federal minimum wage for each hour worked and receive overtime pay at one and one-half times the employee's regular rate of pay for all hours worked over 40 in a workweek. However, too often, employers interpret the FLSA to mean that overtime should be paid at time-and-a-half of the employee’s hourly rate. While that is often the case, it is not always the case and an employee’s hourly pay may not be their “regular rate of pay.” Determining an employee’s regular rate of pay and overtime pay is not always simple. The law states that the regular rate of pay includes “all remuneration for employment paid to, or on behalf of, the employee,” except certain payments that are specified under the FLSA. The regular rate of pay is determined by dividing the employee’s total remuneration for employment in any work week, except statutory exclusions, by the total number of hours worked in that week. This article discusses several common pitfalls that should be avoided when calculating an employee’s regular rate of pay and overtime pay.

1. Regular Rate of Pay Must Include Non-Discretionary Bonus or Commission Pay. For purposes of calculating overtime pay, section 7(e) of the FLSA, the section identified to be amended in the recent NPRM, provides that non-discretionary bonuses must be included in the regular rate of pay. Non-discretionary bonuses include those that are announced to employees to encourage them to work more steadily, rapidly or efficiently, and bonuses designed to encourage employees to remain with a facility. Thus, it is an error to assume that bonus or commission pay does not affect regular rate of pay because it is based off of performance, not off of the number of hours 36

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worked. When pay is based off of performance, it must be considered when calculating regular rate of pay. That includes anytime pay is used to incentivize job performance, quality, or accuracy. Such outcome-based bonuses include commissions, bonuses and even non-cash gifts such as movie tickets for employee performance. For example, consider the following hypothetical provided by the DOL where an intermediate care facility for the disabled pays its employees on a bi-weekly basis. If employees work all the hours that they are scheduled to work in a pay period, they are given a $100 bonus. If an employee works overtime, must this bonus be included in their regular rate of pay for overtime purposes? Yes. In computing an employee’s regular rate under the 40 hour overtime standard, the employer must add half of the bi-weekly bonus ($50) to the employee’s earnings (hourly rate times the total hours worked) for that week. The resulting total compensation would be divided by the total hours the employee worked during that week to determine the regular rate. An employee paid biweekly at a rate of $12 per hour plus a $100 attendance bonus, working a schedule of 56 hours per week as shown in the chart below, would be due overtime pay as follows:

WEEK 1

Sun.

Mon.

Tue.

Wed.

Thu.

Fri.

Sat.

Hours Worked

WEEK 2

Sun.

Mon.

Tue.

Wed.

Thu.

Fri.

Sat.

Hours Worked

$100 (bi-weekly attendance bonus) ÷ 2 = $50 (weekly bonus equivalent)

56 hours worked x $12/hour + $50 (weekly bonus equivalent) = $722 (total ST compensation)

$722 (total ST compensation) ÷ 56 hours worked = $12.89 (regular rate) $12.89 (regular rate) x ½ = $6.45 (half-time premium) $12.89 (regular rate) + $6.45 (half-time premium) = $19.34 (overtime rate)

40 (straight time hours) x $12.89 (regular rate) = $515.60 (straight time earnings)

16 (overtime hours) x $19.34 (overtime rate) = $309.44 (overtime earnings)

Total earnings for week one

$825.04

Total earnings for week two

$825.04

Total earnings for bi-weekly period $1,650.08

Conversely, the FLSA further provides that bonuses should not be included when calculating regular rate of pay when “the bonus remains completely within the employer’s discretion, which the employer exercises close to the end of the period for which the bonus is paid, and is in no way required by any contract, agreement, or promise such that employees may expect the bonus.” Thus, a typical end-of-the-year discretionary bonus is likely not to be included when calculating an employee’s regular rate of pay, unless the employer has represented that such bonuses are given (think about the promise of an end-of-the-year Christmas bonus announced to newly-hired

employees as a recruiting tool, which would be a non-discretionary bonus that has to be included when calculating the regular rate). Other such exclusions include sums paid as gifts; payments made for occasional periods when no work is performed; reimbursements for traveling expenses; profit sharing; payments made for employee benefits; additional compensation for hours worked beyond a specified number in a day/week or outside the normal workday/week; premium compensation for work on weekends or holidays; and income derived from qualifying stock transactions. In sum, discretionary bonuses and gifts are generally payments that an employee does not have reason to expect and that are made at the sole discretion of the employer in recognition of services – they must be both discretionary as to fact of payment (i.e., no expectation/no promise for them) and discretionary as to amount (i.e., not set formula for how the amount will be determined). If the payments meet this criteria, such payments are not included in overtime calculations.

2. A Base Rate or a Regular Rate Set in an Agreement or Contract is Not Necessarily an Employee’s Regular Rate of Pay. The regular rate of pay also cannot be left to a contract by the parties in which the regular rate for an employee is predetermined; it must be drawn from what actually happens as set forth above. The Supreme Court has described the regular rate of pay as the hourly rate actually paid the employee for the normal, non-overtime workweek for which he is employed; as an "actual fact." However, employers often set a base rate or “regular rate” in their collective bargaining agreements. This can be problematic if it is used as the regular rate of pay for purposes of calculating overtime. Employers and employees are not free to define or agree upon the employee’s regular rate of pay. Instead, employers must determine the regular rate of pay in accordance with the FLSA by dividing the employee’s total remuneration for employment in any work week, with the exception of specified exclusions, by the total number of hours worked that week.

3. Accurately Determining the Workweek. Lastly, the FLSA’s overtime requirements are based on a single workweek, not an employee’s pay period. To calculate overtime owed to an employee for a particular workweek, the workweek must be accurately determined. The FLSA does not permit averaging of hours over two or more weeks (except for certain specific exclusions). Thus, if an employee works 30 hours one week and 50 hours the next, he must receive overtime compensation for the overtime hours worked beyond the applicable maximum in the second week, even though the average number of hours worked in the 2 weeks is 40. This is true regardless of whether the employee works on a standard or swing-shift schedule and regardless of whether he is paid on a daily, weekly, biweekly, monthly or other basis. An employee’s workweek is a fixed and regularly recurring period of seven consecutive 24 hour periods for a total of 168 hours. There is no requirement that the workweek coincide with a calendar week: it may begin on any day and at any hour of the day. An employer can establish different workweeks for different employees or groups of employees. However, any change in a workweek must be intended to be permanent and not designed to evade the FLSA’s overtime requirements.

Stephen Clement, Attorney The Kullman Firm – New Orleans shc@kullmanlaw.com www.kullmanlaw.com

FISHER PHILLIPS. WHEN YOU HAVE TO DRAW A LINE IN THE SAND.

Employers often must draw the line: in court, with employees and unions, and with competitors. As one of the largest labor and employment firms, Fisher Phillips has the experience and tenacity to help you get the results you need. That’s why some of the savviest employers come to us to handle their toughest workplace issues. 1715 Aaron Brenner Drive, Suite 312 Renaissance Center | Memphis, TN 38120 | 901.526.0431

fisherphillips.com | 32 Locations www.HRProfessionalsMagazine.com

The Partial Government Shutdown: How it Affected Employers and Important Considerations to Prepare for Round II (or III…)

The Longest Government Shutdown…Ever! By SHEERIN MEHDIAN

asting five weeks, from December 22, 2018 to January 25, 2019, the United States endured the longest government shutdown in its history. After Congress failed to reach a deal to fund certain departments and agencies of the government, and President Trump declared that he would not sign a bill that did not include funding for a border wall between the United States and Mexico, many sectors of the U.S. government halted operations, affecting government employees and leaving employers to understand how to react. The shutdown was “partial” because it only affected federal agencies that did not have previous spending plans: the Department of the Treasury, Department of Agriculture, Homeland Security Department, Department of the Interior, Department of State, Department of Housing and Urban Development, Department of Transportation, Department of Commerce, the Department of Justice, and the Equal Employment Opportunity Commission (EEOC). Other agencies that are funded through Fall 2019, including the Department of Labor (DOL), National Labor Relations Board (NLRB), and the Department of Health and Human Services (HHS), were not impacted. On January 25, 2019, President Trump signed a short-term spending bill—excluding border wall funding—that temporality provided funding and reopened affected government sectors until February 15, 2019. With the possibility that the executive and legislative branches may reach another impasse in funding, employers should be familiar with how a shutdown may affect them.

During a government shutdown, however, the EEOC activities that will not occur include: • Staff will not answer questions or respond to correspondence from the public; • Though claimants may file charges, these charges will not be investigated; • The EEOC will not litigate in the federal courts for cases for which the courts grant extensions; • Mediations and federal sector hearings will be cancelled, and federal employees' appeals of discrimination complaints will not be decided; • Outreach and education events will be cancelled; and • FOIA requests will not be processed. For the time being, the EEOC has resumed operations, though there may be some delay in courts lifting stays on pending EEOC litigation, the agency reviewing the backlog of charges, and the EEOC communicating with parties regarding the status of mediation. Employers should note that employees must still submit charges to the EEOC, even during a shutdown, to preserve their claims. In case the government takes another hiatus, these considerations are helpful to understand the extent of access employees and employers will have to the EEOC.

Immigration: “EEEK!”-Verify EEOC: The Equally Affected Employment Agency

A government agency that by name affects employers, the EEOC ceased most of its operations due to the shutdown. The EEOC’s contingency plan, released on December 3, 2018, outlined that only activities related to the safety of human life and the protection of property continue during a shutdown: • Individuals can submit charges; • Litigation will continue for matters that are not continued; • Security of the EEOC’s office, property, and information systems will be maintained; and • The Commission will continue to examine new charges to determine if emergency judicial action is needed. 38

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During a government shutdown, the United States Citizenship and Immigration Services (USCIS) remains open as part of the Department of Homeland Security, and United States Customs and Enforcement (ICE) activities typically continue, as normal. Important for employers to note, however, is the delays in visa processing that ensue with government shutdowns. E-Verify, the online system by which employers verify the working eligibility of new hires, ceases operation during the shutdown. Employers that attempted to verify employees during a shutdown likely received the message: "NOTICE: Due to the lapse in federal funding, this website will not be actively managed. E-Verify and E-Verify services are unavailable” from the E-Verify website. Without E-Verify, employers cannot access their accounts to edit or terminate their accounts or company information, run reports, reset passwords, or take action in any cases. Also,

E-Verify Customer Support also closes during a shutdown leaving users without email and telephone support, without access to myE-Verify, employees cannot resolve Tentative Non-confirmations (TNCs), and training sessions are suspended. USCIS issued guidance that employers’ obligation to verify employees within three days of the employment through E-Verify is suspended while E-Verify is unavailable, and employees have extended time to resolve TNCs. Practically, during a shutdown, employers should continue to hire qualified new employees as they wish and prepare Form I-9s, Employment Eligibility Verification, for all new hires by the third business day after an employee commences work. Though, during a government shutdown, there is generally a lapse in I-9 support and processing. Once a government shutdown ends, employers should process the E-Verify inquiries for employees who may have been hired during the shutdown period. If the employer is questioned at that time about submitting employees outside of the three-day window, the employer should type in “Federal Government Shutdown” in the “other” section of the down-down menu. Like the I-9 support, even with the government resuming operation, E-Verify support may be delayed. As of January 28, 2019, E-Verify has resumed; however, users might have longer than usual processing times.

The DOL, including the Office of Federal Contract Compliance Programs (OFCCP), was funded through earlier spending bills; therefore, it did not stop functions due to the shutdown. Additionally, the DOL’s Wage and Hour Division, and thus DOL enforcement, was unaffected. However, federal contactors should be aware that they may have to furlough their service employees who work at federal facilities in jobs that are unneeded due to a facility closing because of the shutdown. Also, federal contractors who bear H-1B visas, non-immigrant visas that allow U.S. employers to employ workers in certain specialty occupations, must pay employees their regular wages, even if their operations are halted during a shutdown. Federal contractors with H-1B visas may be required to use their accrued paid time off during the shutdown first; then, if that time is depleted before the cessation of the shutdown, the contractor must resume paying the visa holder’s regular wages.

Conclusion

The partial government shutdown has concluded for the time being. However, the political stalemate in Washington and the fact that the spending bill is temporary render it possible that the country will slip into another government closure. If that times comes, lessons and guidance from shutdowns past will be useful tools for employers.

Government Contractors: The Fine Print for Agency Friends

As with the agency’s employees, federal contractors doing business with affected government agencies can also be impacted by government shutdowns.

Sheerin Mehdian, Associate Littler smehdian@littler.com www.littler.com

SHRM-Memphis Executive Roundtable Meeting February 7, 2019

The SHRM-Memphis Executive Roundtable met February 7, 2019 at Owen Brennan’s in Memphis. The topic was “The Changing Dynamics of the Employee-Employer Relationship.” The Roundtable meets quarterly and includes executive level human resources professionals from all industries.

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INDEPENDENT CONTRACTOR ANALYSIS:

NLRB’s “SuperShuttle” Ride Back to Its Prior Standard

By JAMES V. THOMPSON

THE NATIONAL LABOR RELATIONS BOARD (NLRB) recently re-evaluated its standards for determining whether a worker is an employee, versus an independent contractor. The Board’s decision in SuperShuttle DFW, Inc. and Amalgamated Transit Union Local 1338, No. 16-RC-010963 (Jan. 25, 2019), marks a continuation of the commonlaw factors that had been followed for decades. More importantly, the decision marks a rebuke of the “economic realities” test instituted in a 2014 Obama-era NLRB decision. In SuperShuttle, a union petitioned for individual franchisees who operate shared-ride vans for SuperShuttle to be deemed employees so that they could form a bargaining unit. The NLRB’s Acting Regional Director had determined in 2010 that the franchisees were independent contractors, from an analysis of the non-exhaustive set of common-law agency factors traditionally used by the NLRB: • The extent of control which the master may exercise over the work details. • Whether the worker is engaged in a distinct occupation or business. • Whether the work is usually done under an employer’s direction or supervision. • The skill required in the particular occupation. • Whether the worker supplies his own instruments, tools, and place of work. • The length of time for which the person is engaged on the job. • Whether the worker is paid by the time or by the job. • Whether the work is part of the employer’s regular business. • The parties’ intention and belief in creating the relation of master and servant. • Whether the principal is or is not in the business. Under this analysis, all of the incidents of the work relationship were to be assessed; while certain factors may be more significant under the particular facts, no single factor was necessarily decisive. Years earlier, SuperShuttle had designated its drivers as employees, assigned regular work schedules using company-owned vehicles, and paid hourly wages. SuperShuttle converted to a franchise model in 2005, under which drivers had to sign a one-year franchise agreement expressly marking them as nonemployee franchisees operating independent businesses. The franchisees had to supply their own shuttle vans and pay a franchisee fee and flat weekly fee for use of the brand and dispatch system. In turn, they had no set work schedule, kept all fares for the assignments they selected, and could hire relief drivers to operate their vans. The NLRB’s Acting Regional Director found in 2010 that SuperShuttle sufficiently proved the franchisees were not employees covered under the NLRA. In doing so, she gave significant weight to two factors: (1) 40

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the lack of any relationship between the company’s compensation and the amount of fares collected and (2) the company’s lack of control over the manner and means by which the drivers conducted business after they left the company’s garage. The Director also emphasized that the franchisees face a meaningful risk of loss in light of their own operational costs (vehicles, maintenance and fuel costs, weekly system fees, etc.), their calculated decisions on which trips they chose to accept, and the franchisees’ option to use a relief driver to increase profits. These circumstances suggested the business relationship offered the franchisees potential to generate more revenue for themselves. On appeal, the union seeking to represent the franchisees emphasized SuperShuttle’s extent of control over the franchisees. The union pointed to the company’s unilateral drafting of the required franchise agreement and its rules mandating appearance standards, use of company logos and uniforms, and training for franchisee drivers. The union also pointed to rules allowing for assessment of fines and other discipline by SuperShuttle against the franchisee drivers, plus prohibitions from working for SuperShuttle’s competitors and modifying fares to obtain more business.

“Economic Realities” under the Obama-Era NLRB While the Acting Regional Director’s 2010 decision was still under Board review, the NLRB issued a 2014 decision, FedEx Home Delivery, 361 NLRB 610 (2014). The FedEx Board kept the same common-law agency factors, but reframed the analysis by limiting the importance of the workers’ entrepreneurial opportunity. Under FedEx, the focus shifted to the “economic realities” of the parties’ relationship. The FedEx Board redefined the significance of an independent contractor’s “entrepreneurial opportunity for gain or loss,” declaring that the worker’s entrepreneurial opportunity should not be the driving principle of the overall analysis. Further, the FedEx Board also held that only actual (not theoretical) entrepreneurial opportunity should be considered. Thus, if the employer’s constraints on how the worker conducted his work would actually result in greater economic gains, then the worker could be viewed as an independent contractor. In contrast, if there was only a theoretical chance for economic gain in how the employer required the worker to conduct the work, this would indicate he was an employee. This analysis became known as the “economic realities” test: would the worker actually realize the opportunity for gain, or were the potential for economic gains more or less a mere possibility? Under the FedEx “economic realities” analysis, it became much easier for workers to be construed as employees, rather than as independent contractors with the potential for gains and loss through their own commercial activities. With the greater likelihood of workers being deemed employees, more workers became subject to NLRA protections. Consequently, more employers had to come to terms with potential unionization, social media conversations, and other employee rights within the workplace.

However, the change in presidential administrations and political climate brought forth a change in the NLRB membership. Of the four present NLRB members, only one was appointed by President Obama. The other three have been appointed by President Trump after the Republican Party regained control of the Executive Branch. The current NLRB Board recently chose the SuperShuttle case as an opportunity to re-examine the independent contractor test and the impact of “entrepreneurial opportunity” upon those factors.

“Entreprenurial Opportunity” Under the Age of Trump The NLRB in SuperShuttle rolled back the FedEx decision for impermissibly altering the common-law test and longstanding precedent. It held that the FedEx Board did not merely “refine” the common-law independent contractor test, but instead fundamentally shifted the analysis to focus on “economic realities.” At the same time, the FedEx Board confined the significance of entrepreneurial activity to one aspect of one factor: whether the worker was, in fact, rendering services as part of an independent business. This “refinement” overemphasized the “right to control” factor as to how likely a worker was economically dependent on the employer. The SuperShuttle NLRB admitted that entrepreneurial opportunity is not one of the common-law factors, let alone a “superfactor.” However, the entrepreneurial opportunity was still a principle by which to evaluate the overall effect of the common-law factors. Applying this principle, the NLRB could determine whether a worker had or may have independence from the employer to pursue further economic gain. Thus, employer control and entrepreneurial opportunity become flip-sides of the same coin: the more control by employers, the less room for entrepreneurial opportunities, and vice versa. While the SuperShuttle NLRB did not mechanically apply the entrepreneurial opportunity principle to each of the common-law factors, it did allow for more significance of that principle in the overall analysis. All factors are eligible for evaluation under the entrepreneurial opportunity concept—the worker’s availability for economic gain—depending on whether the circumstances make such evaluation appropriate. The SuperShuttle decision now gives more room to include potential entrepreneurial opportunity in the analysis, rather than being limited to the actual economic gains. Where the overall evaluation of the commonlaw factors shows significant opportunity for economic gain (and, by the same turn, significant risk for loss), the NLRB is likely to deem the worker an independent contractor, rather than an employee. The SuperShuttle decision “shuttles” us back a decade on the independent contractor test, yet also advances employers forward in their ability to treat certain workers as independent contractors, not subject to NLRA rules on unionization and concerted work-related speech. Employers still have to evaluate all the common-law factors that have been used for decades, but now have a more expansive analysis to include the workers’ potential for business gains. Workers may benefit from those increased potential for gains, but employers no doubt will benefit from lessened concerns over NLRA restrictions.

James V. Thompson, Attorney Rainey Kizer Reviere & Bell PLC jthompson@raineykizer.com www.raineykizer.com www.HRProfessionalsMagazine.com

The U.S. Economy

is STRONG, But Fragile BY RICHARD WORKS

How might the current economy be impacting employers, employees, and human resource professionals? In this article weâ&#x20AC;&#x2122;ll examine historical and recent data published by the U.S. Bureau of Labor Statistics. Weâ&#x20AC;&#x2122;ll use labor force statistics data from their Current Population Survey, employment data from their Current Employment Statistics national survey, and business employment dynamics data from their Quarterly Census of Employment and Wages program. The data in this analysis have been seasonally adjusted so that regular fluctuations which are experienced each season, such as increased summer or holiday employment, may be discounted from the larger picture. This will provide a pure analysis of the labor market and economy. First, weâ&#x20AC;&#x2122;ll examine labor force statistics data from the Current Population Survey. Figure 1 explicitly shows (in thousands) the number of people employed, unemployed, and those not in the labor force, seasonally adjusted from January 2000 to January 2019. However, the civilian noninstitutional population 16 years and over, and the number of people in the labor force are implicitly shown as well. The referenced population can be deduced by adding the number of people employed, the number of people unemployed, and those not in the labor force. In other words, the total population would be the full shaded area of Figure 1. Similarly, the total number of people in the labor force can be deduced by adding the number of people employed with the number of people unemployed.

We see from Figure 1 that the population has increased from 211.4 million in January 2000 to 258.2 million in January 2019. Similarly, the labor force increased from 142.3 million to 163.2 million during that same time period. The number of individuals in the labor force can be divided between those employed and those not employed, but seeking employment. The number of people employed increased from 136.6 million in January 2000 to 156.7 million in January 2019, 42

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and the number of people unemployed went from 5.7 million to 6.5 million during that same time period. The number of people not in the labor force was 69.1 million at the start of 2000 and 95 million by January 2019. Another look at the data, shown in Figure 2, considers the labor force participation rate, employment-to-population ratio, and the unemployment rate. The labor force participation rate is calculated by dividing the number of people in the labor force by the number of people in the civilian noninstitutional population 16 years and over. For example, the number of people in the labor force in January 2019 was 163.2 million and the referenced population was 258.2 million. Therefore, the labor force participation rate for January 2019 was 63.2% (163.2/258.2). Similarly, the employment-to-population ratio is calculated by dividing the number employed by the referenced population. This ratio shows that 64.6 percent of the population was employed in January 2000, and now in January 2019, 60.7 percent of the population was employed.

On the other hand, the unemployment rate is calculated by dividing the number of people unemployed by the number of people in the labor force (not the population). For example, the number of people unemployed in January 2019 was 6.5 million and the number of people in the labor force was 163.2 million. Therefore, the unemployment rate for January 2019 was 4%. The percentages for the labor force participation and employment-to-population are shown on the left on Figure 2 with the unemployment percentage shown on the right. Similar to how we calculated the employment-to-population ratio, we can also calculate the unemployment-to-population ratio as well as the ratio of those not in the labor force to the population. These ratios would show us that in January 2019, 2.5 percent of the population was unemployed and 36.8 percent of the population was not in the labor force. These

data account for the whole population: 60.7 percent employed, 2.5 percent unemployed, and 36.8 percent not in the labor force (60.7+2.5+36.8=100%). However, for official statistics, those not in the labor force are not considered when calculating the unemployment rate, thus the reason the calculation is the unemployed divided by the labor force participation total. Reviewing Figure 2 shows that during the recession (around 2008), the unemployment rate drastically increased, but the labor force participation rate did not have such a drastic decrease. The decrease that one might expect can be found in the employment-to-population ratio. We see that as the employment-to-population ratio decreased, the unemployment rate increased. Since the labor force participation is made up of those employed and those unemployed, the labor force participation rate would not have changed much since the same number of people is essentially being counted. We see a similar trend around the middle of 2015 with the employment-to-population ratio increasing, resulting in a decreased unemployment rate. However, the employment-to-population ratio shows that we still have a slightly lower percentage of people employed than what was present before the recession, but the trend is optimistic. To further our investigation, now we’ll incorporate employment data from the Current Employment Statistics national survey. Figure 3 shows the nonfarm employment and the average hourly earnings of production and nonsupervisory employees, seasonally adjusted from January 2000 to January 2019. The nonfarm employment scale numbers are shown on the left on Figure 3 and the earnings per hour are shown on the right. The data show that nonfarm employment increased from 131 million to 150.6 million for the time period of Figure 3. The economy added 304 thousand jobs in January 2019 with average earnings of $23.12 per hour for production and nonsupervisory employees.

The numbers for the total employment is slightly different from those of nonfarm employment. In January 2000, the total employment was 136.6 million and the nonfarm employment was 131 million. For January 2019, total employment increased to 156.7 million with 150.6 million being nonfarm employment. According to these data, nonfarm employment made up 96% of total employment in January 2019. As with Figure 2, the drastic decrease in employment during the recession around 2008 is also apparent on Figure 3. However, the seasonally adjusted average hourly earnings did not appear to experience a decline. In fact, the seasonally adjusted average hourly earnings show a clear linear trend. Using an elementary statistical regression analysis, the seasonally adjusted average hourly earnings for production and nonsupervisory employees may yield a monthly increase of 0.13%. With employment increasing, not much attention is given to the jobs that we may be losing. To consider how job gains and losses might compare, we turn to business employment dynamics data from the Quarterly Census of Employment and

Wages program. Figure 4 shows the gross job gains and losses from 2000 through the second quarter of 2018. The data show that there was a net gain of 914 thousand jobs in the first quarter of 2000. Some volatility was experienced up until the recession, in which some quarters had net gains while other quarters had net losses. In 2008 and through the first quarter of 2010, the data show that we experienced an aggregated net loss of 9.2 million jobs. However, since the second quarter of 2010, the gross gains had been higher than the gross losses (with the exception of 3Q2017) such that the aggregated net gain was 18.8 million jobs. The second quarter of 2018 yielded 7.6 million job gains and 7.2 million job losses for a net of 437 thousand job gains.

Overall, the apparent trend is that employment is increasing; however, the net job gain/loss value are running close. Although we currently have a net gain in jobs, the trend lines show the possibility of a merge or even result in a net loss. Challenger, Gray & Christmas, Inc., an executive outplacement firm based in Chicago, published on January 3rd that the annual job cut announcements were up 28.6 percent year over year, and was the highest total since 2015. They reported that in the final quarter of 2018, the number of announced job cuts was 42.8 percent higher than in the third quarter of the same year. Using data from the Bureau of Labor Statistics, we see that the number of nonfarm employment grew by 304 thousand in January, but the total number of people employed decrease by 251 thousand (lowering the labor force participation rate by 11 thousand). This change increased the unemployment rate to 4 percent. If the announced job cut announcements take place as reported by the outplacement firm, this may impact the business employment dynamics statistics, possibly increasing the net loss, depending on how the employment gains compare with the losses. However, it is my opinion that the U.S. economy is strong but fragile. We’re doing well, but the slightest mishaps could steer us in the wrong direction. Note: this may not be the view of the Bureau of Labor Statistics or the U.S. Government. The content of this article is only the work of the author’s research.

Dr. Richard Works, Economist Bureau of Labor Statistics – Washington, D.C. works.richard@bls.gov www.bls.gov www.HRProfessionalsMagazine.com

Trump Administration Releases Final Rule on H-1B Lottery Process By GREG SISKIND

resident Trump’s 2017 Buy American Hire American Executive Order promised to “rigorously enforce and administer the laws governing entry into the United States of workers from abroad” in order to create “higher wages and employment rates for workers in the United States, and to protect their economic interests.” (https:// www.whitehouse.gov/presidential-actions/ presidential-executive-order-buy-americanhire-american/).

The Order, known as BAHA, has been used to justify dozens of changes in immigration processing in the months since. One of the most recent BAHA initiatives is the release of a new final rule by the Department of Homeland Security regarding the method by which USCIS chooses who will get H-1B visas each year. Under the Immigration and Nationality Act, 85,000 H-1B visas are available each year. 65,000 are available to workers who have at least a bachelors degree or equivalent and are coming to work in specialty occupations. An additional 20,000 are available in a second lottery for graduates of advance degree programs in the United States. USCIS has sought to make changes to the way applicants are chosen for the two pools of visas. Under the system in place for the last 15+ years, two lotteries are conducted for H-1B visas. The 44

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process requires petitioners to file their applications and then initially a lottery for the 20,000 advance degree holders is conducted. Those who are not selected in that lottery are then thrown back in the hopper for the second “regular” lottery for main pool of 65,000 H-1Bs. USCIS suggested two major changes to this process in a proposed rule published on December 3, 2018. First, instead of requiring petitioners to file complete applications, petitioners would file electronically a pre-application requesting an H-1B with very basic information and a lottery would be conducted based on those “pre-filings”. Applicants selected in this electronic pre-registration process would then be invited to apply for H-1Bs and would be required to file during specific windows of time determined by USCIS. The second major change is a reversal of the two lotteries. So instead of the 20,000 lottery being held and then the losers being added to the second lottery, the lottery for 65,000 would be held first and anyone eligible for the 20,000 lottery not picked in the first go-round would be included in the lottery for advance degree workers. What this means is that the odds for people eligible in the advance degree lottery will go up - probably by 5 to 10%. When USCIS announced the proposed rule, they suggested they needed to quickly move things along in order to have the new system in place for the 2020 fiscal year lottery which is held in April of the year before (I.e. April 2019). They noted in the proposed rule that they were considering the option to hold off on the pre-registration aspect of the rule for the first year, but go ahead and switch the order of the H-1B lotteries. On January 30th, USCIS released a final rule exercising that option. USCIS intends to accept applications as they have previously and will start pre-filing next year. But they intend to switch the order of the lotteries for this filing season.

USCIS received a number of comments about the proposed rule. One may wonder how the agency was able to review the comments during a period in which the government was shut down, but that question will probably have to be answered after a Freedom of Information Act request is handled. But the agency did indicate that they were concerned enough by comments regarding the agency’s ability to test a new electronic filing system to delay the implementation of that aspect of the rule.

So who are the winners and losers in this new system? First, employers will save significant dollars by not having to submit full H-1B applications in April each year. They will still need to gather information to be included in the pre-filing and immigration lawyers will still need to analyze whether the worker meets H-1B requirements and the position also qualifies. But the process is clearly less difficult than the current application process and employers will pay significantly less if they are not selected in the lottery. This may encourage many employers to take a shot at filing H-1B applications than under the current system. On the other hand, an unintended consequence may be to encourage staffing companies - arguably USCIS’ target with the new rule - to file many more applications now that the cost in time of participating in the lottery system will be much less. And obviously those with advance degrees from US universities are winners as their odds of being selected will increase. Many may assume this will increase the level of qualifications of those picked in the H-1B lottery. However, keep in mind that advance degree holders from outside the US will see their odds of approval decrease as well. So there may be a wash or even an overall decrease in qualifications as doctoral level degree holders with foreign degrees lose out to masters degree holders from US institutions. Also, one group that will definitely lose are physicians. 25% of the physician supply in the US is made up of graduates of foreign medical schools who train in US residency and fellowship programs. Under the definition of an advance degree, those doctors are only eligible for the regular lottery. So there will very likely be fewer medical doctors in the H-1B supply as a result of the changes. Another potential problem employers will face is USCIS’ plan to only allow H-1B applications to be filed by those selected in the lottery during specific filing periods. For the last two years, USCIS has suspended premium processing and H-1B applications have taken 8+ months to get to a decision, often after the beginning of the new fiscal year. One can easily envision those required to wait until several months after selection to file being stuck waiting many months longer to get their workers than they requested.

A common theme with all of the skilled worker visa changes in the last two years has been the inevitable lawsuit. The Trump Administration has been extremely ambitious in the changes they’re proposing and this has led to charges of overreaching the actual laws in place governing the immigration system. That very well could happen with this rule, though it is not clear yet who, if any, will challenge the rule. It may take an employer losing the lottery or winning and then facing undue delays in getting a case adjudicated before we see such a suit.

For more information on the new rule, USCIS has posted a press release which contains a link to the final rule at https://www.uscis.gov/news/ news-releases/dhs-announces-final-rule-a-moreeffective-and-efficient-h-1b-visa-program.

Greg Siskind Siskind Susser, PC Immigration Lawyers gsiskind@visalaw.com www.visalaw.com

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10 Things Great Leaders Say To Create Highly Engaged Teams By GORDON TREDGOLD

Great leadership is about creating great relationships with your teams and inspiring them to go above and beyond. Itâ&#x20AC;&#x2122;s about developing a bond, creating trust and building the self-confidence of the team. This can actually be much easier than it sounds and can take very little effort. Here are 10 things that great leaders say to their teams which help build them up, get them engaged, excite and empower them to achieve greatness. The real beauty is that this costs nothing but the returns can be amazing.

Sorry, my fault. No one is perfect and by owning up to mistakes it builds trust, and it also sets a great example for the rest of the team. When accountability starts at the top, the rest of the team will model it, as it is leadership that defines culture.

What do you need from me to make this a success? This is my favorite approach to leadership as it clearly shows that we are in this together and that their success is one of our concerns, and we are more than happy to contribute to it. It also clarifies whether or not they have everything they need to be successful. Once they say I have everything I need, then they have accepted accountability for the outcome, and we have helped to set them up for success, which will help increase the probability of achieving the desired outcome.

I value your contribution. Everyone wants to feel valued and needed as it helps to build confidence and self-esteem. The more confident our teams are the better, as confidence is a key contributor to achieving success. What get's recognized gets repeated and we start by recognizing contribution, as this will then lead to results.

What did we learn from this that we can use next time? Mistakes are always going to happen, but by asking this question we avoid the blame game and we can look to learn from it and 46

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improve for the next attempt. I am a big fan of feed forward rather than feedback. We need to learn how we can avoid mistakes rather than allocate blame. I find that itâ&#x20AC;&#x2122;s much more productive to focus on feed forward than feedback as this can sometimes be taken negatively and negativity kills productivity.

I have complete faith in you. It pays dividends to let your teams know that you have trust in their abilities as it will help them build trust and self-confidence in themselves. As mentioned earlier confidence and self-belief are key contributors to success, and we should look to use every technique possible to help increase it.

How could we do this better? There is nothing worse than an arrogant know-it-all leader who thinks he's cornered the market in great ideas. Trust me I know I worked for several, I may even have also been one at the start of my career. With this one phrase, you dispel that illusion and show that you're open to input, and that collaboration will help us achieve the best results. You never know where great ideas are going to come from, and it's never a good idea to close down possible sources of great ideas. This also goes a long way to showing them that you value their input.

Do you have the capacity to do this now? Too many people struggle to say no to the boss, often committing to a workload that is both unhealthy, and will not lead to success. By asking this question, genuinely and with concern, it will allow people to agree to what is achievable without seriously over committing themselves. It also acts to remind them that we are interested in their health and success. As leaders it's your job to set people up for success!

Great job! Two of greatest words any employee can hear from their boss. Simple, zero costs and massively impactful. The more you say it, the

more you will have to say it as performance will improve. What gets recognized gets repeated and you want to encourage your teams to repeat good performance, and this simple phrase will do that.

Thank You. Politeness costs nothing. A lack of politeness, on the other hand, shows disrespect and a feeling of entitlement, neither of which is going to build trust and loyalty within the team. This simple phrase makes people feel valued, recognized and appreciated, all of which are great motivators.

How are you doing? 'No one cares how much you know until they know you care' is one of my favorite Theodore Roosevelt quotes and the best way to show you care is to ask people how they are doing. Leadership is often seen as difficult and complex, but by just using these 10 simple phrases it will help you to keep it simple and create highly engaged, empowered and excited teams who will follow you anywhere and will achieve great results. You do have to be sincere and authentic when asking these questions, otherwise you can have an opposite impact to the one that you desire. But if you take the time to sincerely ask these questions and listen intently to the answers the impact will be tremendous, both in terms of your organizations results, staff retention and your reputation.

Gordon Tredgold LLC International Business Speaker, Coach and Consultant

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‡ Skills Leaders Will Need in Tomorrow’s Workplace By HARVEY DEUTSCHENDORF

We all know the challenges of tomorrow’s workplace. Increasing technological change combined with changing expectations of what a workplace should be according to millennials. Organizations are increasingly becoming more pedestrian with increased decision making expected at all levels. Job security and lifelong guarantees of work resemble relics from another era. Any workplace roles that have routine in them are likely to be replaced by artificial intelligence and bots that can make decisions much quicker and a much higher degree of accuracy. In this new organization, what skills will the leader of the tomorrow require? Future leader will need to be more adaptable, flexible, willing and able to learn and master new skills quicker than his or her predecessors. Here are 7 skills that will be critical for future leaders:

Effectively Communicate a Vision That Inspires Others in the Organization Tomorrow’s leader will be someone who is able to inspire and motivate others in the organization through their ability to share a vision that others feel compelled to give their best for the organization. The workforce of tomorrow wants more than pay and benefits; they expect to make a contribution towards a worthwhile goal. The leader of tomorrow will be able to articulate this reason in a way that resonates with the organization. Rabbi Stephen Barrs, author of "WIN" states, “When we plan right and establish real, motivating and gut grabbing goals, then we become innately and unbelievably motivated.”

Leaders who are emotionally aware of themselves and able to manage their emotions effectively, will be more likely to gain loyalty and buy in from their staff, suppliers and clients. Establishing good working relationships with others will be much easier for a leader that has well developed personal and social skills. According to Kerry Wekelo, author of "Culture Infusion", “Leading from the heart is looking at each situation through compassion and kindness and having empathy for each team member. When you lead from your heart, you will get to know your team (whether they report to you or not) and their unique skills and insights.”

Be a Quick and Lifelong Learner at a Macro Level The leader of tomorrow will be unable to keep up with the intimate details of all the changes that are happening both inside and outside of his organization. They will have to find and keep people who are content experts who they will have to rely upon to keep them informed. It will be essential for these staff to stay current with overall knowledge of technological and environmental changes that are happening. Tomorrow’s leaders will spend a great deal of their time educating themselves on the changes that are effecting their organization; not only today but into the future.

Great Communication and Listening Skills The ability to communicate effectively and with a wider, diverse range of audiences will become increasingly important for leaders. Listening, the part of communication that has been largely neglected in the past, will become imperative. In order to establish strong, lasting relationships with their staff, clients and suppliers, leaders will have to become aware of how important it is for people to be heard. Even though in many situations there will be no easy solution to problems, it is crucial that they feel heard and listened to. If not they will quickly become disgruntled, lose their motivation to fully contribute and start looking for other opportunities.

Adaptable The rapid pace of technological change combined with changing tastes, desires and marketing techniques require tomorrow’s leader to be open and rapidly willing to

change direction when required. The ability to relax and coast along will be increasingly short lived as the pace of change is accelerating exponentially. Tomorrow’s leader will have to constantly adjust and adapt to a new reality. Instead of dreading chaos and uncertainty they will have to accept these conditions as the new norm. Within this whirlwind, self care is essential. Balance will restore energies to put in the long and full days.

Able to Develop Trust and Earn Respect With the rapid pace of change increasing, having trust in their leader becomes crucial for an organization to thrive. It is the leader’s role to build that trust by being authentic, open and transparent. This means that the leader’s words have to be consistent with, and backed up by, his or her actions. Members of the organization have to be treated fairly and equitably leaving no room for favoritism or nepotism. Highly skilled and valuable staff will not stand for this and will look for work in organizations where they will be accorded respect and recognition for the skills and efforts they bring.

Putting Their People and Organization First Leaders of tomorrow will constantly be looking for ways to grow and advance the people in the organization. Apart from seeing that their organization is thriving financially, they will see developing their people as their primary goal. There will be little room for inflated egos, right fighting and taking credit for the work of others. Future leaders will look for ways to show appreciation to their people and find ways to make them feel genuinely valued. When mistakes are made, they will seek out the necessary learning from the situation and avoid the pitfall in the future; instead of an opportunity to proportion blame and retribution. Harvey Deutschendorf is an emotional intelligence expert, internationally published author and speaker. To take the EI Quiz go to theotherkindofsmart.com. His book THE OTHER KIND OF SMART, Simple Ways to Boost Your Emotional Intelligence for Greater Personal Effectiveness and Success has been published in 4 languages. Harvey writes for FAST COMPANY and has a monthly column with HRPROFESSIONALS MAGAZINE. You can follow him on Twitter @theeiguy. www.HRProfessionalsMagazine.com

Alabama SHRM is excited to announce our 2 Day conference scheduled for May 14th - 15th at the BJCC in Birmingham, AL. Our team has lined up some excellent speakers who are bringing relevant content to our audience on Performance Management, Employee Engagement, Recruiting, Corporate Culture, Diversity & Inclusion and more!

Day 1 1:00 p.m. - 5:15 Sessions 5:15 p.m. - 6:15 p.m. Marketplace Happy Hour Day 2 8:00 a.m. - 4:30 p.m. Multiple Pricing Options Available: Early -bird Conference Registration $325 through Feb 28th Early-bird Corporate Registration (5 attendees) $1462.50 through Feb 28th Student Rate: $99 For more information and to register visit https://www.alshrm.org/2019conference-information Content is being submitted for 10 re-certification credits with SHRM and HRCI 50

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Lisa May Assumes Role of Senior Vice-President of Strategic Solutions for Data Facts

Data Facts, a nationwide provider of mortgage lending solutions and national and international background screening solutions, recently announced seasoned veteran Lisa May has assumed the role of Senior VicePresident of Strategic Solutions for both the lending and background screening divisions. Daphne Large, Data Facts’ President and CEO, is confident that May will thrive in the new role. “It’s my pleasure to make this announcement,” said Large. “Our clients rely on our solutions to help them compete in a global economy. We are partnering with them on a deeper, more strategic level to meet their ever-evolving needs. Data Facts created this position to bring forward, futuristic-thinking to our solutions to benefit both our current and future clients. A person in charge of strategy and innovation must be a visionary, able to think ahead, see the big idea, and focus on what’s possible. For Data Facts, that is Lisa.” Lisa May has been with Data Facts for over 20 years and has held a variety of positions, including Senior Vice-President of Marketing and Sales. She received the Sales Person of the Year (Eagle Award) in 2003, 2009, and 2010 and the Diamond Award (Employee of the Year) in 2010. May will be working with existing and new vendors to research and develop new strategic products and services to help Data Facts lead the market in innovation, solutions design, and product vision. She will also be maximizing partner relationships with Applicant Tracking System (ATS) providers, Loan Origination Software (LOS) providers, and other platform relationships. In addition, she will work closely with multiple departments within Data Facts and drive collaboration to help bring company goals to fruition. May is looking forward to her challenging new role. “I’m happy to be part of a forward-thinking company dedicated to both technological advancements and operational excellence. I'm confident my new position will ultimately benefit our customers with new and innovative solutions to meet their changing needs.”

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What’s missing from your background screening process? Does your current background screening vendor do everything they can to help you find, attract, and retain high-quality employees? Is your current vendor accredited? Do they provide operational excellence? Do they conduct a second review of every criminal record hit? Do they offer advanced connectivity options? If any of these answers are no, talk to us! Data Facts offers a full suite of background screening and monitoring solutions that empowers HR managers to hire smarter, easier and faster. Data Facts is the piece of the puzzle that will make your background screening process complete.

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