August 2015 issue

Volume 5 : Issue 8 TM

www.HRProfessionalsMagazine.com

1095-B or 1095-C? That is the

Question.

Your Top Retirement Plan Compliance Issues – According to the IRS and the DOL

Management

Smackdown: Proposed

FLSA Regs!

Sally

Roberts,

SHRM-SCP, SPHR

Preview of

Director of Georgia SHRM State Council

SHRM

Fall Conferences Highlights of

2015 SHRM Conference in Las Vegas

JUST PUT IT ON THE COMPANY CARD…NOBODY WILL NOTICE.

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THEY’RE WORRIED ABOUT OVERTIME. I’M JUST WORKING OFF THE CLOCK.

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What you don’t hear can still hurt you.

The things employees say when you’re not around can cause legal troubles for you. Fisher & Phillips provides practical solutions to workplace legal problems. This includes helping you find and fix these kinds of employee issues before they make their way from the water cooler to the courthouse.

1715 Aaron Brenner Drive • Suite 312 • Memphis, TN 38120 • 901.526.0431 www.laborlawyers.com

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Bringing Human Resources & Management Expertise to You

15%

of all HR job ads now require the new SHRM certification according to HRJobs.com. www.HRProfessionalsMagazine.com Editor

Cynthia Y. Thompson, MBA, SPHR Publisher

The Thompson HR Firm HR Consulting and Employee Development Art Direction

Park Avenue Design Contributing Writers

Bruce E. Buchanan William Carmichael Harvey Deutschendorf Tom Hayes Samuel A. Henson Jimmy Hinton Jennifer Kiesewetter Susan McCullah Chris Menard Ricky Reynolds Blake Rogers Cammie Scott Charles Sims, Jr. Jonathan A. Segal Catherine Schuck Joseph R. Ward III Jeff Weintraub Board of Advisors

Austin Baker Jonathan C. Hancock Ross Harris Diane M. Heyman, SPHR John E. Megley III, PhD 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. ©2011 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 4 note from the editor 5 Profile: Sally Roberts, Director of SHRM Georgia State Council 18 Highlights of 2015 SHRM Conference in Las Vegas 22 Attack Bullying Without Being Attacked 24 Standout 2.0: A Book Review 25 50,000 HR Professionals Have Obtained New SHRM Certifications

WEB EXCLUSIVES HTTP://HRProfessionalsMagazine.com /Exclusive

Departments

10 DOL: Management Smackdown – The Proposed FLSA Regs!

12 Background Screening: Who is the Unseen Risk to Your Workplace?

14 Risk Management: Audit Your Auditor – DOL Study Calls for Better Scrutiny 20 Healthcare Reform: Access vs. Affordability 26 FLSA: Timekeeping 101 34 NLRB: Joint Employment Relationships 36 EQ: 7 Habits of People Who are Happy 37 Voluntary Benefits: Optimism vs. Realism 38 Immigration: Record Fines by ICE

Retirement Planning & Compliance 28 Are Your Employees Prepared for Long-Term Care Expenses?

30 To 1095-B or 1095-C – That is the Question 32 Your Top Retirement Compliance Issues

Industry News 6 31st Annual KYSHRM Conference in Louisville 7 23rd Annual TNSHRM State Conference & Expo in Chattanooga 8 SHRM-Memphis HR Excellence Awards 16 SHRMGA 2015 State Conference in Savannah 27 14th Annual Employment Law and Legislative Affairs Conference in Little Rock

Next Issue

HR Technology – Payroll and Human Resource Information Systems www.HRProfessionalsMagazine.com

3

a note from the Editor

We are welcoming SHRM Georgia to our distribution footprint with this issue! I am looking forward to meeting Sally Roberts, Director of the SHRM Georgia State Council, at the Georgia SHRM State Conference in Savannah August 30 – September 1. Georgia has 18 SHRM Chapters! HR Professionals Magazine is distributed in Tennessee, Arkansas, Kentucky, Mississippi and now Georgia!

The SHRM Georgia State Conference will kick off the fall SHRM Conference season, followed by the ARSHRM ELLA Conference in Little Rock September 17-18, then the KYSHRM State Conference in Louisville September 23-25, and lastly the TNSHRM State Conference in Chattanooga October 7-9. We are proud to be official media sponsors for each of these events. You can find detailed information about all the conferences in this issue.

Cynthia and Marcus Buckingham at the Launch Party in Las Vegas for his new book, Standout 2.0

H

ow exciting to be an official media sponsor of the SHRM 2015 Annual Conference and Exposition in Las Vegas on June 28-July 1! We are

bringing you highlights from the Conference in this issue. There is a great photo layout of some of the top speakers from the Conference including the keynotes on Pages 18-19. We were up close and personal with Dr. Wayne Cascio and Dr. Alexander Alonso with SHRM for a discussion about the new SHRM certifications. You can read all about it on Page 25. I am delighted to bring you

The emphasis this month is on retirement planning and compliance.

We have three outstanding articles by subject matter experts Jennifer Kiesewetter, Cammie Scott, and Charles Sims, Jr. And I know you have been anxiously awaiting an article explaining the new DOL proposed regs on the Fair Labor Standards Act. Special thanks to Jeff Weintraub for this very informative article.

I’m looking forward to our next Online HR Certification Exam Prep Class that begins on August 17. There is still time to register on our website, www.hrprofessionalsmagazine.com. Remember if you receive your HRCI certification during the fall exam window, you will be eligible for SHRM’s tutorial pathway to obtain the SHRM-CP or SHRM-SCP as long as you take it by December 31, 2015. It’s like getting two certifications for the price of one!

And watch your email for our next complimentary HRCI | SHRM Virtual Event sponsored by Data Facts. If you are not currently receiving our monthly invitation, you can subscribe on our website at www.hrprofessionalsmagazine.com or send me an email.

Jonathan Segal’s excellent article on bullying and harassment on Page 22. Jonathan’s presentations are always entertaining as well as educational. It was so much fun attending the Launch Party for Marcus Buckingham’s new book, Standout 2.0. I know you will enjoy the book review on page 24.

Sign up for our RSS News Feed to receive up to the minute HR Alerts on changing legislation affecting our workforce. www.HRProfessionalsMagazine.com.

4

www.HRProfessionalsMagazine.com

Editor | Publisher cynthia@hrprosmagazine.com

Sally

on the cover

C. ROBERTS

SALLY C. ROBERTS, MBA SHRM-SCP, SPHR Director of SHRM Georgia State Council Sally C. Roberts, MBA SHRM-SCP, SPHR is the Director of Human Resources for multiple divisions of Morris Communications Company headquartered in Augusta, Georgia. She supports employees in 23 states who work in the Magazine division, which includes titles such as Where, In New York, Charlotte Magazine and St. Louis Bride. She

Sally holds an MBA from

also supports the Radio division. She provides HR for these areas as well as acts as a liaison

Georgia State University,

between Morris Communications and their benefits providers.

Atlanta, Georgia and a BA degree from Erskine College, Due

Sally has enjoyed the field of Human Resources for over twenty years. She began her HR

West, South Carolina. She is

career with Promina Health Systems in Lawrenceville, Georgia. After moving to Augusta,

certified as a Senior Professional

she became HR Director for Brandon Wilde, a Continuing Care Community. She joined

in Human Resources (SPHR)

Morris Communications as HR Director in 2005.

and holds her SHRM-SCP. She was recently recognized as a

Sally has held various volunteer positions with local SHRM chapters, including Legislative

Woman to Watch by WAGT 26,

Chair and President. During her term as President, the CSRA SHRM received a Pinnacle

Augusta. In her spare time, if her

Award for their partnership with Richmond Country drug court. She continues as a

children Alex and Maya have a

frequent volunteer with this program. On a state level she has served on the SHRM

ball game or performance, she

Georgia Government Affairs Committee and currently serves as SHRM Georgia State

can be heard cheering them on!

Director. She has participated in meetings with both state and federal legislators including participation in the SHRM GA Annual DC Fly In for the past five years. In April 2015 she testified at the U.S. House Committee on Education and Workforce Subcommittee on Health, Employment, Labor and Pensions’ hearing on the challenges employers are facing in implementing the Affordable Care Act. ď Ž

www.HRProfessionalsMagazine.com

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Conference and Exposition We welcome you to be a part of the 23rd Annual Tennessee SHRM Conference and Exposition that will be hosted by the SHRM Chattanooga Chapter, an affiliate chapter of the Society for Human Resource Management. This exciting, educational event will afford attendees the opportunity to learn and network with over 600 HR professionals from across the state and surrounding areas.

Dan Pink

Thurs., Oct. 8th General Session

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We are pleased to be serving as your conference committee and happy to bring you this exceptional Conference.

Frances Flowers, SPHR Conference Co-Chair

Valerie Gifford, SHRM-SCP, SPHR, CEBS Conference Co-Chair

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September 9 • 7:00-9:30am Holiday Inn - University of Memphis www.shrm-memphis.org

Speaker, Trish Holliday, M.A., SPHR, SHRM-SCP Special thanks to our presenting sponsors:

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NT : MANAGEMOEW N D

SMACK

the Proposed F LSA Regs!

By JEFF WEINTRAUB

200%. 200%... 200%?! That’s the percentage increase in the minimum

salary threshold proposed by DOL for overtime-exempt status, which will bump the threshold from the current $455/week, or $23,660/year, to $921/week, or $47,892/year. We think DOL’s goal has little to do with its stated rationales; rather, it looks to us like DOL just wants to reduce the number of exempt employees. For the doubters among us, please note that some estimate that an additional five million previously exempt employees will now become non-exempt. And yes, all other things being equal, that means that employers will owe a lot more overtime—in fact, Labor Secretary Perez estimates that these five million workers will put in their pockets an extra $1.2-1.3 billion. And that, folks, in rassling lingo, is a smackdown!

Further, the “highly compensated employees” exemption goes from $100k to $122,148.

Not only that, but DOL, for the first time ever, is indexing the minimum exemption threshold, to “guard against the erosion” of the present threshold—DOL suggests that this might mean, by early 2016, an increased threshold, to $50,440. DOL is seeking input as to whether it should index to the consumer price index or to a fixed earnings percentile.

Labor Secretary Perez states that the proposed regs will “modernize and streamline” the exemption regs. The quoted phrase should be interpreted: lots more non-exempt employees….

However, before anyone gets too incensed at the current Administration, bear in mind that it was the Bush Administration in 2004 that raised the threshold from $155/week to $455/week, thereby setting the stage for the current cage match!

What Might Happen Supposedly, the new rules were designed to prevent scofflaw employers from giving basic supervisory tasks to low-level managers, who work additional hours with no overtime pay. But what may also happen is that companies will fire managers, eliminate managerial positions, and cut hours to avoid overtime. Also, management often promotes lower-level supervisors to manager positions or higher—that evaluation stage now may be degraded or lost, making it more difficult for supervisors to promote into higher management levels. Secretary Perez doesn’t seem to grasp the possibility of difficult circumstances for many of the affected workers—he notes that, where employers have to cut new overtime costs (to remain competitive), the employees will have “the gift of time” that they will be able to spend with their families; one wonders if the “gift of time” will offset the loss of income to these workers or even the loss of their positions.

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Secretary Perez posits that companies will likely have to hire more employees to make up for the hours that presently supervisors are working for free, but this mindset fails to recognize that many companies already stretching to remain competitive in a global economy are not going to simply hire lots more workers—some companies are going to be forced to lay off workers to remain competitive, and some companies may simply give up the fight and close down, costing the American economy yet more jobs.

The notion that giving employees more benefits by piling more costs onto employers, frankly, is one of the root causes for many companies’ losing the ability to compete globally against employers that don’t have to follow such rules. Yes, we all truly want a better world for workers, but we can’t get there in today’s international marketplace by crushing our employers under ever-increasing burdens and costs.

What DOL is Not Changing (Maybe…)

Currently, the FLSA’s white-collar exemption exempts from overtime pay over 40 hours those employees who work in real executive, administrative, professional, and outside-sales positions, where the employees have true managerial or administrative duties or work in positions that require advanced levels of knowledge.

DOL did not include in its proposed rules a tightened requirement that an employee could not be exempt unless he/she performed exempt duties at least half of his work time. That was a concern among employers who have employees whose primary functions are to perform management-type duties or administrative tasks, yet they sometimes do other work as well.

Don’t celebrate this one yet, however, since DOL also has said that it might consider adding this and other requirements to the Final Rule, and it is seeking input as to whether the present duties tests should be modified. We think it likely that DOL will modify the duties test.

Words to the Wise After the proposed rules are published in the Federal Register, you can, of course, make your own comments and send them to DOL (http://www. regulations.gov ). If you don’t wish to engage in that sort of exercise in futility (with the 2016 elections not too far away, it will be difficult for conservatives to try to directly block these rules, with millions of now-exempt employees looking to make significantly more money from the changes), then, as an employer, you’ll want to start getting ready for the new rules to go into effect, possibly this coming January. Perform an audit of your exempt workforce and consult with employment counsel as to any individuals you are not certain are exempt. By the way, you shouldn’t audit merely by position, but rather by individual as well—it might be that you have three administrative employees that you’ve long assumed are exempt; but once you review each’s job duties, you may realize that one of the three clearly is no longer exempt because her duties have changed over the years.

If you have managerial employees who also work with their hands or perform other non-managerial tasks, consider eliminating or greatly reducing their non-managerial duties. There are a number of other ways you can firm up an employee’s exempt tasks to increase the likelihood that DOL or a plaintiffs-side attorney will agree that the employee is legitimately classified as exempt.

Consider, in close cases, converting an employee you have deemed exempt into an hourly, non-exempt employee. Careful conversion doesn’t have to mean that you’ll be paying more money for the same work.

As to your non-exempt employees, if you have an automatic lunch exclusion but may have difficulties ensuring that your employees take their full, uninterrupted lunches, consider doing away with the automatic lunch exclusion—it’s an invitation for a collective (class) action to be filed against you.

The End Game Let’s fact facts: these changes—whenever they are actually implemented by DOL—are not going to help your business. So, we encourage you to start thinking now about how you’re going to make the appropriate changes in your compensation plans. The good news is that, in general, all employers (at least employers in this country) will be on the same playing field.

Undoubtedly, we’ll hear from clients that their competitor isn’t going by the same rules as we recommend you follow—I’ve heard that lament my whole career. But all that means is that your competitor simply hasn’t gotten sued yet by DOL or by a collective-action law firm. For example, for decades, Memphis law firms did not pay overtime pay to their paralegals—our firm did; eventually, the other firms were forced to change too to comply with the law.

In other words, don’t rassle with DOL— the matches are rigged!

Jeff Weintraub, Managing Partner Fisher & Phillips, LLP jweintraub@laborlawyers.com www.laborlawyers.com www.HRProfessionalsMagazine.com

11

BACKGROUND SCREENING: Who Is the Unseen Risk to Your Workplace?

By SUSAN MCCULLAH

When asked whether or not they perform background screening on new hires, most businesses would say “Yes.”

These employees are subject to the same stresses and issues. Contract workers are people just the same as full-time employees. They have the same financial stresses and are just as likely to have a drug or alcohol problem, or a criminal history. Issues like these can push a person to steal or commit fraud, especially if they have opportunity and think there is a high likelihood they won’t get caught.

Companies need to put a priority on who is allowed on their payroll, in their place of work, and access to potentially sensitive and valuable information. It is just as important-maybe even more so-to put measures in place to “weed out” any temporary, outsourced, or contract worker who poses a risk to the workplace.

What to do: here are three tips to increase the chance of contract employees being screened properly.

WHO?

It is estimated over 90% of companies did some sort of pre-employment screening before hiring an applicant. Pre-employment background screening is a broad term that encompasses criminal checks, assessment testing, drug screening, and education and employment verifications. Properly utilizing a screening program protects a company from the risk of dangerous or unqualified hires, huge liabilities, and safety issues.

Make sure the contract company performs a background check. Review your contract with all outsourced companies that are your vendors. As part of service contracts, you should insist on screening as part of any agreement. Require that it clearly states the contract company is required to conduct background screening through a reputable third party background screening provider.

So, if they answer “yes”, the company is protected, right?

WHAT?

Not if you are letting contract and temporary workers slip through the cracks.

Your vendors must be thorough. A simple database search won’t fill the bill to ensure safe, trusted staff. Ask your vendors to list the specific types of information they collect on new hires. Good answers are county searches, drug testing, and employment verification. Bad answers are “a database search” or “we hire with our gut.”

The majority of companies have people on their premises that are outsourced staff or sub-contracted workers who are not officially “company employees.”

These are people who are employed by other companies, but provided as a service. Examples of these are office cleaning people, guards, gardeners, etc.

Sub-contracted or temporary employees offer positive benefits to the company culture. They provide the company with flexibility, nice grounds, and customer service during temporary busy periods, to name a few.

WHEN?

While all that is positive, these non-permanent employees can also be a detriment to a company’s safety and security if not screened properly. These individuals pose as much risk as any permanent staff member and very often are even more of a potential threat.

Find out how often the company screens their staff. A red flag should go up if the vendor says they screen before hiring, and then they never conduct screening again. If their employees work there for several years (which is a good sign most of the time), who knows if they have been involved in high risk, illegal activities such as drug use? Look for contract outsourced companies that perform periodic screening in addition to pre-employment checks.

Here are five valid reasons why these employees are a concern:

If you ask these questions and don’t like your vendor’s answers, consider….

The contract company may be cutting corners. The contract company could save a few dollars by not conducting proper background checks on their workers. They could possibly decide to not use a third party company that specializes in screening, opting to ‘do it themselves’. They could also run a background check that is not thorough or accurate. These supposed “cost-saving” decisions produce a greater likelihood of missing crucial information about the employee’s background.

….WHERE?

These employees have just as much access. Outsourced, temporary, and contract staff often have free reign of the building. They have access to areas restricted to employees only. Cleaners, for example, have access to offices where sensitive information may be stored. Plant watering people have the same ability to roam freely through most company buildings. A dishonest person could have a heyday with this much freedom.

These employees are often less supervised. Contract workers frequently work after hours when company management is absent from the office.

Cleaners and night guards, for example, are usually in the building when very few people are present. Again, this gives them even more opportunity to look through files for sensitive information than the average, full-time employee. A person of dubious character could hit a jackpot of valuable information from credit card numbers to sensitive company secrets, all without the company’s knowledge.

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Screen contract employees in-house. Conduct background screening on any and all employees who work for the company in the same manner, whether they are regular employees, outsourced or contract employees.

This option is a little more costly to your company, however, you benefit by maintaining complete control over the screening process. You can choose the reputable third party background screening company that screens the employee AND the types of checks that you feel are appropriate. This process will help you maintain control, and minimize the risk of a bad hire and unsafe workplace.

Pre-employment screening is an integral part of today’s safe hiring process, as it minimizes the instances of turnover while offering a shield from litigation avoidance. It’s important to make certain ALL employees are screened in a proper, consistent manner. Putting these actions into place can reduce the risk of lawsuits, bad press, and safety issues.

Susan McCullah Product Development Director susan@datafacts.com www.datafacts.com

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Audit Your Auditor DOL Study Calls for Better Scrutiny

Audit Your Auditor

Retirement Services

DOL Study Calls for Better Scrutiny

In a Department of Labor (DOL) review of annual ERISA

By SAMUEL A. HENSON, JD

audits, two out of every five contained deficiencies significant enough to get them rejected. Anticipate increased enforcement in this area, and rethink your annual plan auditor In a Department of Labor (DOL) review of annual ERISA audits,

selection process.

two out of every five contained deficiencies significant enough

Choosing an rejected.

Auditor to get them Anticipate increased enforcement in this

AUTHOR SAMUEL A. HENSON, JD Vice President, Director of Legislative & Regulatory Affairs 816.751.2245 shenson@lockton.com

T H E DOL’ S ST UDY Focused on 2011 filing year: 400 plan audits from a

It has become commonplace to vet plan providers process. with a area, and rethink your annual plan service auditor selection thorough, prudent, and documented process. From advisors to

potential 81,162 Form 5500 filings were reviewed

record keepers, most plan administrators use a formal request

Choosing an Auditor

for proposal (RFP) and then conduct selections via due diligence It has become commonplace vet audit’s plan service providers with a thorough, in-person presentations.

Due totothe importance to plan prudent, and documented advisors to record compliance, this same processprocess. appliesFrom when selecting yourkeepers, most plan administrators use a formal request for proposal (RFP) and then conduct

independent qualified public accountant (IQPA). In addition,

Of the 81,162 filings, 7,330 different CPA firms conducted the audit work

selections via due diligence in-person presentations. Due to the audit’s

the DOL’s 2012 Service Provider Fee Disclosure Rules require

importance to plan compliance, this same process applies when selecting

61% of the

your independent qualified public accountant (IQPA). In addition, the

audits fully

DOL’s 2012 Service Provider Fee Disclosure Rules require plan fiduciaries to

complied with

continuously ensure that the plan pays only “reasonable” compensation for

professional

plan fiduciaries to continuously ensure that the plan pays only

“reasonable” compensation for the audit expense. Reasonableness

of fees must be analyzed based on service quality. Hiring an auditor

withoutthe specialized knowledge of retirement or the skills necessary audit expense. Reasonableness of fees must be analyzed based on service to perform plan audits can lead to a violation these rules.

Best or quality.

Hiring an auditor without specialized of knowledge of retirement practices selecting include: thefor skills necessaryan to auditor perform plan audits can lead to a violation of these

auditing standards or had only minor deficiencies

rules. Best practices for selecting an auditor include:

members good standing of AICPA’s Employee andin qualifications as a CPA—actively seek auditorsBenefit who arePlan Audit Quality membersCenter. in good standing of AICPA’s Employee Benefit Plan

Audit Quality Center.

Selecting a specialized auditor with a great deal of experience in

ERISA audits. v plan Selecting a specialized auditor with a great deal of experience in

ERISA plan audits. auditor without financial interests Choosing an independent

in the plan or the plan administrator that would affect their

v Choosing an independent auditor without financial interests in the

objectivity.

plan or the plan administrator that would affect their objectivity.

14

www.HRProfessionalsMagazine.com

major deficiencies which would lead to rejection of a Form 5500 filing

$653 billion and 22.5 million plan participants and beneficiaries

that istechnical repeated on a three- towith five-year basis.

Evaluating expertise special emphasis on licensing

andv qualifications as a CPA—actively seek auditors who are Evaluating technical expertise with special emphasis on licensing

audits contained

The DOL believes the deficiencies put

Conducting a formalized RFP process, with well-documented criteria, that is repeated on aRFP threeto five-year basis. v Conducting a formalized process, with well-documented criteria,

+39B 61

39% of the

at risk Audit firms who performed the

B 88 + 12

+24B 76

76% deficiency rate and tended not to

fewest number of audits had a

be Employee Benefit Plan Audit Quality Center members

Audit firms performing the most

deficiency rate of only 12%

plan audits had a

of their auditor in preparing the report, but that trust should not be blind. Plans are extremely complex, and mistakes will

Reviewing the Audit occur. The auditor’s job is not to rubber-stamp your plan, but to seek out and identify mistakes. your auditor does Plan administrators often trust those the expertise andIfdiligence of their auditor in preparing the over multiple years, it may indicate that you and mistakes will occur. report,not butfind thatissues trust should not be blind.

Plans are extremely complex, The auditor’s not to rubber-stamp yourAccording plan, but totoseek and identify those mistakes. If shouldjob digisdeeper into its process. theout DOL, your auditor doesaudit not find issues over multiple years, it may areas: indicate that you should dig deeper common deficiencies occur in the following into its process. According to the DOL, common audit deficiencies occur in the following areas:

PARTICIPANT DATA:

CONTRIBUTIONS:

PROHIBITED TRANSACTIONS:

Ƚ Obtain proper documentation

Ƚ Reconcile payrolls with allocation of contributions

Ƚ Identify related parties

Ƚ Test payroll data Ƚ Review participant accounts for eligibility, forfeitures, and allocation accuracy

INVESTMENTS: Ƚ Test and disclose fair value measurements Ƚ Obtain proper certification for a limited scope audit Ƚ Evaluate investment contracts for benefit responsiveness Ƚ Disclose investments representing 5% of the net plan assets

Ƚ Test employer contributions in multiemployer plans Ƚ Identify compensation definition errors

Ƚ Examine related party transactions for potential prohibited transactions

Ƚ Document internal payroll controls

Ƚ Complete work papers

Ƚ Rely appropriately on SOC 1 Reports

MISCELLANEOUS AREAS:

DISTRIBUTIONS: Ƚ Test participant eligibility to receive benefit payments or distributions

Ƚ Properly value employer stock

Ƚ Follow required approval processes for benefit payment

Ƚ Obtain common collective trust fund unit values

Ƚ Process required minimum distributions timely

Ƚ Investigate inconsistencies in the custodian’s reports and schedules

Ƚ Properly handle receipt of benefit payment checks

While it is certainly not suggested that the plan administrator test all aspects of an audit report, it is advisable to discuss these areas in the report.

A simple checklist and a confirmation with the auditor that each was properly reviewed creates helpful documentation of your fiduciary duty.

Next Steps The DOL recognizes the auditor as an expert, but they are not an ERISA fiduciary. If errors result in harm to participants, the plan administrator will be held accountable. Many plan administrators must rethink simply handing the keys over to an auditor and the plan record keeper. If this DOL report gives any indication of their concern, enforcement follows soon. A diligent auditor selection process and a review of their work should be incorporated into your fiduciary governance process.

Ƚ Obtain financial statements and disclosures

Ƚ Understand plan testing requirements on a limited scope audit Ƚ Properly use the limited scope audit when the financial institution did not qualify for an exemption Ƚ Adequately disclose in participant directed plans Ƚ Complete plan descriptions in SPDs

Audit Requirements 2 ERISA requires that large plans (generally 100 or more eligible employees) obtain a written audit opinion of an independent qualified public accountant to accompany the Annual Report Form 5500 (Form 5500). ERISA holds fiduciaries responsible for ensuring that a plan is properly audited, and any breach of that responsibility may hold the fiduciary personally liable to restore any losses to the plan. There is a significant amount of risk to plan administrators associated with the audit, as the DOL has implemented significant enforcement strategies with respect to identifying audit deficiencies, and penalties can be substantial for plan administrators. The DOL has the right to reject plan filings and assess penalties of up to $1,100 per day, without limit, for deficient filings.

If you have questions, please contact your Lockton Retirement Services team.

Ashley Pace

Lockton’s Memphis Office 901 757 6902 apace@lockton.com

Brad Owens

Lockton’s Memphis Office 901 757 6901 bowens@lockton.com

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SHRM 2015 ANNUAL CONFERENCE & EXPOSITION

HIGHLIGHTS June 26 - July 1 • Las Vegas

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4 1 Hank Jackson, CEO of SHRM, at the Opening General Session. 2 Brian D. Silva, Chairman of the Board of Directors for SHRM. 3 Juana Hart, Business Communication Consultant, was the mistress of ceremonies for the conference and opened each general session introducing the key note speakers. 4 Mike Coach “K” Krzyzewski, head men’s basketball coach at Duke University, spoke about leadership lessons from his experience as winningest coach in the NCAA Division 1 history. 5 Marcus Buckingham, Founder, TMBC, author of seven business books, spoke on his newest best seller, “Standout 2.0.”

6 Mika Brzezinski, talk show host on Morning Joe, discussed how women can assess and attain their true value.

7 7 Dr. Oz, medical expert and TV host, spoke on how to take charge of your own health. 8 Mike Aitken, SHRM VP Government Affairs, discussed “The Washington Outlook: The Impact of the 114th Congress and the Obama Administration on HR’s Public Policy Agenda.” 9 Jonathan Segal, partner, Duane Morris, LLP, Philadelphia, PA, spoke on “Systemic Approach for Stamping Out Harassment.”

10 Valerie M. Grubb, president, Val Grubb & Associates, LTD., NY, presented a pre-conference class on “Preparing to Lead: Critical Project Management Skills for the HR Executive.” 11 Alexander Alonso, PhD, SHRM-SCP, VP Research & Certification SHRM, Alexandria, VA, discussed “The Difference Between Knowing and Doing – Why It Matters for SHRM Certification.”

12 Kathleen McComber, SHRM-SCP, CCP, SPHR, CHRO, University of Arkansas for Medical Services, Little Rock, AR, spoke on “Violence in the Workplace: A Personal Experience.” 13 Tammy McCutchen, principal, Littler’s Workplace Policy Institute, Washington, DC, presented “Working on Overtime: What Will New FLSA Rules Mean for Employers?”

14 Penn Jillette, magician and comedian who is known for his work in the magic duo Penn & Teller, was the opening session speaker. 15 Ryan Kohler, SPHR, CEO, ApplicantPro, Eagle Mountain, UT, presented “Understanding Metrics: How to Connect HR’s Goals to Your Business Strategy.” 16 Amy Edmondson, Novartis professor of Leadership and Management, Harvard Business School, Cambridge, MA, spoke on “How Organizations Learn, Innovate and Compete in the Knowledge Economy.”

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Healthcare Reform: Access versus Affordability

By TOM HAYES

We see it virtually every day in the news. The government releases employment numbers or financial forecasts based on housing starts, home loans or automotive sales. Then the political pundits on both sides of the isle square off on the cable news channels to put a spin on the reports in an effort to support their positions.

Data, regardless of its form, can be interpreted many ways. Predictions based on insufficient data can lead individuals, or organizations, to frame a positive narrative around what is but a portion of the truth. This has certainly been the case with the Affordable Care Act (ACA) and the positive spin on enrollment numbers presented each spring by the Department of Health and Human Services.

If success is measured by improved access to health insurance to a demographic once excluded from coverage then yes, the ACA has been a success. If success is measured by enhancing affordability through the extension of federal subsidies to individuals and families demonstrating financial need then yes, the law has been successful – to date.

But how many individuals now covered through the Federally Facilitated Marketplace (FFM) lost their private insurance a year ago because of the health reform law? How long will coverage remain affordable as healthcare costs and utilization increase? What happens if the Supreme Court strikes down financial subsidies later this month for individuals buying coverage from exchanges operating in 34 states?

Data supports that access to health insurance has been improved by the healthcare law. What is not supported by data is that the law has, or will have, a positive impact on reducing healthcare costs over time or improve the quality of care for millions of Americans.

Case in point is the announcement this month by BlueCross BlueShield of Tennessee that it is proposing to raise premiums by more than 36% next year. It was touted an early success because more than 230,000 citizens enrolled via the federal exchange last year and BCBS picked up almost two-thirds of them. Even with critical mass the insurer admitted it underestimated claims filed by the new customers, losing more than $141 million last year. While national estimates indicate that health premiums within the exchanges will rise on average 10% next year, that seemingly modest number applied to a $500 per month premium will mean an additional $600 per year in costs.

What is not addressed in the healthcare law is behavior and what I call a “rental car” healthcare system. The more we continue to suppress the true costs of healthcare through subsidies and even co-pays, the less likely individuals will take ownership of their healthcare costs. The U.S. Census Bureau recently published new estimates The U.S. Census Bureau on health spending that recently published new illustrate a 7.3% increase estimates on health in the first quarter of 2015 spending that illustrate a over the same period last 7.3% increase in the first year. Hospital spending this quarter of 2015 over the year alone has increased by 9.2%. The survey found same period last year. that greater use of health services as well as more people covered by the ACA are the primary cost drivers with individuals using more physician and outpatient services again as the economy improves.

A storm brewing on the horizon that has the potential to derail healthcare financing at both the public and private level is specialty pharmaceutical spending. A prime example is the national TV announcement last week about a new cholesterol-lowering injectable with greater results and reduced side effects over existing statin drugs such as Lipitor and Crestor. While a generic version of Lipitor exists today at a very reasonable cost, this new breakthrough treatment for lowering bad cholesterol is expected to cost upwards of $10,000 per year.

Specialty drugs are on the rise and we are already seeing the financial impact on employer-based health plans. Spending on these drugs, estimated at $55 billion in 2005, is expected to rise to $1.7 trillion in 2030, according to the Pharmaceutical Care Management Association.

Estimated to reach $400 billion by 2020, one class of pharmaceuticals alone could account for 10% of the total health spend in just five years.

So while the law is titled the Affordable Care Act, keeping it that way will be a challenge. Improved access to healthcare doesn’t mean improved healthcare. Absent a strategy to address cost and quality, access will be a moot point.

Tom Hayes Certified PPACA Professional Employee Benefits National Practice Leader Regions Insurance, Inc. tom.hayes@regions.com www.regionsinsurance.com 20

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Can we charge employees more if they are tobacco users?

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How would we verify if they quit?

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The definition leaves much to interpretation. Is it a derogatory remark to say that someone is a weak performer? Is it intimidating to tell employees in a direct and cold way that their jobs are on the line if they don’t make necessary improvements?

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Attack Bullying

As well-intended as these laws may be, the definitions they use could result in poor performers coercing managers into not managing them. Just as harassment claims are sometimes made when there is no harassment, we should anticipate the same with bullying.

Without Being Attacked How to take down bullies without opening up your company to legal risk.

By JONATHAN A. SEGAL

Nobody likes a bully—but people often struggle to define exactly what bullying is. Like the former Supreme Court Justice Potter Stewart once famously said of obscenity, most people know it when they see it even if they can’t define it. The closest any state has come to addressing bullying is California, which has mandated training on “abusive conduct.” Yet even that law requires only training. It does not change California’s nondiscrimination laws to ban bullying per se. In California, bullying is still lawful unless it is based on prohibited factors such as race, gender, religion, national origin, age, sexual orientation or disability. The same is true under federal law and every state law.

In other words, it’s not unlawful to bully an individual merely because he or she is a competitor, for example, or to be an equal-opportunity bad manager who bullies everyone.

But while bullying isn’t unlawful, your workplace doesn’t need to stand for it. Unfortunately, it’s harder than you would think to create an anti-bullying policy because of the rights employees have under the National Labor Relations Act (NLRA), potential contractual rights, and the risk of conscious or subconscious bias.

So don’t get out your boxing gloves quite yet. Fighting bullying takes planning and fancy footwork.

STATE LEGISLATION Since 2005, legislation to make “abusive conduct” unlawful unrelated to any protected status has been introduced in approximately 27 states and two territories (Puerto Rico and the Virgin Islands).

Virginia and Florida became the most recent states to entertain such a bill (both in 2015). So far, the legislation has failed across the board, even in states that are very protective of employee rights, such as California, Connecticut and Maryland.

In fact, anti-bullying legislation likely would lead to a cottage industry of litigation. What one person may view as slightly raising his voice to make a point may be perceived by another as yelling.

REAL IMPACT Still, we cannot ignore that a large percentage of employees claim to have been bullied. While I have seen different numbers, CareerBuilder.com pegged it at 35 percent in 2012.

The impact of bullying can be substantial on the victim, both emotionally and physically. It can also have an adverse impact on witnesses who fear they will receive the same treatment.

And, of course, bullying hurts companies. While it may increase productivity in the short run, it will hurt it over the long haul due to the resulting lack of engagement and increased turnover. Who wants to work where they are demeaned?

MANAGING LEGAL RISKS In drafting policies that prohibit bullying, employers need to consider the following material legal risks:

In 2014, New Hampshire and Puerto Rico passed laws that would have prohibited abusive conduct without regard to protected status, but both bills were vetoed. That was the same year California mandated that supervisors receive training about abusive conduct without regard to protected status, although it didn’t make such behavior unlawful.

NLRA risks. An anti-bullying policy that is too general may be deemed as chilling protected concerted activity under the NLRA. As we all know, the National Labor Relations Board has attacked many policies that are designed to increase civility in the workplace as being unlawful.

(Please, employers: enough with this desire for civility!)

Having said that, I think we can anticipate that one of California’s plaintiffs’ lawyers will argue that the law reflects public policy and that any adverse action relating to bullying is unlawful. Watch for a wrongful constructive discharge claim—that is, “I was forced to quit because of the severe or pervasive bullying to which I was subjected in violation of California’s public policy.”

To address this problem, provide specific examples of what may and may not constitute bullying behavior so that a reasonable employee would not deem it to cover protected concerted activity.

So, California employers should take the new training requirement very seriously. In fact, everyone should take bullying very seriously.

The inclusion of some examples of what may constitute bullying will give you a strong contextual defense that a reasonable employee would not perceive the policy as prohibiting protected concerted activity.

DIFFICULT TO DEFINE Bullying that is unrelated to protected group status is unlawful in many countries, including Canada. In some countries, such as Poland, the prohibited conduct is called “mobbing.” Knowing international law is important because many businesses have facilities outside the United States.

It’s hard to imagine anyone arguing in favor of bullying, so why has prohibiting it failed in the United States?

The primary reason is the language in many of the proposed bills is quite vague. For example, consider the definition of abusive conduct under a bill introduced in New York in January 2015: “ ‘Abusive conduct’ means acts, omissions, or both, that a reasonable person would find abusive, based on the severity, nature and frequency of the conduct, including, but not limited to: repeated verbal abuse such as the use of derogatory remarks, insults and epithets; verbal, nonverbal or physical conduct of a threatening, intimidating or humiliating nature; or the sabotage or undermining of an employee’s work performance. It shall be considered an aggravating factor if the conduct exploited an employee’s known psychological or physical illness or disability. A single act normally shall not constitute abusive conduct, but an especially severe and egregious act may meet this standard.”

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Contractual risks. An anti-bullying policy may create quasicontractual obligations on the part of the employer.

If the employer says it will not tolerate bullying, a court may say it must live up to its “commitment.”

Of course, any policy should be part of an employee handbook that clearly states that the handbook is not a contract. The strength of the necessary disclaimer varies from state to state. But even that may not be enough.

Make clear in the policy that the definition of prohibited bullying is determined by the company in its sole discretion. By stating that bullying is what the company says it is, you reduce your risk of not adhering to your own policy.

BULLYING BEHAVIORS A policy prohibiting bullying should outline examples of behavior that might constitute bullying, such as:

➦ Mean-spirited “joking” designed to exploit an employee’s perceived weaknesses.

➦ Discussing an employee’s performance problems with the employee’s peers or subordinates.

➦ Yelling at an employee, whether alone or in front of others.

➦ Encouraging others to avoid an employee.

➦ Physical intimidation when speaking with an employee.

➦ Sabotaging an employee’s work. ➦ Insulting an employee’s family or friends.

Also, do not state definitively that any examples you include constitute bullying.

Instead, say they “may be” bullying depending on context, severity, pervasiveness and other factors as determined by the employer in its sole discretion.

Bias. Finally, an anti-bullying policy must be implemented in light of the potential for conscious or unconscious bias.

We know that a woman who is assertive—but no more assertive than a man—is often branded with a scarlet “B.” She may now be a double “B.” There could be bias toward men, too. For example, if a man uses positional rather than interpersonal influence, he may be called a bully.

TRAIN, TRAIN, TRAIN While a policy is a good start in addressing workplace bullying, it is not enough. Supervisors need to be trained on what may constitute bullying, either in a separate training session or as part of training on performance management and harassment—or both.

Regardless, the policy needs to make clear that supervisors must do more than discourage bullying. They must respond proactively to what may be bullying engaged in by subordinates or even customers and other third parties.

Sound familiar? It should. The same admonition should be provided in training on unlawful harassment.

Another aspect of harassment training also applies to bullying: Avoid the label and focus on the inappropriateness of certain behaviors.

The label “bully” carries with it an appropriate stigma, so an employee who is labeled a bully may get defensive.

The employee is more likely to make behavioral

changes if he or she is told that specific behaviors are inappropriate and must cease. Someone can argue with whether yelling at a person constitutes bullying, but it is much harder to contend that such behavior is acceptable when no label is attached to it.

Of course, if we want to make sure that we have bully-free workplaces, we must evaluate employees, particularly leaders, on how they treat others. Employees who engage in bullying or other disrespectful behavior should pay a price on their evaluations and perhaps in their compensation.

Indeed, sometimes bullying should be cause for termination. Firing a bully, even if that employee is valued for what she contributes to the bottom line, may send a more powerful message than any training could provide.

Jonathan A. Segal is a partner at Duane Morris LLP in Philadelphia.

Follow him on Twitter @ Jonathan_HR_law.

See more at: http://www.shrm.org/publications/ hrmagazine/editorialcontent/2015/0615/pages/0615workplace-bullying.aspx#sthash.hOv0HHE2.dpuf Reprinted with permission of the Society for Human Resource Management (www.shrm.org), Alexandria, VA. Copyright 2015, Society for Human Resource Management.

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M

arcus Buckingham’s StandOut 2.0 is a must read for anyone wanting to expand his or her understanding of their own inherent strengths as an employee. Managers too, need to read this so as to understand the unique traits of genius abiding within their staff. This easy-to-read and apply assessment guide explains in no-nonsense terms exactly how each of the “nine strength roles” fits into one’s own arsenal of management tools. Suffice it to say, I am impressed and that is not easy!

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Having spent over thirty years in management and leadership positions with corporate behemoths as well as small regional companies, I can safely say that I have taken every personality test or management and leadership assessment out there. And within higher education, my doctoral research involved either administering them, assessing their results, or making recommendations to organizational leadership about those assessments that should be considered for use within their company or those to stay away from. Very simply, StandOut 2.0 and the StandOut Assessment is one to embrace and use within your organization.

Standout 2.0 – A Book Review

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From a research and statistical perspective, I was pleased to find a section in the book that addresses these two key areas. And while some statistical jargon does exist, i.e.; Cronbach’s alpha, chi square, p values, risks of multicollienearity, t-scores, etc., it was not overdone. To be specific, those individuals with a strong knowledge-base of statistics will quickly appreciate the few tables given while those newer to the science will find it clear, concise, and well organized. It must be said, however, that most assessment instruments used today (personality tests or management reinforcement tools), typically approach their use from an applicational perspective only and forgo the statistical analysis that really makes the instrument truly robust. I was again pleased to find the StandOut Assessment contains the validity and reliability needed to stand the test of time, as well as the approval of state regulators for those in the human resources field.

An easy read (the majority of the book describes how each of the “nine strength roles” work), readers will find that the book itself has the look and feel of a “user-friendly” instructional job aid. Similarly, when it came time to complete my own StandOut Assessment, the site was easy to navigate through. There was a balanced layout for each section, the screen designs were aesthetically pleasing, and results were immediately identifiable. And from a personal perspective, my identified two strengths, although not entirely surprising, were none-the-less accurate!

It identified not just a career that matched my characteristics and talents, the assessment explained how I could use the information to make an immediate impact upon others, how I could take my performance to the next level, areas to look out for, and finally how to use this information to create positive influences upon those around me.

StandOut 2.0 is a necessary read for anyone wanting to better understand their strengths, finding an edge, and winning at work!

William Carmichael, Ed.D. Strayer University William.Carmichael@strayer.edu www.strayer.edu 24

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50,000

HR PROFESSIONALS HAVE OBTAINED SHRM CERTIFICATION

WAYNE CASCIO, PHD

Chair, SHRM Certification Commission

Legal Challenges are Coming at HR Professionals from Every Direction

ALEXANDER ALONSO, PHD, SHRM-SCP

VP for Research and Certification

At the 2015 SHRM Conference, members of the press were invited to hear Wayne Cascio, Ph.D, Chair of the SHRM Certification Commission, and Alex Alonso, Ph.D, SHRM’s VP Research and Certification Exams, speak about SHRM’s new certifications, SHRM-CP and SHRM-SCP. Approximately 50,000 HR professionals have become certified through SHRM’s tutorial pathway. According to Dr. Alonso, there were 1070 participants in the pilot tests of the SHRM certification exams. Those who passed this pilot are now certified. In addition to this group, several thousand people sat for the exams in the May – July 2015 exam window.

Dr. Cascio advised that SHRM has reached out to many of the Fortune 500 companies to introduce CEOs and C-suite members to the new certification explaining that it not only tests the HR professional’s knowledge about human resources, but also tests their ability to apply this knowledge through situational judgment type questions on the exam. Candidates for the SHRM-CP exam answer 160 questions (90 knowledge/40 situational judgment/30 field test items.) Candidates for the SHRM-SCP exam answer 180 questions (90 knowledge/60 situational judgment/30 field test items.) Recertification is required every three years.

That’s Why Rainey Kizer Makes Your Business Our Concern As the issues facing HR executives become more frequent, challenging, and complex each year, you need a law firm that provides advice individualized for your specific needs. This is why you should know the employment-law attorneys at Rainey, Kizer, Reviere & Bell PLC. For over 30 years, our AV-rated firm has advised businesses, nonprofit organizations, and government agencies on all aspects of employment law. To learn more, please call.

As a result of SHRM’s outreach, approximately 15% of all HR job ads now require the new SHRM certification, according to HRJobs. com. Dr. Alonso explained that the exam content is dynamic and will change every three years. This is in contrast to the current HRCI exams in which the content changes every five years.

The cost of the SHRM certification exams is $300 and includes the study materials, which is a bit less than the cost of the HRCI exam. HR professionals with at least 1000 hours of HR experience are eligible to take the exam. Those wishing to take the exam may purchase the self-study modules offered by SHRM or enroll in a certification exam prep class offered at many of the local colleges and universities.

An 11-member SHRM Certification Commission oversees technical aspects, including development of the exam, eligibility requirements and issuance of recertification.

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Time-Keeping 101: There’s No Time Like the Correctly-Recorded Time

T

By CATHERINE SCHUCK

here are many ways to run afoul of the federal Fair Labor Standards Act (“FLSA”) (29 U.S.C. § 201 et seq.) One of the easiest pitfalls to avoid, however, is failure to follow the law’s time-keeping and record-keeping requirements. The FLSA sets relatively straightforward and easy-

to-follow time-keeping and record-keeping requirements. Adhering to these requirements is a “must” for anyone managing payroll.

I. Time-Keeping Requirements Employers are required to keep accurate records of non-exempt employees’ hours worked. For most non-exempt employees, daily records should show the time the employee arrived for work, the time the employee left for a lunch or other unpaid break; the time the employee returned from the lunch or break; the time the employee left for the day; and the total hours worked for the day.

No particular format or method of time-keeping is required. According to the federal Department of Labor (“DOL”), “[e]mployers may use any timekeeping method they choose” (see U.S. Dept. of Labor, Wage and Hour Division, Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act). The DOL suggests that employers may “use a time clock, have a timekeeper keep track of employees’ work hours, or tell their workers to write their own times on the records.” The DOL’s list is not exhaustive; the DOL advises that “[a]ny timekeeping plan is acceptable as long as it is complete and accurate.”

Thus, depending on the employer’s situation and resources, an employer can choose the time-keeping method that makes the most sense. The important thing is that time be kept contemporaneously with the work being performed, to ensure the accuracy and integrity of the records. Automated time clocks or other electronic systems are nice (as long as they are accurate) but are not required. Having employees sign in and out on paper is also perfectly acceptable.

If an employer chooses to have non-exempt employees record their time by hand, the employer should instruct the employees to enter the exact time that they came and went. In other words, instead of just writing in at 8:00 and out at 5:00 every day, minus one hour for lunch, the employee should write the exact time, e.g. “in” at 7:58 and “out” at 5:04.

Note that if the employee is only supposed to work from 8:00 to 5:00, the employee does not have to be paid for time outside the scheduled work day, as long as the employee does not actually perform any work outside the schedule. So in the example above, if the employee is only supposed to work from 8:00 to 5:00, but she spends the first few minutes of her day getting coffee and the last few minutes checking her personal email, she can simply be paid from 8:00 to 5:00 (minus lunch). But it is important to record the actual time the employee arrived and left, again, to ensure that the records are accurate as required by the law.

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The FLSA also permits employers to round employees’ time to the nearest quarter-hour (29 C.F.R. § 785.48(b)). Employers may round to a smaller increment, e.g. 6 minutes or 10 minutes, if they choose.

But it is important that the rounding practice be designed to “average out” over time. In other words, an employer cannot always round down. The employer should choose the midpoint of the rounding window and adopt a consistent practice of rounding down where the time recorded is below the midpoint and rounding up where the time is above it. In other words, if the employer adopts a 15-minute window, minutes 1-7 can be rounded down but minutes 8-15 must be rounded up.

Finally, note that employers should not require exempt employees to record their hours worked each day. One of the requirements to maintain exempt status is that the employee be paid on a fixed salary basis. Deductions from the salary may only be made in limited situations, and must almost always be made in full-day increments (see 29 C.F.R. § 541.602). Requiring exempt employees to record hours worked can call the exemption into question and can destroy it if employees are actually paid by the hour instead of on a salary basis.

II. Record-Keeping Requirements The FLSA requires that employers keep records of hours worked, total earnings, total overtime, and additions to/deductions from wages for at least two years from the date of the last entry on the time record (29 C.F.R. § 516.6(a)(1)). Records may be kept in hard-copy or electronic form, as long as they are accessible within 72 hours of a request (29 C.F.R. § 516.1 and 29 C.F.R. § 516.7).

In addition to the time records, note that the FLSA also requires employers to maintain the following information for both non-exempt and exempt employees covered under the executive, administrative, and professional exemptions: full name; home address; date of birth if under age 19; sex; occupation in which employed; time of day and day of week in which workweek begins; regular hourly rate for non-exempt employees, and salary for exempt employees (see 29 C.FR. § 516.2 for specific record-keeping requirements for non-exempt employees’ time).

III. Conclusion There is no time like the present to ensure that your time-keeping and record-keeping practices comply with the FLSA.

Catherine Schuck, Attorney Wimberly Lawson Wright Daves & Jones, PLLC cschuck@wimberlylawson.com www.wimberlylawson.com

Are Your Employees Prepared

Long-term-care insurance may be used to help pay for skilled care, intermediate care, and custodial care. Most policies pay for nursing-home care, and comprehensive policies may also cover home care services and assisted living. Insurance can help protect your employee's family financially from the potentially devastating cost of a long-term disabling medical condition, chronic illness, or cognitive impairment.

Long-Term-Care Riders on Life Insurance A number of insurance companies have added long-term-care riders to their life insurance contracts. For an additional fee, these riders will provide a benefit — usually a percentage of the face value — to help cover the cost of long-term care. This may be an option for your employees.

How Likely Is It That Your Employees Will Need Long-Term Care?

for Long-Term Care Expenses?

By CHARLES SIMS, JR.

In general, Americans are not sufficiently prepared to pay for long-term care. Many of them go through their lives simply hoping that they won’t ever need it. Unfortunately, in the event that your employees or their loved ones does need long-term care, hope won’t be enough to protect them from potential financial ruin. Also, the odds that they will need some kind of long-term care increase as they get older.

Self-Insurance as an Option To self-insure — that is, for the employee to cover the cost themselves — they must have sufficient income to pay the rising costs of long-term care. Keep in mind that even if they have sufficient resources to afford long-term care now, they may not be able to handle rising future costs without drastically altering their lifestyle.

The Medicaid Option Medicaid is a joint federal and state program that covers medical bills for the needy.

If your employee can qualify, it may help them pay for long-term-care costs. Unfortunately, Medicaid is basically welfare. In order to qualify, they generally have to have few assets or will need to spend down your assets.

State law determines the allowable income and resource limits. If they have even one dollar of income or assets in excess of these limits, they may not be eligible for Medicaid.

To receive Medicaid assistance, an individual may have to transfer their assets to meet those limits. This can be tricky, however, because there are tough laws designed to discourage asset transfers for the purpose of qualifying for Medicaid. If your employees have engaged in any “Medicaid planning,” they should consult an advisor to discuss any new Medicaid rules.

Long-Term-Care Insurance A long-term-care insurance policy may enable your employees to transfer a portion of the economic liability of long-term care to an insurance company in exchange for the regular premiums.

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If your employees were to suffer an illness or disability that required long-term nursing care, would they be covered?

Maybe not. The vast majority of Americans go through their lives reassuring themselves that it will never happen to them.

However, if past trends continue, 43 percent of those aged 65 and older will spend some time in a nursing home. And once in a nursing home, 21 percent can expect to stay five years or more.1 That means it could very well happen to your employees. And while nursing home costs vary from area to area, the average cost of a one-year stay in a nursing home is $87,600.2 Two-thirds of single people and one-third of married couples exhaust their funds after just 13 weeks in a nursing home.

Within two years, 90 percent will be bankrupt.3 Medicaid, the joint federal and state program that covers medical bills for the needy, pays a substantial portion of longterm-care costs but usually only for those who are impoverished.

And Medicare is not paying much of the cost of long-term care.

That’s why the elderly should not rely on Medicare for their long-term-care needs.

Clearly, long-term-care costs pose a real problem for the elderly and their families. Long-term-care insurance can help preserve your employee's accumulated wealth and provide coverage in the event they need long-term care. This can go far in helping to address financial need during retirement.

Sources: 1, 3) 2014 Field Guide, National Underwriter; 2) Bankrate.com, July 1, 2014 The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties.

You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.

Charles Sims, Jr., President/CEO The Sims Financial Group, Inc. www.SimsFinancialGroup.com csims@SimsFinancialGroup.com

The attorneys of Littler invite you to join us for the 2015 Southeast Employer Conference. This interactive seminar will cover the most significant labor and employment law developments and trends impacting employers. The dynamic program is intended to help you keep your organization on the path of legal compliance while achieving its human resource goals.

Presenters will include Memphis and Nashville shareholders:

Jonathan Kaplan

Lisa Lichterman

Jen Robinson

Memphis

Memphis

Nashville

Paul Prather

Tanja Thompson

Eric Stevens

Memphis

Memphis

Nashville

Cost: $145 For direct registration, special accommodations and questions, please contact Celeste Clancy at cclancy@littler.com.

www.littler.com Littler Memphis • 3725 Champion Hills Drive, Suite 3000 • Memphis, TN 38125 • Tel: 901.795.6695 Littler Nashville • 333 Commerce Street, Suite 1450 • Nashville, TN 37201 • Tel: 615.383.3033 www.HRProfessionalsMagazine.com

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To 1095-B or 1095-C? That is the question.

By CAMMIE SCOTT

T

his is the year for information collection related to your employer sponsored health insurance plan. The Affordable Care Act (Healthcare Reform, ACA, Obamacare, whatever you choose to call it) added sections 6055 and 6056 to the Internal Revenue Code. Section 6055 (insurer responsibility) is the required reporting to the IRS of information relating to covered individuals that have been provided minimum

essential coverage (MEC) during a calendar year. Section 6056 (employer responsibility) requires applicable large employers (ALE) to file information returns with the IRS and provide statement to full time employees about the health insurance offered. The main purpose of both of these sections is to provide information to the IRS to enable them to enforce the penalties associated with not having the mandated coverage under the ACA. Section 6055 reporting is to ensure individuals have the mandated coverage. Section 6056 reporting is to ensure large employers are offering coverage to all eligible employees.

As a result of these new reporting requirements, forms 1095-B and 1095-C were created. Both forms are similar in that they both furnish information to the IRS and the taxpayer about coverage. They both contain identifying information about the employee or policyholder that is the primary insured. In the case of employer provided coverage, both forms will include the name, address, phone number and Employer Identification Number (EIN) of the employer. Coverage information will be used on individual tax returns to verify they did have the required minimum essential coverage (MEC) for some or all of the year.

The main difference in the forms is that form 1095-C will be used by applicable large employers (ALE). These are employers who are subject to section 4980H or the employer shared responsibility provisions. This is determined each calendar year

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and generally depends on the average size of an employer’s workforce during the previous year. If an employer has fewer than 50 full-time employees, including full time equivalents, on average during the prior year, the employer is not an ALE for the current calendar year and not subject to the employer shared responsibility. If an employer has at least 50 full time employees, including full-time equivalent employees, on average during the prior year, the employer is an ALE for the current year and is subject to both the shared responsibility provisions and reporting provisions. Go to irs.gov for more assistance and information on determining if you are an ALE. Form 1095-B is used for reporting minimum essential coverage (MEC) under section 6055 to the IRS and for furnishing coverage information to covered individuals. This form is transmitted to the IRS using form 1094-B. Insurance issuers in both the individual and group markets, must file form 1095-B, except if coverage is obtained through the Individual Marketplace.

Section 6055 requires the name, address, and Social Security numbers (SSNs) for all covered individuals –including spouses and children. The report must include the months for which they were covered for at least one day. This allows the IRS to verify that particular individuals have the required minimum essential coverage (MEC). In the case of fully insured group health coverage, issuers are also required to report the name, address and Employer Identification Number (EIN). Without this form, individuals may be subject to the individual penalty.

Form 1095-C (for ALEs) contains information about the offer of health insurance coverage to eligible employees, their share of

the lowest premium and other information related to the employer shared responsibility provisions. Individuals then take this information and use it determine if they are eligible for a premium tax credit through coverage purchased on the Exchange. Remember your employees can still go shop for coverage on the Exchange/Marketplace, but that does not mean they will be eligible for the premium tax credit or subsidy.

Reporting will begin in 2016 for the 2015 calendar year. Statements must be given to responsible individuals (subscribers) by January 31, 2016.

Reports are due to the IRS by February 28, 2016 or March 31, 2016 if electronic. The IRS may grant a 30 extension.

Employers are not required to report on behalf of COBRA or retiree plan participants for section 6056. The reporting requirement only applies to full time employees. COBRA participants and retirees are not full time employees. However for section 6055, they must report.

In case you are confused, here are some common scenarios and answers to who is responsible for the forms.

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The cost of the reporting systems is generally $2,000 to $5,000 per 100 employees per year. While this may seem costly, compared to the amount of labor required and the error factor, it may well be worth it.

We are halfway through 2015. Now is the time to develop your strategy of how you will do reporting for 2015. You don’t want to wait until December of this year or January of 2016 to collect your data for reports.

That will make for a very unhappy holiday season. Take some time to work with your team to decide who will be responsible for the data and reporting. Take a look at your budget and do a cost benefit analysis of tracking the data in house versus outsourcing. Review your systems and reporting capabilities. Decide how to get the job done best within the overall context of your organization. This is your time to let your leadership skills shine!

Small Group/Fully Insured – If you are a small group (under 50 full time equivalents) and you offer a fully insured plan either through the SHOP Marketplace or off the Marketplace then the insurer files form 1095-B. The employer is not responsible for the 6056 reporting (no form 1095-C).

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fully integrated on line benefit enrollment package, the payroll company will not have proof that coverage was offered to the employees. A new type of company is also emerging that integrates with both payroll and benefit platforms to track the data and do the reporting for employers.

Cammie Scott, President CK Harp & Associates cscott@ckharp.com www.ckharp.com

Small Group/Self Insured – If you are a small group (under 50 full time equivalents) and you offer a self-insured plan, the employer is responsible for sending the form 1095-B. Form 1095-C is not required.

3

Large Group/Fully Insured – If you are an applicable large employer (ALE) meaning you have over 50 full time equivalent employees, the insurer files the form 1095-B. The employer is responsible for form 1095-C sections I and II.

4

Large Group/Self-Insured – If you are an applicable large employer (ALE) meaning you have over 50 full time equivalent employees, and you are self-insured, you fill out all sections of form 1095-C. The employer is responsible for the reporting.

Insurers will file information on form 1095-B on summary or transmittal form 1094-B. Employers will file information on form 1095-C on summary or transmittal form 1094-C.

CONSULTANTS

All of these forms are going to require new tracking by both the insurer and the employer. Many employers are looking to technology to ease the reporting burden. The most common place they are looking is to payroll companies. Payroll companies will have much of the required information. However, unless a company is using a payroll company with a www.HRProfessionalsMagazine.com

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Your Top Retirement Plan Compliance Issues – According to the IRS and the DOL

By JENNIFER S. KIESEWETTER

R

etirement plan compliance is a topic we all discuss, all the time. Filing deadlines. Internal controls. Document maintenance. Fiduciary duties.

It seems like the list of compliance issues keeps getting longer and

more complex. But it’s never really on the top of our to-do list. Or is it? Or is it just so overwhelming that we’d rather bury our heads in the sand?

Retirement plan compliance must be a top priority. But where do we start?

Both the Internal Revenue Service (IRS) and the Department of Labor (DOL) are auditing retirement plans with increasing frequency, as both agencies share in the jurisdiction over qualified plans. The IRS has primary jurisdiction over the qualified status of qualified retirement plans and other compliance issues under the Internal Revenue Code (IRC). The DOL has primary jurisdiction over the fiduciary, reporting and disclosure standards and other compliance issues under the Employee Retirement Income Security Act of 1974, as amended (ERISA).

So what are the most common compliance issues noted by these agencies?

What are the common areas of risk?

the IRS only). As such, plans must be updated and amended accordingly.

Typically, the IRS establishes deadlines for such amendments. This amendment requirement applies to all qualified plans, whether the plan is active or not, as long as assets remain in the plan. Additionally, plans that are being terminated must be amended up through the date of termination.

Plans should be reviewed annually to confirm whether all amendments have been made to the plan. The IRS publishes an annual cumulative list of all required amendments for qualified retirement plans. Plan sponsors should compare their retirement plans against this IRS list to confirm that their plans are in compliance.

Recently, through audits, the IRS has identified some recurring errors in qualified retirement plans. Although many errors have been identified by the IRS, three of the most common errors are addressed below:

In addition to the plan document, plan sponsors should review any adoption agreements and summary plan descriptions to determine if amendments are required throughout those documents as well. Further, the plan sponsor may need to issue a summary of material modification (SMM) reflecting such amendments and prepare any necessary board of director resolutions and/or minutes reflecting the adoption of such amendments.

1. Non-Amender or Late Amender Issues: Failing to have an updated plan document to reflect recent law changes is one of the top audit issues. All qualified plan documents must be established and maintained by a formal written plan document that complies with the Internal Revenue Code (and ERISA, but this section addresses

If a plan sponsor discovers that plan amendments were not adopted timely, the plan sponsor may need to use one of the IRS correction programs to correct the issue.

A. IRS Audit Issues As stated above, the IRS is focusing on retirement plan compliance through examinations, which are the equivalent of an audit. The IRS’ EP examination program is the enforcement arm for the statutory and regulatory compliance requirements that apply to qualified retirement plans.

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2. Definition of Compensation: Another common mistake is that the plan sponsor did not use the proper definition of compensation, as reflected in the plan documents, in plan administration. Plan documents often use different definitions for compensation for different purposes, such as deferrals, contributions and testing. The IRS can audit compensation compliance: (1) by the plan document definitions; and (2) by matching such definitions to the payroll codes for such deductions as participant plan deferrals.

Further, compensation errors come into play when compensation limits are exceeded, such as when an employee’s compensation limit reaches $265,000 (Code Section 401(a)(17) limit).

If deposits are not made timely, the failure could constitute an operational error, a plan disqualification issue and a prohibited transaction.

These errors are typically corrected through the DOL’s Voluntary Fiduciary Correction Program. However, if the plan’s tax-exempt status is in jeopardy, then correction will also be required under the IRS’s correction program.

Plan sponsors should conduct annual reviews of their plan documents for compensation definitions. In coordination with this review, plan sponsors should ensure that operationally the payroll department understands the plan document’s definition(s) of compensation and that such definitions are being applied properly. If the plan sponsor determines that a mistake has occurred with respect to a compensation definition, the plan sponsor may need to make either a corrective contribution or distribution under one of the IRS correction programs.

2. Offering Target Date Funds: Another issue that the DOL has recently turned its attention to is the inclusion of target date funds (TDFs) in retirement plans.

TDFs are commonly offered in retirement plans to participants as an investment option, or as a qualified default investment alternative (QDIA). These funds are investment funds that contain a mix of asset allocations that are designed to change in risk over time so that as the participant approaches retirement age, the fund becomes more conservative in its investment allocation. Further, the “target date” refers to the target retirement date and is often incorporated into the name of the fund, such as Fund 2045. Although participants may believe that this simplifies their own investment selection process within the retirement plan, it may not be so, for the participant or the plan sponsor.

3. Issues Involving Nondiscrimination Testing (ADP/ACP): Another major audit issue for traditional 401(k) plans, i.e., non-safe harbor plans, are nondiscrimination testing errors. Plans sponsors must test these plans each year to ensure that the contributions made for non-highly compensated employees (NHCEs) are proportional to contributions made for highly compensated employees (HCEs).

Typically, this testing information is provided to the plan sponsors by the plan’s recordkeeper.

The DOL has recently issued guidance on target date retirement funds for ERISA plan fiduciaries. Plan sponsors, as fiduciaries, should follow this guidance, such as establishing and documenting the process in comparing and selecting TDFs, understanding the fund’s underlying investments, reviewing the fund’s fees and investment expenses, among other objectives processes. With plan fees and fiduciary duties on the DOL’s radar, plan sponsors should make sure that not only are they following the DOL’s guidance on TDFs, but that they are documenting that process.

Plan sponsors should conduct independent reviews to ensure that both NHCEs and HCEs are properly classified per IRS regulations.

Additionally, plan sponsors should review the testing data they receive to look for irregularities in the data. Further, plan sponsors may want to consider a safe harbor plan, which eliminates certain testing requirements. If testing mistakes are discovered, plan sponsors may need to make a qualified nonelective contribution for the NHCEs under one of the IRS correction programs.

3. Plan Committee Minutes/ Board of Director Resolutions: Another hot topic for the DOL upon audit is the company’s internal controls. A company’s internal controls demonstrate how the company and/or the plan sponsor documents its processes with respect to the plan. The DOL requests copies of the plan committee meeting minutes and the board of director resolutions, if applicable. In fact, the DOL may request these items going back several years.

B. DOL Audit Issues The Employee Benefits Security Administration (EBSA), the enforcement arm of the DOL, has increased its efforts in plan audit over the past few years. EBSA's oversight authority extends to nearly 684,000 retirement plans, approximately 2.4 million health plans, and a similar number of other welfare benefit plans, such as those providing life or disability insurance.

Like the IRS, several recurring issues occur during DOL audits as well.

The following are three issues that plan sponsors should pay particular attention to with respect to qualified retirement plans:

1. Late Deposit of Salary Deferrals: One of the most common DOL audit issues is that of late salary deferral deposits. The employer is responsible for contributing the participants’ elective salary deferrals to the plan’s trust. These contributions, or deposits, must be made on the earliest date that the deferrals can reasonably be segregated from the employer’s general assets.

However, in no event can the deposit be later than the 15th business day of the following month. This is a maximum deadline, not a safe harbor. With that being said, the DOL has established a seven (7) business day safe harbor rule for plans with fewer than 100 employees.

The minutes and resolutions must be reviewed to make sure that they are complete and accurate. This proves to the DOL that processes are in place and written. Prudence equals a process and that process must be in written form and maintained accordingly.

Proactivity and preparation solve many issues. So what do we take away with respect to compliance? Perform annual internal self-audits on your plan. Check your operations between your departments, such as payroll, human resources and benefits. Review your documents. Make sure your participant communications are up to date. Communicate frequently with your service providers. Hire qualified people to help you. And document, document, document. If the IRS or the DOL decides your plan is next on the list, be ready for them. This readiness can help to reduce potential costly fines and time spent away from your core business during an audit.

Jennifer S. Kiesewetter, Esq. kiesewetter law firm, PLLC jkiesewetter@kiesewetterfirm.com www.kiesewetterlawfirm.com www.HRProfessionalsMagazine.com

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The NLRB Continues to

Expand Its Reach into Joint Employment Relationships

By JOSEPH R. WARD III

C

ontinuing its goal of expanding union rights and membership opportunities, the National Labor Relations Board (“NLRB”) in Miller & Anderson, Inc., Case No. 05-RC-079249 (May 18, 2015), granted review of a Regional Director’s dismissal of a union election petition seeking to represent (1) regular employees employed solely by the employer, Miller & Anderson, Inc., (2) temporary workers employed solely

by Tradesmen International, and (3) temporary workers employed jointly by Miller & Anderson, Inc. and Tradesmen International. The Regional Director dismissed the union’s petition because all the employers did not consent to the union’s proposed multiemployer units pursuant to the NLRB’s holding in Oakwood Care Center, 343 NLRB 659 (2004). The current prevailing law, as annunciated in Oakwood, is that coalescing bargaining units of solely and jointly employed employees (aka “multiemployer units”) is permissible only with the parties’ clear consent. Further, under Oakwood, employer consent to multiemployer units will not be inferred merely from joint employer relationships. By accepting the union’s appeal, the NLRB appears to be on the brink of reversing its holding in Oakwood, which would result in a windfall for labor organizations across the United States by granting them access to an even wider pool of potential members. At 34

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the same time, the NLRB would also be placing an even greater obstacle for employers seeking to avoid being subject to the influence of outside organizations that may not share the same commitment to managing labor relationships.

By way of background, the union in Oakwood sought to represent employees solely employed

by Oakwood and employees jointly employed

by Oakwood and a temporary staffing agency.

The Board concluded that such a combination resulted in multiemployer units, which triggered the need for all of the employers’ consent. Prior to Oakwood, these type of cases were governed by M.B. Sturgis, 331 NLRB 1298 (2000), in which the Board held that the scope of a bargaining unit should be resolved by examining the work performed for the user employer and that all employees doing work for the user employer – regardless of the employees’ statuses as regular or temporary workers – did not constitute a multiemployer unit requiring the employers’ consent.

In Oakwood, the Board overturned Sturgis finding that the decision failed to offer a workable solution between the conflicting interests of employers and distinct groups of employees participating in the collective bargaining process.

The union in Miller & Anderson, Inc. is essentially arguing that the Board should return to the rule articulated in Sturgis because the current rule does not sufficiently echo the modern employment landscape. On the other hand, the employers are arguing that their consent to recognizing multiemployer units is critical to managing the conflicting interests between the employers as well as distinct groups of regular and temporary employees.

In addition to the NLRB stating that the union in Miller & Anderson, Inc., raised “substantial issues warranting review with respect to the applicability of Oakwood Care Center,” the NLRB has also indicated that it intends to consider amicus briefs supporting a change to its rule. And if these actions by the NLRB left any doubt as to the direction the Board is heading, one need only look to other recent decisions in which the Board expanded its traditional joint employer test.

Under prior precedent, in order to find a joint employment relationship between two independent employers, the Board required that there be direct and immediate control over essential terms and conditions of employment such as hiring, firing, disciplining, scheduling and directing employees. However, recently the Board has considered additional indirect factors like work location, payment of training and supplies, and the nature of the temporary employees’ work. By applying these additional factors, the Board has essentially lowered the hurdle to jump to establish joint employment

relationships which ultimately means that employees and unions have an easier route to take to obtain a finding that employers are jointly and severally liable for labor law violations.

Moreover, the NLRB recently issued a number of consolidated complaints against certain McDonald’s franchisees and their franchisor McDonald’s, USA, LLC alleging that the franchisees violated employees’ rights. According to the investigation conducted by the NLRB’s general counsel, the basis for these complaints is that McDonald’s, USA, through its franchise relationship and its use of tools, resources, and technology, engaged in sufficient control over its franchisees’ operations to make it a joint employer, sharing liability for violations of the NLRA. Many employers view the Board’s action as a direct attack on the franchise model by its slackening of the traditional joint employment test.

Based on the foregoing, many user employers will be left wondering how to manage and protect their interests, their regular employees’ collective bargaining efforts, the temporary employees’ unionizing efforts, and the other employers’ interests in minimizing their own exposure. Although there is no clear answer at this juncture, some important preventive measures include requiring that the employers of temporary employees provide their employees with the necessary training, tools, supplies, schedules, and wage payments. In addition, user employers should refrain from disciplining temporary employees, strictly supervising their work, and from instructing them to perform any work that could be considered the heart of the user employer’s business. As ambiguous and counterintuitive as this sounds, it will hopefully yield a finding that no joint employment relationship exists, thereby removing any joint or several liability for claims of labor law violations. In addition, because a joint employment relationship is a threshold issue to establishing a multiemployer unit, a finding that there is no joint employment relationship will likely result in a multiemployer petition being dismissed.

In conclusion, if the NLRB rules that Oakwood Care Center is no longer the standard for finding a multiemployer unit, it will result in many employers, across numerous industries, being forced to bargain with employees whom they have no direct business relationship with aside from temporary work assignments under a joint employment arrangement.

Joseph R. Ward III The Kullman Firm jrw@kullmanlaw.com www.kullmanlaw.com

It’s Time for a Checkup.

Are your employment policies and practices up-to-date with recent changes in the law? Could they be better?

If you’re not sure, then 2015 could be an expensive year for you.

From hiring to performance reviews to discipline – and things in between – you can’t afford noncompliance.

CGWG’s HR Checkup provides a basic review of your company’s health. For $500, set up a one-on-one meeting with CGWG attorneys who will help you identify employment law compliance issues and establish a path to best practices.

*Participating in the HR Checkup establishes an attorney-client relationship only to the extent of the agreed-upon services.

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Habits of People who are Happy at Work

By HARVEY DEUTSCHENDORF

“ Work harder on yourself than you do on your job.” ~ Jim Rohn ~

When it comes to the research results on happiness in the American workforce, the statistics are not flattering. A recent survey, by the staffing firm Manpower Group, discovered that nearly two thirds of American and Canadian workers were not happy in their job. Another recent survey found that close to 60 percent of American workers were unhappy enough in their jobs to want a new career. Most of us have found ourselves at some point in a job that was not fulfilling.

While psychologists and social scientist believe that some of our happiness is predetermined by our genes, a major portion is within our control.

Regardless of our situation at work, here are 7 ways of maximizing our happiness.

Commit to continuous improvement as a lifetime goal Happier people believe in doing the best they can whether or not they are given credit for the work they do. Giving their best creates positive feelings about themselves. This establishes character, builds self-regard and good work habits which will benefit them in the future regardless if anyone in their present position notices or cares.

Have goals worth striving for People with clear goals (that they are working towards) are able to look beyond everyday workplace irritants and problems. They know the obstacle will be temporary and are able to see beyond this dilemma. When things are not going well, they focus on their goals instead of the negative situation that surrounds them at work. They are acutely aware that this too will pass and when they are in a better situation down the road, they will view their present situation as a stepping stone, a point of reference to their destination. This ability to look ahead allows them to avoid being caught up in and expend energies on issues that will have no real significance to their future.

Don’t get caught up in issues beyond their control Happier people don’t let themselves get emotionally caught up in negative vibe or gossip that is toxic in the workplace. They focus on the work at hand and on what they are able to do. They avoid becoming involved in issues and conflicts that do not include them and are beyond their area of concern. Their focus is always to concentrate their attention and energies on areas that they have control over and give them a sense of satisfaction, 36

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Are willing and ready to help others Happy people are always looking for ways they can help others.

Researchers at the University of Wisconsin-Madison found that people who helped others at work were happier than those who didn’t. While helping others can lead to promotion, there are also warm feelings of satisfaction that come from helping out our fellow human beings. It also leads to better relationships with colleagues, which helps make the workplace more pleasant. Instead of looking for immediate kudos and appreciation for helping others, happy people see these acts as making themselves better people. For them, this holds its’ own intrinsic rewards apart from what the outside world bestows upon them.

Avoid negative people as much as possible When coming across a negative person or chronic complainer at work, happy people find ways to refocus on coming up with solutions or looking at the situation from another angle. Their positive energy often causes complainers and whiners to avoid them as they know they will not receive a sympathetic ear. An unintended consequence might result in a negatively focused person changing their attitude; at least temporarily; in order to have some type of a relationship with someone who is happy and positive. Happy people are aware that negative people are an energy drain and find ways to limit the amount of time they have to spend with them.

Make gratitude an integral part of their life While striving for more in life, happy people are constantly aware of all the reasons they have to be grateful. They express their gratitude freely and openly, being quick to offer thanks to those who help them or do a kind deed. This attitude of gratitude attracts people to the positive energy they emit. Colleagues at work want to be around people like this and work with them. When things are not going well at work, they choose to focus on events that have gone well in their lives.

Manage their emotions through smiling and use of humor Happy people automatically try to make the most of every situation, whether at work, home or play. They have discovered they can change their emotions by smiling, thinking of humorous events or situations.

They are also able to distract themselves by bringing memories of pleasant, happy, fun times and places. Whenever a situation comes up that threatens to engulf them in negative energy, they rely upon their ability to rise above and remain in a positive mental space.

Harvey Deutschendorf is an emotional intelligence expert, 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 translated into 4 languages including Chinese. You can follow him on Twitter @theeiguy.

OPTIMISM VS. REALISM:

Being Ready for “What If”

If your company doesn’t already offer disability insurance as an employee benefit, consider adding it this enrollment season. It’s easy and affordable with the right benefits partner. Here are some criteria to help you evaluate disability insurance providers: 1. Business understanding. Look for a partner with a proven history and a foundation of best practices across a number of industries — including yours. This type of partner brings a wide and deep base of knowledge learned through the course of thousands of customer engagements.

2. Product design. Look beyond cost to make sure the coverage will offer the flexibility and options your business and your workers need.

Disability insurance provides a financial safety net your employees need more than ever

By B LAKE ROGERS, JIMMY HINTON, CHRIS MENARD, and RICKY REYNOLDS

America’s workers are an optimistic group.

A Gallup poll late last year showed four out of five respondents are satisfied with their current standard of living — and more than 60 percent of them say it’s getting even better.

But sometimes, we’re a little too optimistic.

Most employees vastly underestimate their chances of being unable to work at some point in their careers because of injury or illness. More than 20 percent of workers under 40 say they’re more likely to win a big lottery than to become unable to work due to illness or injury, according to a 2014 survey by the Council for Disability Awareness.

While we’re not in the business of telling the future, the odds in this prediction are clear: 1 in 259 million for a big lottery win compared with 1 in 4 for a disability at some point in a working career.

Your employees work hard to earn an income, and most of them value that income greatly. The CDA survey shows people rank their income right up there with their home — and just behind their health — as by far the three most important things in life.

But most working consumers aren’t doing anything to protect that all-important resource. A strong majority agree it’s important to protect their health and home, but only 28 percent see protecting their income as crucial. In fact, way more people — 73 percent — think it’s important to protect their car, the survey shows.

Without a regular income, daily living expenses — mortgage or rent, gas, utilities, food, day care — quickly mount up. And that doesn’t include the fun stuff like movies, soccer camp, piano lessons or those great shoes that just went on sale. How long could they continue to pay their bills without a paycheck?

On top of that, many of America’s workers are already stretched thin financially. A 2013 CareerBuilder.com survey said more than three-quarters are living paycheck-to-paycheck at least some of the time. And the CDA survey said only 38 percent of adults have an emergency fund to fall back on.

Disability insurance offered to employees through your workplace can provide an affordable financial safety net to protect a family’s way of life.

Today’s disability policies also often include riders to provide first-day benefits that begin immediately upon a hospitalization. And plans can be tailored to mesh with other benefits you offer, such as paid time off and long-term disability insurance.

3. Benefits communication and enrollment expertise.

A well-designed plan should be simple to understand, but many carriers rely on self-enrollment for their benefits. Self-educated delivery gets very low participation and sometimes leads to dissatisfaction from workers who don’t understand what their plans offer. A top voluntary benefits partner will meet one-to-one with each employee at no additional cost to explain not only the disability coverage but your core benefits as well, to help employees select the best coverage.

4. Group size. Many voluntary plans require 50 or more employees, but some cover groups as small as three. Be sure to engage a partner that gives you the flexibility to address positive and negative changes in your workforce numbers.

Disability insurance, as part of an overall voluntary benefits strategy, offers your employees a strong financial safety net to catch them when they fall — giving them protection when they need it most.

Blake Rogers Tennessee territory sales manager, Colonial Life & Accident Insurance Company tblakerogers@coloniallife.com or 615-696-6672

Jimmy Hinton Mississippi territory sales manager, Colonial Life & Accident Insurance Company jhhinton@coloniallife.com or 601-326-2954

Chris Menard Kentucky territory sales manager, Colonial Life & Accident Insurance Company cmenard@coloniallife.com or 502-272-9664

Ricky Reynolds Arkansas/Oklahoma territory sales manager, Colonial Life & Accident Insurance Company rcreynolds@coloniallife.com or 501-246-8979

ABOUT COLONIAL LIFE Colonial Life & Accident Insurance Company is a market leader in providing financial protection benefits through the workplace, including disability, life, accident, dental, cancer, critical illness and hospital confinement indemnity insurance. The company’s benefit services and education, innovative enrollment technology and personal service support more than 80,000 businesses and organizations, representing more than 3 million of America’s workers and their families. For more information, visit www.ColonialLife.com, www.facebook.com/coloniallifebenefits, www.twitter.com/ coloniallife and www.linkedin.com/company/colonial-life. www.HRProfessionalsMagazine.com

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Broetje Orchards Settles with ICE In the settlement, Broetje Orchards acknowledged that it continued to employ unauthorized workers after being advised by ICE those employees did not have permission to work in the United States. Under the settlement agreement, Broetje Orchards did not admit to any criminal wrongdoing. On paying the fine, Broetje Orchards will be fully released from any further civil or criminal liability associated with conduct alleged by ICE to date.

OSC and Luis Esparza Services

Immigration-Related Agencies

Issue Record Fines

By BRUCE E. BUCHANAN

Immigration and Customs Enforcement (ICE) and the Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) have recently reached settlements with two companies for record amounts of penalties.

ICE and Broetje Orchards ICE and Broetje Orchards of Prescott, Washington, reached an agreement whereby the company agreed to pay a $2.25 million civil fine for employing almost 950 workers who were not authorized to work in the United States. This is one of the largest fines ever levied on an agricultural entity. Broetje Orchards is a family-owned business that grows apples and cherries and employs over 1,000 permanent employees and almost 2,800 seasonal workers during harvest season. It is one of the country’s largest apple growers.

In 2012, ICE served a Notice of Inspection (NOI) on Broetje Orchards requesting their I-9 forms and other documentation. After a review of these documents with government databases, ICE issued a Notice of Suspect Documents (NSD), determining approximately 1,700 employees did not possess authorization to work in the United States.

At this point, ICE gave Broetje Orchards the opportunity to notify the 1,700 employees, who had the chance to provide any other documentation to establish work authorization. Apparently, this investigation concluded when Broetje Orchards agreed to terminate all employees who were not authorized to work.

The OSC reached an agreement with Luis Esparza Services, Inc. (LES), a farm labor contractor based in Bakersfield, California, resolving claims that the company discriminated against individuals because of citizenship status in violation of the Immigration and Nationality Act (INA).

The investigation found LES required work-authorized non-U.S. citizens to produce documents issued by the Department of Homeland Security as a condition of employment, but did not require the same of U.S. citizen workers. The anti-discrimination provision of the INA prohibits employers from placing additional documentary burdens on workers during the employment eligibility verification process based on their citizenship status.

Under the settlement agreement, LES will pay $320,000 in civil penalties, which is the largest civil penalty the Justice Department has ever secured to resolve a discrimination claim under the INA. Additionally, LES will compensate a worker who lost wages due to LES’s employment eligibility verification practices; undergo training on the anti-discrimination provision of the INA; revise its employment eligibility verification policies; and be subject to monitoring of its employment eligibility verification practices for three years.

Takeaways These two settlements demonstrate the need for employers to not knowingly employ unauthorized workers and to not discriminate against U.S. citizens in the I-9 process by requiring them to additional documentation. So how should a company determine whether it may be in violation of the law? The best way is to retain an immigration compliance attorney to audit your I-9 forms and review your immigration compliance policies.

High Level of Employees on NSD means ICE will Return However, in the summer of 2014, ICE returned to Broetje Orchards with another NOI. According to Donald Buechner, Section Chief of Worksite Enforcement of ICE, this is becoming a more common event when an employer has previously had a high percentage of employees listed on the NSD. The 2014 NOI revealed nearly 950 of the company’s employees were suspected of not being authorized to work in the United States. Many of these employees were the same employees previously listed on the 2012 NSD. 38

www.HRProfessionalsMagazine.com

Bruce E. Buchanan, Attorney Siskind Susser P.C. bbuchanan@visalaw.com www.visalaw.com

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Financial Planning has never been more important than it is today! Changes in the economy, taxes and interest rates have made every financial picture more complex than ever before.

We focus on: Financial Needs Analysis Retirement Income Planning Disability Income Protection Life & Health Insurance Long Term Care Insurance Guaranteed College Scholarships College Funding Solutions Executive & Employee Group Benefits Charitable Contribution Strategies

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