February 2018 issue by Cynthia Thompson

Volume 8 : Issue 2

www.HRProfessionalsMagazine.com

HR Technology Issue

Artificial Intelligence and Other

Tech Trends That Succeed

SHRM Employment Law Conference

in Washington, D.C.

March 12-14

Preview of

SHRM State Conferences

Bill Kutik

The “Godfather” of HR Technology

PHOTO BY JOMAR THOMAS

2018 SHRM EMPLOYMENT LAW & LEGISLATIVE CONFERENCE MARCH 12 – 14, 2018, WASHINGTON, D.C. Renaissance Washington, D.C., Downtown

Navigate evolving workplace public policy.

VICE PRESIDENT GOVERNMENT AFFAIRS SHRM

MIKE P. AITKEN

CHIEF POLITICAL ANALYST

NEWS DIVISION CNN

GLORIA BORGER

HOST

“WAIT WAIT ... DON’T TELL ME!,” NATIONAL PUBLIC RADIO (NPR)

PETER SAGAL

As an HR professional, you’re responsible for making sure your organization is operating in compliance with workplace regulations. This can be a heavy burden due to the ever-changing political landscape in Washington. Join hundreds of other HR professionals in D.C. for policy updates and pragmatic advice on how to stay ahead of the curve.

Explore the conference program and register at shrm.org/leg.

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www.HRProfessionalsMagazine.com Editor

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

The Thompson HR Firm, LLC HR Consulting and Employee Development Art Direction

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Contributing Writers

Frederick R. Baker Barry Brown Bruce E. Buchanan William Carmichael Dale Conder Jr. Alan G. Crone Harvey Deutschendorf Brad Federman Chantel C. Foley Jeanne J. Fisher Timothy Kennedy Jennifer S. Kiesewetter Jane Kim Dennis W. Koerner Bill Kutik Frank Lanigan Lisa May Kathryn S. McConnell Robert Ratton Jennifer Sims Angelo Spinola Stacey L. Stewart Eli Stoltzfus Richard Works Board of Advisors

Austin Baker Jonathan C. Hancock Ross Harris Diane M. Heyman, SPHR Terri Murphy Susan Nieman Robert Pipkin Ed Rains Michael R. Ryan, PhD Contact HR Professionals Magazine: To submit a letter to the editor, suggest an idea for an article, notify us of a special event, promotion, announcement, new product or service, or obtain information on becoming a contributor, visit our website at www.hrprofessionalsmagazine. com. We do not accept unsolicited manuscripts or articles. All manuscripts and photos must be submitted by email to Cynthia@hrprosmagazine.com. Editorial content does not necessarily reflect the opinions of the publisher, nor can the publisher be held responsible for errors. HR Professionals Magazine is published every month, 12 times a year by the Thompson HR Firm, LLC. Reproduction of any photographs, articles, artwork or copy prepared by the magazine or the contributors is strictly prohibited without prior written permission of the Publisher. All information is deemed to be reliable, but not guaranteed to be accurate, and subject to change without notice. HR Professionals Magazine, its contributors or advertisers within are not responsible for misinformation, misprints, omissions or typographical errors. ©2018 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: Bill Kutik, “The Godfather of HR Technology”

9 Apply for WGU Tenn-K $10,000 Scholarship

14 #WeToo Need More than Compliance 22 The Business Case for Compliance

32 Book Look: Open Source Leadership

42 Compensation Highlights in Education and Health Services

48 Pardon Me, Your Credibility is Showing 49 Preview of March Issue

50 7 Things You Should Never Share at Work

HR Technology

Employment Law

12 NLRB’s Return to Pre-Obama-era Precedent 16 Tennessee Workers’ Compensation Update 24 Tax Reform Considerations for Human Resources 28 2016 Overtime Exemption Rules Invalidated: Now What? 36 What is the EEOC Trying to Accomplish with Its ADA Lawsuits Against Macy’s and Whole Foods Market? 40 No-Fault Attendance Policies: Faulty or Faultless? 44 Wage and Hour Law Update for Restaurant Operators 46 Employers Beware: Some I-9 Practices May Constitute Unfair Documentary Practices

Industry News

30 Tips for Shopping, Interviewing and Hiring a New Retirement Plan Advisor

6 SHRM-Memphis HR Excellence Awards February 20 7 SHRMGA HR Legal Summit Featuring Lilly Ledbetter in Savannah May 4 8 SHRM-Atlanta SOAHR Conference March 27-28 10 Save the Date! Workplace Health Conference 2018 in Savannah February 22 11 Highlights from the Tennessee Legislative Advocacy Day in Nashville January 19 25 TN SHRM Strategic Leadership Conference in Nashville April 27 35 ARSHRM State Conference & Expo in Hot Springs April 4-6 37 MSSHRM State Conference & Expo in Biloxi April 2-4 47 TPMA Annual Conference in Franklin April 23-27

49 January Meeting of the Greater Memphis Employee Benefits Council

March 2018 Issue features Profiles of Rising Stars in Employment Law from Chambers USA and Super Lawyers plus Employment Law and Employee Benefits Updates Deadline to reserve space February 10

11 Leverage the Award-Winning SumTotal HCM Suite 17 Compensation HR Software Solutions 18 Artificial Intelligence and Other Tech Trends That Succeed

20 HR’s Ultimate Background Screening Checklist for 2018 21 Talent Activation: How Standout Turns Human Potential into Business Performance

38 Artificial Intelligence – The HR Game Changer

Employee Benefits 26 2017 Tax Reform Highlights

34 Employee Benefits Law Firm Modernizes Services & Launches Sister Training and Education Company

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a note from the Editor

elcome to our HR Technology issue! It is such an honor to have Bill Kutik, HR's leading independent technology analyst and one of its top tech gurus, on the cover of our February issue! You may recognize the name, as Bill has been the monthly Technology Columnist for Human Resource Executive ® for the past 27 years! He also started Firing Line with Bill Kutik ®, a broadcast-quality video interview program, beginning its fourth year. The show has gathered over 100,000 views on YouTube since it began in 2015. Kutik is best known as the founding co-chair and guiding light of the magazine's annual HR Technology Conference & Exhibition ® since it began in 1998 until 2013, when he stepped aside. You will enjoy reading all about Bill in his professional profile on Page 5. I hope you will join me for one of SHRM's most exciting and educational annual conferences, the SHRM Employment Law & Legislative Conference in Washington, D.C. March 12-14. I can't wait to go to Capitol Hill with the Tennessee SHRM A-Team and meet with our legislators about the issues impacting our workforce! I highly recommend that you join your state's A-Team and get involved! I look forward to seeing you there! See our inside front cover for details! We have some fantastic articles about the hot topics in HR technology today including using artificial intelligence in recruiting. Check out Bill Kutik's article, "The Emergence of Artificial Intelligence in HR and Other Tech Trends that Succeed," on Page 18. Dennis W. Koerner, Ph.D. also contributed an article about artificial intelligence, and how it will change the way companies recruit, hire and develop talent. You can catch his article on Page 38. Speaking of talent, last month I had the pleasure of co-sponsoring an event with ADP that featured Kelly Johnson with The Marcus Buckingham Company as keynote speaker. Kelly spoke on talent activation and how to change

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the focus from managing talent to activating it by using real-time, reliable data. There is no doubt that technology is growing by leaps and bounds in the world of talent management. We are bringing you some of the highlights from this exciting event on Page 21. Compliance is a continuing hot topic in HR. We have two interesting and somewhat opposing articles on this topic. Brad Federman argues that we need more than compliance in his excellent article on Page 14. Alan Crone argues the business case for compliance in his informative article on Page 22. We would be remiss if we failed to mention the implications for HR from the 2017 Tax Reform Bill. Stacey Stewart discusses the impact it will have on health and welfare plans on Page 26. Timothy Kennedy provides a glimpse into how the new tax reform bill will impact HR in the areas of executive compensation, certain paid leave programs, deduction for sexual harassment and sexual abuse settlement payments, suspension of moving expense reimbursements, and disincentives for certain fringe benefits. WOW! Who knew? We also have important employment law updates on the NLRB, the DOL Overtime Exemption Rules, the EEOC, no-fault attendance policies, Tennessee workers' comp, wage and hour update for the restaurant industry, and unfair I-9 documentary practices. There is also a checklist for background screening in 2018, and how to pick a new retirement plan advisor! We also have the latest updates on the spring SHRM Conferences in this issue. So grab this month's issue and get cozy in your favorite chair by the fire and enjoy! Mark you calendar for February 27 when we will be bringing you our monthly complimentary webinar sponsored by Data Facts. You will earn 1.00 SHRM PDC and 1.00 HRCI recertificaton credit. Watch your email for your invitation. If you are not receiving an invitation, please go to our website, www.hrprofessionalsmagazine.com, and subscribe to our digital issue. You will also receive breaking news updates that impact HR as they occur. Get certified in 2018!

Cynthia@hrprosmagazine.com Twitter @cythomps

on the cover

BILL KUTIK

The “Godfather” of HR Technology Bill Kutik is HR’s leading independent technology analyst and one of its top tech gurus. Most recently, he started Firing Line with Bill Kutik,® a broadcast-quality video interview program, beginning its fourth year. Every month it features thought-leaders from the HR technology community: including practitioners, vendor executives, analysts and consultants. Guests have included the CLO of Accenture and Josh Bersin of Deloitte. The show has gathered nearly 100,000 views on YouTube since 2015. For 27 years, he has been the monthly Technology Columnist for Human Resource Executive,® the largest commercial print magazine serving the needs of HR professionals. Kutik is best known as the founding co-chair and guiding light of the magazine's annual HR Technology Conference & Exhibition,® since it began in 1998 until 2013, when he stepped aside. For years, “HR Tech,” as people call it, has been the largest conference in the world devoted to helping HR executives become more tech savvy and offering an annual town meeting for like-minded HR professionals. Close to 10,000 are expected at the 21st Annual in September. Earlier in 2008, he started The Bill Kutik Radio Show,® a bi-weekly online talk show with industry leaders and 183 podcasts in the archive. He has also created and moderated 114 industry panels live and on-line.

“I think of myself as a self-employed impresario,” Kutik said. “Meaning I create public events for the education of attendees, viewers or listeners. My guiding principle for all of them has always been to focus exclusively on what guests are thinking and doing, not what they’re selling or the particular software they might be using.” In 2012, Human Resource Executive named him one of the 10 “Most Powerful HR Technology Experts” and The Huffington Post in 2013 listed him in “Top 100 Social HR Experts on Twitter.” For 20 years, he was consulting editor for Esther Dyson’s leading computer industry newsletter, Release 1.0. Previously he was the founding editor of the monthly magazine, Computers in HR Management; managing editor of Ziff-Davis’ Computer Industry Daily; and reported for The New York Times and The New York Daily News. He has also published articles in Newsweek, Washington Post, Institutional Investor, New York Magazine, Business Month, IHRIM Journal, Cruising World and Backpacker (where he was the founding editor). He has a BA degree from Harvard University and is president of Kutik Communications, a strategy, marketing and editorial consulting firm in Westport, CT, where he can be reached at bill@kutik.com. 

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A Night of Excellence…Celebrating the 2017 Stars of HR !! Join SHRM-Memphis as we honor the best and the brightest in HR at the

SHRM-Memphis HR Excellence Awards Tuesday, February 20, 2018 Memphis Bioworks Foundation 20 South Dudley Street 5:30 – 8:00 pm

A gala evening of celebration, recognizing the nominees and winners of the following: George Mabon HR Executive of the Year Award HR Emerging Leader Award Memphis HR Champion Award HR Lifetime Achievement Award HR Student of the Year Award Registration is open…please visit the SHRM-Memphis Website at www.shrm-memphis.org.

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2018 BE THE CATALYST SHRM-ATLANTA HR CONFERENCE

March 27-28, 2018 | Cobb Galleria Centre | Atlanta

Join over 1,000+ HR practitioners, industry experts and resource partners March 27-28 at SOAHR 2018, SHRM-Atlanta’s 28th Annual Conference, to share best practices, network, develop skills, build knowledge, and have fun! If you’re involved in HR in any capacity, you don’t want to miss this event.

SOAHR 2018 Highlights: • 30+ sessions in 5 concurrent tracks • 12 hours of recertification credit with SHRM & HRCI • 2 engaging keynotes • 35+ industry expert speakers from companies such as MARTA, NBCUniversal and IHG • NEW Pre-Conference Workshop on March 26th (3 CEUs) • Interactive programs • Early morning sessions

Save $30 off Two-Day Registration with code HRPRO

www.SOAHR.net www.SHRMAtlanta.org

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Save the Date!

“DESTINATION: Workplace Health” Workplace Health Conference 2018 WHEN: February 22, 2018 WHERE: Savannah Technical College, Eckberg Auditorium, White Bluff Road, Savannah, GA Start the new year out right with valuable information, CEUs, and networking in Savannah.

ACCEPTING VENDORS & SPONSORS NOW! Cost for attendees: $75.00

Cost for Vendors: $450 Various Sponsorships Available

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Tennessee Legislative Advocacy Day Friday, January 19, 2018 | Nashville

State of Tennessee Capitol Building

TN SHRM members with Governor Bill Haslam

TN SHRM members inside the Tennessee Capitol Building

Chattanooga constituents at the TN SHRM Advocacy Day

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There and Back Again: NLRB’s Return to Pre-Obama-era Precedent By CHANTELL FOLEY and ROB RATTON

goes without saying that the last five years have certainly been an “adventure” for labor lawyers, employers and HR professionals due to the significant changes in the law as enforced by the National Labor Relations Board (NLRB or Board). No other agency changed so radically under the Obama Administration, implementing controversial changes to both case law and procedure, as the NLRB. The terrain has been difficult to maneuver to say the least. Yet, hope is being restored for employers under the new NLRB. In the span of two days in December 2017, the Board overturned several Obama-era rulings, beginning its journey to restore stability to board law and to create a more employer-friendly climate for businesses. This month’s article takes a look at the recent Board decisions that employers and HR professionals across the country will be dealing with in 2018. The Return of the Traditional Joint-Employer Test One of the most controversial Board rulings of the Obama-era involved the much-criticized indirect control test for determining joint-employer status adopted in the Browning-Ferris Industries of California decision. In Browning-Ferris, the Board did not require a company to possess “direct and immediate control” over a contractor’s employees to be considered a jointemployer. Instead, the Board declared that the “right to exercise” minimal control would suffice for the joint employer designation, even if the right was never exercised and a company’s involvement with the contractor’s employees was limited and routine.

In Hy-Brand Industrial Contractors Ltd., the Board returned to the more lenient precedent on joint employers that had been in place for 30 years prior to the creation of the Brown Ferris standard. Under the Board’s Hy-Brand ruling, two entities must “directly and immediately exercise control over the essential employment terms of another entity’s employees” to be considered joint employers. Indirect control, or the contractual right to control another company’s employees even if it isn’t actually used, is not enough to establish joint-employer status. Moreover, limited and routine control will not satisfy the joint-employer standard. While the Board has returned to previous precedent regarding jointemployer status, keep in mind that employers still may be found to be jointemployers under the direct control test, as the Board found that Hy-Brand Industrial Contractors and Brandt Construction Company were. The Traditional “Community of Interest” Test Is Back Again In 2011, the Board decided an equally controversial case, overturning 20 years of board precedent—the Specialty Healthcare & Rehabilitation Center of Mobile decision. Essentially, Specialty Healthcare made it easier for a union to get its “foot in the door” by targeting smaller groups of employees for organizing. Conversely, the Board made it more difficult for an employer to prove a bargaining unit petitioned for by a union was inappropriate. Under the traditional “community of interest” test, when a union prepared a petition with a proposed unit of employees to vote on whether they would 12

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be represented by the union, the Board would make the determination of whether the employees listed on the petition were appropriate, or whether the proposed unit should be expanded to allow other similarly situated employees the opportunity to vote on union representation as well. Unions routinely crafted the petition to contain the smallest possible group to vote, whereas employers sought to expand the unit of voting employees to get a more accurate representation of what all employees in the workplace wanted in terms of union representation. Under Specialty Healthcare, the Board moved from the traditional community of interest test and expanded the test to a multi-step analysis. First, the Board would determine whether the petitioned-for employees were readily identifiable as a group and shared a sufficient community of interest with the other petitioned-for employees. If the Board found the petitioned-for unit was appropriate under the first prong, the burden shifted to the employer to demonstrate that additional employees shared an “overwhelming community of interest” with the petitioned-for employees. This “overwhelming community of interest” standard was nearly impossible for employers to meet, resulting in fractured units or small unions, each representing different segments of the same workforce. In PCC Structurals, Inc., a case in which Fisher Phillips partners represented the employer, the Board reinstated the traditional community of interest analysis to determine whether employees in a bargaining unit petitioned for by a union is appropriate. The Board restored the more simplified and practical analysis used for decades before Specialty Healthcare, examining factors such as whether the excluded employees and petitioned-for unit of employees: are organized into a separate department; have distinct skills and training; have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between job classifications; are functionally integrated with the employer’s other employees; have frequent contact and interchange with other employees; have distinct terms and conditions of employment; and are separately supervised. As a result of this decision, employers’ ability to combat “mini units” has been restored. Unions will no longer be able to establish a bargaining unit by organizing a small group of employees in an effort to infiltrate the whole workforce. This is a huge win for employers. Company Workplace Policies No Longer Under Siege Most employers consider company handbooks and policies an essential for orientation of new employees, or reference material for tenured staff. These handbooks and policies had increasingly been under scrutiny by the NLRB for restricting employee rights to protected concerted activity until recently. Under the Lutheran Heritage Village-Livonia decision, the Board ruled that a facially-neutral workplace rule or handbook policy could still violate the National Labor Relations Act (NLRA) if employees could "reasonably construe" the rule as preventing them from exercising their Section 7 rights to protected concerted activity. Protected concerted activity is when two or

more employees join in some way to express concerns over terms and conditions of employment. Some of the more common policies identified as problematic by the Board include: social media; workplace photography and recording prohibition; conduct toward management; conduct toward other employees; e-mail usage for soliciting union membership; and leaving the workplace.

Raytheon Network Centric Systems re-established precedent, confirming that merely continuing a past pattern of unilateral changes following the expiration of a collective bargaining agreement neither disturbs the status quo nor creates an obligation to bargain with the union.

In December 2017, the Board overruled Lutheran Heritage in a decision involving Boeing’s no-camera-enabled devices on its property policy. In the The Boeing Company decision, the Board established a new, more reasonable standard under which the legality of employer policies and handbooks will be assessed. The Board directed future panels to evaluate whether a seemingly neutral employer rule or handbook policy violates the Act by considering: (1) the nature and extent of the challenged rule’s potential impact on NLRA rights, and (2) the legitimate justifications associated with the rule. This means the Board will now weigh an employer's business interests against potential interference with employee rights, as opposed to the former Lutheran Heritage standard's sole focus on employee rights.

While another victory for employers, the Board was careful to note that its holding has no effect on the duty of employers to bargain upon request by the union. So while employers have the right to take unilateral actions based on past practice, employers are still obligated to bargain over any changes upon request by the union.

This new standard is especially good news for employers who have been hindered from mandating civil and professional behavior in the workplace. Back to Old Law in the New Year! Finally, in the Raytheon Network Centric Systems decision, the Board again returned to decades of prior board precedent. Traditionally, the NLRA blocked unionized employers from making unilateral changes to employment terms. The Board, however, generally held that contract revisions consistent with past practices were not “changes” in certain cases. That all changed with the Board’s 2016 E.I. Du Pont de Nemours, decision. In the E.I. Du Pont de Nemours decision, the Board held that actions consistent with an established past practice constitute a change, and therefore require the employer to provide the union with notice and an opportunity to bargain.

What to Expect in 2018 The Senate is expected to confirm another Trump nominee in coming months for the seat vacated by Chairman Philip A. Miscimarra. Be on the alert in 2018 for new Board decisions that could continue to change other workplace issues, including employee protests, company bargaining obligations, and the rights of workers to use employer email systems.

Chantell C. Foley, Attorney Fisher Phillips Louisville Office cfoley@fisherphillips.com www.fisherphillips.com

Robert Ratton, Attorney Fisher Phillips Memphis Office rratton@fisherphillips.com www.fisherphillips.com

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#WeToo

Need More than Compliance By BRAD FEDERMAN and FRANK LANIGAN

Over 50 years ago, the Civil Rights Act of 1964 outlawed discrimination based on race, color, sex, religion or national origin. Nearly 20 years after that, The United States Supreme Court formally recognized sexual harassment as a form of discrimination under Title VII. As time went on, the law changed and adapted to protect against even more types of discrimination. This was seen as progress; a strong and moral direction for the country and for all organizations. With all of the many activities centered on compliance, employers and employees should expect less discriminatory behavior. Right? Yet, in 2018, the opposite seems to be true. Think about all of the compliance activities we engage in. Here is just a partial list:

• Multiple policies on harassment, sexual harassment, discrimination and bullying • Policy sign offs • Complaint procedures • Investigations • Manager training on discrimination and harassment • Employee training on discrimination and harassment • Anonymous hotlines and websites Even with strict regulations and scheduled activities in place to combat harassment and discrimination, the Equal Employment Opportunity Commission (EEOC) recorded over 91,000 charges filed in 2016. In addition, accusations through movements such as #MeToo and #TimesUp on social media platforms have shown that harassment continues to go unnoticed in many industries across the country, with the most prominent being in film and entertainment. In an increasingly connected world with the spread of social media and internet usage, discrimination and harassment does not easily go unnoticed as it may have even two decades ago. How does a company who routinely practices safe and compliant policies protect themselves when compliance activities seem to be failing? To find a solution, we must take a holistic approach and observe the real ramifications of harassment, and how organizational culture can provide lasting protection for employees and employers. The cost of harassment comes in many different forms, including scarring public relations situations, lowered employee engagement, and significant financial loss for an organization. From a purely monetary perspective, the average cost for a company to defend itself from discrimination cases is estimated to be between $125,000 and $450,000 dollars (SHRM and Hiscox) depending on the size of the company and the complexity of the case. This does not include potential settlements that may occur based on the outcome of the proceedings. Business Insider cites some harassment settlements costing companies as much as $250 million. Aside from financial loss, there are also the passive effects to consider for all employees. Decreased productivity and a high turnover rate can plague organizations who undergo lawsuits for harassment or discrimination. From an outside perspective, the public’s trust in the company plummets and potential new hires are less eager to join the organization. All of these factors will contribute to economic loss in the end, and a poor reputation is not an easy thing to eliminate. 14

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Solutions to these issues begin with training upper-level employees—executives, supervisors, and managers of an organization. Training for these employees has historically been concerned with legal liability and nothing more. This is the mindset that must change: training must move beyond compliance in order to become an effective tool for harassment prevention. Every workplace is different in some way, and so a “one size fits all” approach to harassment prevention training will not truly protect employees or employers. When this baseline legal liability training is used, an employee feels as if there is no one to turn to within their organization, including the Human Resources department, because the only concern is for legal and financial protection, not the health and stability of the employee. The EEOC estimates that nearly 75% of all employees who have been harassed have not spoken to a manager or supervisor about the situation, which is unhealthy for the employee and for the company. When training is done correctly for upper-level employees, they become an avenue to those employees who need to address their experiences. This is an invaluable asset to an organization, and an excellent first step towards a proactive culture shift. While lower-level employees should not be expected to spearhead training initiatives, they should be responsible for observing and reporting these behaviors, not acting as a complacent spectator. Several new types of training to address this issue are currently in use by some organizations. One particular type, called Bystander Intervention Training, is used to combat sexual harassment or assault on university campuses. This sort of training empowers and challenges the employee to do more in these situations. In addition, programs known as civility training take a different approach and focuses on supporting a universal respect and courtesy between colleagues in the workplace. Concepts such as these will hopefully continue to raise the bar from legal compliance to a well-defined and safe organizational culture. Company policy is another matter that must be reviewed and adaptable concerning harassment and discrimination as their definitions change or broaden. What was once not legally considered discrimination may now be enforced by law, such as the 2017 law that requires employers in California with 50 or more employees to provide training on policies that prohibit harassment based on gender identity, gender expression, and sexual orientation. While it can be a serious undertaking, policy review can pay dividends for both employers and employees who want clarity in company regulations. For example, a recent poll from the Pew Research Center found that 65% of all adults use social media—a number that is expected to rise over the next decade. While it is a useful and increasingly necessary tool to have for an organization, there can be obvious issues with harassment over social media platforms, which policy-makers should keep in mind while revising current policies. Some companies adhere to forced arbitration, which means its employees must resolve harassment claims out of court and out of the public eye. For many victims, this does not provide an end to the problem, but merely shields the harasser from harm. Even as most organizational policies tend to lean towards secrecy in these situations, an increasing number of allegations have emerged in the public eye, though companies are being pressured now more than ever to eliminate this policy. Policies should be clear and accessible, with clear avenues for employees to follow if the need arises. In

addition to a written document, policies regarding the process of filing complaints should be consistently communicated to employees. As an employer, it can often be difficult to feel the culture of your organization from the top. Luckily, there are tools that can assist in getting an honest and anonymous opinion from employees. A Climate Survey, when administered and analyzed professionally, will provide you with a strong idea of your employees’ thoughts and feelings towards many facets of the organization, such as creativity, innovation, interpersonal relations, leadership, or development. The vital step after collecting data from a climate survey is to address, within company means, any glaring issues employees may have. This shows employees that upper management listens to their opinions and ideas, and will help to build trust within an organization. In addition to assessing organizational climate, inclusion surveys can more specifically highlight problems those areas which could lead to harassment or discrimination issues. If an organization receives significant negative feedback from a certain group of individuals based on race, religion, sex, or national origin, then upper management can take the necessary steps to address key issues before a situation devolves. With proper execution, a Climate and Inclusion Survey can be instrumental in gaining a better understanding of your organization.

While all of the previous ideas will assist in a positive culture change, it is almost always necessary to implement culture and inclusion training in order to provide a clear and overt guide for the organization’s new expectations. According to Fortune magazine’s 500 top companies, only 3% are transparent about the demographics of their workforce. Culture and inclusion move past the idea of “diversity for diversity’s sake,” and pushes all employees to recognize differences with respect and help one another to succeed in a healthy environment. Diversity can be established from a headcount of employees, but inclusion goes deeper and must be a sustained aspect of organizational culture. Cases of workplace harassment and discrimination will continue, and likely increase in number, if steps are not taken by employers and employees on all levels in an organization. The conversation is evolving from “What should we do?” towards “Who should we be?” We need to stop reaching for the floor and start reaching for the ceiling. Culture starts at the top. How committed is your executive team? While the process will not be as fast as many companies and employees would hope, it provides the chance for lasting change that moves beyond compliance—creating environments where people feel safe, valued and respected on a consistent basis.

In a similar way, as a manager, holding team meetings and huddles provide you with the ability to share your vision, set objectives, and give your team a chance to voice their ideas in a way that promotes unity and equality for everyone present. Emotionally intelligent leaders will take this time to listen, watch for non-verbal cues, and gauge the attitude of their employees in a face-to-face setting. Whether it is a discussion or a regulated time period for each employee to explain their current projects, it is an advantageous exercise to do on a regular basis.

Brad Federman, Chief Operating Officer F&H Solutions Group bfederman@fhsolutionsgroup.com www.fhsolutionsgroup.com

Frank Lanigan, Human Resources Analyst

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Tennessee Workers’ Compensation Update By FREDRICK R. BAKER

The Tennessee Workers’ Compensation Law underwent sweeping changes in 2014, including a new formula for permanent disability, a new administrative court system, and a new causation standard. Since then, the Tennessee legislature, the Tennessee Bureau of Workers’ Compensation, and the new administrative court system have been busy fleshing out the new system. Indeed, 2017 brought several critical changes to the Tennessee Workers’ Compensation Law.

I. 2017 Legislative Changes by Tennessee General Assembly We will begin our review of the 2017 revisions by focusing on the actions of the Tennessee General Assembly. With regard to medical panels, the basic rule is that employers must provide to the injured worker a panel of three or more independent physicians, surgeons, chiropractors, or specialty practice groups, if available in the employee’s community, from which the employee may choose the authorized treating physician. The 2017 changes impact situations in which there are not three or more independent physicians, surgeons, chiropractors or specialty practice groups available in the employee’s community.

In such circumstances, medical panels must now contain three or more independent providers or specialty practice groups not associated in practice together within a 125 mile radius of the employee’s community. In this context, the phrase “not associated in practice together” means that at least one provider or specialty practice group is not associated in practice with another provider or specialty practice that is on the panel. Essentially, where there are not three or more options in the local community, and an employer is expanding beyond the usual range of the community, only two of the providers can be associated in practice. At least one of the options on the panel must be independent of the other two. This will be particularly important for employers located in rural areas where the choices for medical providers is limited. This change was effective May 18, 2017. Another important legislative change is the creation of a vocational rehabilitation program within the Tennessee Bureau of Workers’ Compensation. Specifically, the “Second Injury Fund” has been renamed the “Subsequent Injury and Vocational Recovery Fund.” The Fund now has a new responsibility to determine the appropriateness of applications for vocational recovery assistance and to pay out such benefits. Vocational recovery assistance may include vocational assessments, employment training, job analysis, vocational testing, GED classes and testing, and education through a public Tennessee community college, university, or college of applied technology, including books and materials. Assistance is capped at $5,000.00 per employee per fiscal year and must not exceed the total sum of $20,000.00 per employee who participates in this program for all years. The total aggregate amount to be paid from the Subsequent Injury and Vocational Recovery Fund is limited to a total of $500,000.00 in any calendar year. This new vocational recovery assistance is applicable only to injuries occurring on or after July 1, 2018, and a sunset provision prohibits it from applying to injuries on or after June 30, 2021. 16

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The Tennessee legislature also made a small but important change for death benefits. Under prior law, recoverable burial expenses were capped at $7,500.00. Under the new law, the cap has now been increased to $10,000.00 – an adjustment to reflect the ever-increasing costs for funerals. This change was effective May 18, 2017. The recent legislative changes further alter the utilization review system. Employers are now restricted from sending certain medical recommendations to utilization review in the early days of a workers’ compensation claim. For instance, utilization review may not be used for diagnostic procedures ordered in accordance with the Medical Treatment Guidelines by the authorized treating physician within the first 30 days after the date of injury. Likewise, utilization review may not be used for diagnostic studies recommended by the treating physician when the initial treatment regimen is nonsurgical, no diagnostic testing has been completed, and the employee has not returned to work. The clear intent of these two provisions is to prevent medical treatment at the outset of the claim from being hindered by what the legislature views as unnecessary disputes over medical necessity. This change was effective May 18, 2017.

II. New Regulations Enacted by Tennessee Bureau of Workers’ Compensation In 2017, the Bureau of Workers’ Compensation was quite active updating several sets of workers’ compensation regulations. For instance, the regulations governing utilization review were amended in January 2017. For the most part, the time requirements of a utilization review have remained unchanged. An employer shall submit a case for utilization review within three business days of the notification of recommended treatment. Once sent, the utilization review organization must render a determination about medical necessity within seven business days of receipt. However, a regulatory change for 2017 provides that a utilization review decision to deny a recommended treatment shall remain effective only for a period of six months from the date of the decision without further action by the employer. Thus, any requests that come from the treating physician with regard to the same type of treatment remain prohibited under that initial utilization review denial for a period of six months. However, there can be circumstances in which the treating physician documents some material change that supports a new review or other pertinent information that was not used by the utilization review organization in making its initial determination. The new regulations also clarify that treatment recommendations shall not be denied if they follow the Bureau’s adopted Medical Treatment Guidelines. Another important set of regulatory changes from June 2017 involved the implementation of new procedures for penalty assessments and contested hearings. The new regulations clarify that a Bureau employee may accept information concerning possible non-compliance or a possible rule violation from another Bureau employee, from within the Bureau, from within the Department of Labor, from other governmental agencies,

through an investigation or inspection, from governmental records, or from any lawful source. Unsurprisingly, this represents a great expansion of the possible sources where a penalty referral can originate. The new regulations also outline a comprehensive and detailed procedure for the initiation, investigation, hearing, and appeal of penalty assessments. While an in-depth discussion of these new procedures is not appropriate for this article, a definite conclusion may be drawn from the fact that the Bureau has invested so much time and energy in building this procedural structure – namely, that employers and carriers should brace up for the ramped up assessment of penalties in 2018 and beyond.

III. New Cases from the Administrative Court System Our third source of updates for the Tennessee Workers’ Compensation Law is the administrative court system. Since their creation in 2014, the Court of Workers’ Compensation Claims and the Workers’ Compensation Appeals Board have been busy. One place where the courts have been focusing their attention is penalties. For instance, in Berdnik v. Fairfield Glade Community Club, the Workers’ Compensation Appeals Board referred the employer to the Penalty Program for determination of whether a penalty was appropriate for the failure to provide a medical panel. Likewise, in Johnson v. Stanley Convergent Security Systems, a single Appeals Board judge in a concurring opinion referred the employer to the Penalty Program for investigation of Employer's actions in failing to provide Employee a panel of physicians. Interestingly, in both cases, the employers were referred to the Penalty Program despite prevailing on the issue of whether substantive workers’ compensation benefits were owed. Again, this sends a clear message to employers that in 2018 the Bureau may heighten its enforcement efforts for the many potential penalties that exist under the Tennessee Workers’ Compensation Law.

The Appeals Board also addressed an interesting application of the Recreational Activity defense. In Pope v. Nebco of Cleveland Inc., a car salesman injured his knee participating in a “mud run,” which was a recreational charity event sponsored in part by his employer, a car dealership. The employee argued that his participation was “impliedly required” by the employer, due to pressure from a co-worker and general manager. The Appeals Board rejected this argument, reasoning that although the employee may have felt peer pressure to participate, such pressure does not by itself amount to an express or implied requirement to participate. The employee also argued that participation in the event was during working hours and part of his work duties. The Appeals Board also disagreed with this argument. While the mud run did occur during normal working hours, the employee was not paid for his time away from the dealership, he was not required to sell any cars while there, and he was not required to wear any clothing to identify him as an employee of the dealership. Based on these facts, the injury was found to be not compensable.

IV. Conclusion While 2017 did not bring any radical changes for Tennessee Workers’ Compensation Law, we did see several important additions and clarifications to the sweeping 2014 changes that are still in the process of unfolding. Stay tuned for more changes in 2018 as the system continues to evolve.

Fredrick R. Baker Wimberly Lawson Wright Daves & Jones, PLLC Member of the Cookeville, Tennessee office fbaker@wimberlylawson.com

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We've helped organizations face the management challenges that come with a rapidly expanding staff and customer base. We also assist new business ventures map out their company's future, both strategically and operationally. Our signature approach is to listen and fully understand your company so that we can then partner with you to realize your own unique vision.

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Artificial Intelligence and Other Tech Trends That Succeed Often new phrases surface at the HR Tech Conference (or reach a volume) that get people buzzing. Three years later, they disappear into real software functionality or oblivion. Did you hear much about predictive analytics this year, while artificial intelligence smacked you in the face on the show floor? Even more subtle themes snaked their way through the sessions.

By BILL KUTIK

Tech Co-Chair Steve Boese blogged that people are always asking him what the "theme" of this year's conference will be. I think his answer is the same as mine was for 16 years: "Whatever's new and important." Hard to judge what that would be almost a year earlier as the speaking proposals come in.

What happened? The big vendors realized it was a good idea and partnered with the smaller ones. And then in the most dramatic case, PeopleSoft announced six months later that ESS was strategic and had to be developed and sold without a partner. Its partner Edify (after bulking up for all the expected new customers) broke up its parts, went out of business, and sold its HR software to Workscape (later acquired by ADP).

But every few years a new phrase surfaces at HR Tech Conference, or just gathers sufficient volume there, that it really does get people buzzing (why else call it a "buzzword"?). Within three years, the buzzwords generally disappear: either into real software as new functionality or just into oblivion.

The point is ESS was a buzzword that actually entered the fabric of our systems and our lives, though it never worked as well as it should because employees were confused by software they had to use so infrequently.

To put the current buzz into context, consider the following two opposite historical examples.

Now, vendors are promising to replace it with a digital assistant that can deliver HR answers to employees without their hunting through the system at all! So ESS was definitely a keeper.

In 1998, the same year as the first HR Tech Conference, Lexy Martin and David Link debuted The Hunter Group Survey of HR Systems â&#x20AC;&#x201C; research that is still flourishing 20 years later under Stacey Harris, after a half-dozen corporate owners and names. The first report was entirely about the adoption of employee self-service! In that same year, a handful of small vendors was still selling separate employee self-service technology meant to be integrated into the big HR systems. Naturally, the big systems didn't bother building that functionality because, 20 years ago, they knew their software was used solely by the HR department, not employees. Some of the small vendor names were Edify, Conduit, Interlynx, ESSence and iClick. 18

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Not so the following year's biggie: knowledge management or human intellectual capital management. The idea, back then, was to manage a company's structured data to be able to retrieve both it and what employees already knew to maximize productivity and profits. And that HR should handle it! The idea was reflected big in that yearâ&#x20AC;&#x2122;s HR Tech Conference. A keynote panel featured Vinnie Mirchandani, then with Gartner and now the sole proprietor of Deal Architect; Joel Summers, the original top dog of HR software at Oracle; and Juan Moran, no longer the CEO of Meta4, still headquartered in Spain and selling its HCM around the world.

The father of the intellectual-capital concept, Leif Edvinsson, delivered the closing keynote via a truly primitive, low-quality private connection from Sweden during the relatively early days of video conferencing. The result: HR did absolutely nothing. IT tried a few knowledge-management projects, but as you know, now the focus has shifted to finding the expert within the company who knows something rather than finding what it is he or she knows. Equal buzz; totally different results. This year, artificial intelligence was touted by vendors, large and small. The large ones included The Big Three (Oracle, SAP SuccessFactors and Workday), Ultimate Software and Works Applications, the largest HCM vendor in Japan. Definitions of AI vary widely and few agree on them. It’s still a work in progress. But I think AI will be a keeper -- though it will certainly take some time -- because it has already failed spectacularly once before, back in the Paleolithic era of 1986. That's when computer scientists from MIT and Harvard were all working on it as the next big thing. I knew about it from editing my friend Esther Dyson's leading computer industry newsletter, which nearly folded from devoting all its coverage to AI. HR actually benefited from that effort, when AI expert Tod Loofbourrow developed a product called Beneflex to answer employee benefit questions (ESS again!) and later changed his company’s name from Foundation Technologies to Authoria. (Eventually, it was sold and became PeopleFluent.) Beneflex was knowledge-engineered and hard-coded, which few now would consider AI. Even though the software knew all about you, it still took several clicks to find your answer. If you really want to get current on the state of AI in HR, start by watching six minutes of Deloitte expert Christa Degnan Manning on Firing Line with Bill Kutik for an excellent primer and foundation. If you want to build an AI house consider a modest investment in John Sumser's new report: "The Emergence of Intelligent Software." Go to www. HRExaminer.com to read excerpts and order, if you like. People often ask, "What constitutes a trend?" I take my cue from the old hit song by Arlo Guthrie (yes, the son of more famous folksinger Woody Guthrie) called Alice's Restaurant. In

you really want to get current on the state of AI in HR, start by watching six

it, he sings if you have three separate people saying the same thing, you've got a political movement! Of course, he was being ironic. But in business terms, I think three constitutes a genuine trend, just so long as they weren't all talking about it beforehand. At this year's HR Tech, our top two thought leaders -- Josh Bersin in his closing keynote and Jason Averbook in his "Mega Session" -- both said that, in the future, HR could not possibly run all its applications on a single technical platform because with so much innovation coming from smaller vendors, they would have to integrate with some of them or miss out on a lot. David Ludlow, group vice president at SAP SuccessFactors, says much the same thing on his Firing Line interview. And SAP first popularized that idea when it came to the U.S. in 1993 with its ERP (Enterprise Resource Planning) system, which at the time tried to include every line of software code that a company would need to do business. All on one technical platform. In debunking that, David was referring to his own experience running SAP on-prem for 12 years and the straitjacket it put him into coordinating every innovation with all the other software pillars. David then made the exact same point that Josh and Jason made. He was also referring (competitively) to Workday's tag line: "The Power of One." To be fair, while Workday does mean a single platform in that tag line, it includes more: all customers being on the same software version (the goal of all SaaS vendors) forming one community with the same online experience and just about everything in common. Plus, one mobile app and security model. But after hearing the three pros, I'm convinced that the “Power of One” will become the “Power of Many.” As John Sumser writes tongue firmly in cheek about AI: "Self-driving cars transport workers . . . to paradise -- where there is no more work." Copyright LRP 2017

minutes of Deloitte expert Christa Degnan Manning on Firing Line with Bill Kutik for an excellent primer and foundation.

Bill Kutik, Columnist Human Resource Executive® Independent Technology Analyst bill@kutik.com www.HRProfessionalsMagazine.com

HR’s Ultimate Background Screening Checklist for 2018 By LISA MAY

eing tasked with finding, attracting, and retaining high-quality A players is key for HR if they want to build a productive company that edges out the competition. Even the candidates that look good on paper and perform well in the interview can still be the wrong choice. Much of it hinges on their pasts. Making sure the applicant is qualified for the job, as well as a safe addition to the workplace, means conducting a thorough background check. HR professionals must stay updated on the tools available to them if they want to make the best, most informed decision possible. Here is HR’s ultimate background screening checklist for 2018 The first 4 deal with the information you are gathering.

Are you able to verify their education? If an educational background is essential for a position, it pays to not take the applicant’s claim at face value. They could have easily bought a fake diploma online. Verify all education directly from the institution through a third-party background screening company. The next 4 cover the background check process itself. Does every single applicant sign an agreement to be screened? One of the key responsibilities of the employer is to disclose any screening process to the applicant. The employer must disclose in writing to the applicant that they will be the subject of a background report as part of the employment selection process. This document needs to stand alone, it does not need to be part of the employee handbook or the application. Is your screening process relevant on a per-hire basis? Using criminal history and credit history to screen for employment is under scrutiny. Exclusion of applicants based on conviction records is prohibited unless the employer can show that it considered: 1) the nature and gravity of the offence or offences

Are you searching criminal records properly?

2) the time that has passed since the conviction and/ or completion of the sentence

A common misconception is that a single criminal search returns complete information on a person. It does not. Different crimes are held in different places. So, if you only conduct a national criminal search, you may miss crucial information. Consider using county, federal and national database searches as part of your background screening process.

3) the nature of the position held or sought.

Do you have a drug screening process in place? The drug abuse crisis can overwhelm a company! Put measures in place to avoid the risk of hiring a drugaddicted candidate. There are a variety of drug testing tools, from saliva to hair to urine testing, that can assist in uncovering a job seeker’s drug use. Can you tap into the applicants’ previous employment history? The best way to predict future behavior is to analyze past behavior. If you are not using a third-party screener to conduct employment verifications, you may be missing information on the employee’s performance, his honesty, punctuality, and overall motivation. In fact, he could be lying about employment dates, or may have never worked there at all! 20

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Make sure the background screening tools you use are relevant to the specific position. Are the background check tools you use consistent across candidates? Checking an applicant’s background because you don’t like the way they look can get you sued. If you are going to screen one candidate for a position, you need to screen them all in the same manner. Set a documented policy of your background check standards and stick to it. Are adverse action notices mailed out in a timely manner? If the background check returns information that makes you not want to hire the person, it doesn’t end there. You must notify the applicant, provide a copy of the background report, and provide “A Summary of Your Rights under the Fair Credit Reporting Act.” The applicant may contact the background screening company if they want to dispute any information in the background report. If the employment decision is adverse, send a notice of adverse action to the applicant. There needs to be

reasonable time (usually at least 5 business days) between the Pre-Adverse Action Letter and the Adverse Action Letter. The 4 final points relate to compliance, which minimizes your company’s chances of getting sued for faulty hiring practices. Does your background screening process line up with state and local laws? Employment law is hot right now, and a variety of laws have been passed recently or are in the works. Stay abreast of the regulations in the cities and states you do business. Otherwise, you could be out of compliance and open to costly hiring litigation. Is your background check vendor reputable and trustworthy? Third-party background screeners are not created equally. Make certain you partner with one that is accredited by the National Association of Professional Background Screeners (NAPBS), that has been in business a long time, and that can explain specific practices they have in place to ensure accuracy in the reports they return to you. Are your methods discriminatory to certain populations? Design your policy to be objective and fair, regardless of age, race, religion and other factors. It’s best to be able to prove you are compliant with all EEOC guidance by keeping records of uniform screening and hiring practices. Documentation will go a long way toward protecting you against lawsuits. Do you have a written background check policy? Does everyone who is involved in the hiring process understand and follow it? As mentioned above, a written plan that covers who, how, and when you screen is essential in ensuring your company is protected. Periodically review this policy with each individual involved in your hiring process, and make certain they understand it and are following it to the letter. Choosing the best new hires while protecting your company’s reputation and the safety of your workplace may seem like a tightrope act, especially in the litigious society we live in today. However, by taking a hard look at your current hiring processes, and tweaking them as necessary, you can be confident that your background screening process is fair to the applicant and helpful to you.

Lisa May, Senior Vice President Data Facts, Inc. lisa@datafacts.com www.datafacts.com

TALENT ACTIVATION: How StandOut Turns Human Potential into Business Performance

1 1 (L-R) Kelly Johnson with the Marcus Buckingham Company, Alanna Brooksbank with ADP, Jeff Phelps with ADP, Hunter Acosta with ADP, Kyle McElhaney with ADP, and Jenny Southcomb with ADP Kelly Johnson, strategist and keynote speaker with the Marcus Buckingham Company, spoke on why HR needs to change its focus from managing talent to activating it. Today’s increasingly competitive marketplace paired with the low unemployment rate has made attracting and retaining talent a top priority for HR. Participants learned how to capitalize on the four seismic shifts happening: • From tools for the organization to Tools for the team leader • From infrequent, suspect data to Real-time, reliable data

• From Siloed programs to Unified solutions • From Theoretical models to Real-world behaviors

The event was held January 9 at the Crescent Club in Memphis. ADP and HR Professionals Magazine were co-sponsors.

4 2 (L-R) Kyle McElhaney with ADP, Kevin Hommel with Memphis Invest, Mike Bruno with HRO Partners, Jenny Southcomb with ADP, and Hunter Acosta with ADP. 3 (L-R) Jenny Southcomb with ADP and Vanessa Frazier with MIFA 4 (L-R) Alana Brooksbank with ADP, Cynthia Thompson, John Daniel with First Horizon, Judy Bell with Judy Bell Consulting, and Steve Franklin with CityGear, LLC

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The Business Case for Compliance By ALAN CRONE

For over 25 years I have had a ring-side seat of hundreds of employment disputes as an attorney. I represent primarily employees but I have represented from time to time right thinking employers as well. The cost of employment lawsuits on all the parties is huge. The cost far exceeds the cost of the settlement or verdict, the attorneys’ fees and litigation costs and expenses. The disruption to lives, business opportunities, relationships, and long held beliefs far outweighs the purely economic costs which are admittedly significant. I am often asked what lessons have I learned in those countless depositions, hearings, mediations, and trials? What can HR professionals do to avoid lawsuits and reduce employment litigation costs? There is a simple one-to-one ratio to prevent employment discrimination lawsuits: Do not fire anybody. If you do not fire an employee, there will not be a wrongful termination lawsuit. I am not advocating keeping incompetent, dishonest or insubordinate employees. Granted, no matter how hard you try some bad apples will get by the filter. Companies must do everything reasonable to insure that they hire the best most qualified person for the job at hand AND that they provide follow up, training, and accountability to make sure the employee can be successful in the long term. There are no simple solutions, however I do suggest three simple strategies as a great start, that if you follow them you will reduce the number of employment related claims, complaints, and lawsuits: 1. Draft and maintain hyper-accurate job descriptions; 2. Communicate clearly the company’s expectations for employees and confront them when they do not live up to those expectations; and, 3. Refocus compliance efforts as training rather than as discipline.

Job Descriptions The basic foundational document for any HR compliance program is the written job description. A job description should inform candidates and incumbents about the essential functions of the job, the qualifications necessary to perform the job, the physical and intellectual requirements of the job and other information. An accurate job description can also be tremendously valuable as a management tool, because job descriptions are useful for management at high levels to make staffing and compensation decisions. It is a critically important document. Alas, it is also one of the most overlooked and botched documents. 22

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All too often business operations leaders do not allow HR to bring to bear sufficient time or resources to create really useful job descriptions and/or companies do not perform audits or reviews of job descriptions frequently enough to insure that active job descriptions are still accurate. Many factors can erode the accuracy of job descriptions such as: insufficient investigation or second hand information to determine, the actual qualifications and abilities needed to perform the functions of the job; failure to nail down what the real essential functions of the job actually are; the passage of time alters the functions the incumbents’ perform because of extemporaneous alterations or additions or subtractions from the incumbents’ duties due to changing operational needs; or, incumbents’ alterations of duties for personal reasons, to name a few. These inaccuracies in written job descriptions can have potentially devastating negative impact in management decisions and legal defenses. Upper level management often relies extensively on job descriptions to design and evaluate systems, processes, and labor needs. If this basic document is compromised then so too are the decisions made in reliance on the compromised documents. HR compliance is good business. Regular review and audit of job descriptions is necessary to insure that wide-ranging business decisions are based on accurate information. In almost every legal case the job description is a key document for a judge, jury, or attorney to review. If it is not accurate the company can lose valuable credibility. The Americans with Disabilities Act requires employees to be able to perform essential functions of their jobs with or without a reasonable accommodation. Job descriptions which contain false essential functions or omit such functions can bolster an otherwise meritless case. The Fair Labor Standards Act determines whether an employee is exempt or non-exempt based on the duties and responsibilities the employee actually performs, not what is written in a job description. All too often defense lawyers learn too late that the duties outlined in the job description are not in practice what they appeared to be on the four corners of the written document. This is normally due to the job description being outdated or slapped together without regard to accuracy. Drafting job descriptions is more than busy work drudgery. It is a real opportunity to contribute to the bottom line of the company. The process by which business units conduct the introspection to really determine how each job position adds value to the organization and functions within the larger system of delivering the companies goods and services can bring untold benefits. Yet HR professionals and companies frequently overlook this opportunity. Top-notch job descriptions will create operational efficiencies, less lawsuits, better hiring decisions more focused training and discipline, and less turnover.

Communication and Confrontation American businesses as a whole, in my opinion, are terrible at communicating expectations and confronting noncompliant employees. It is terribly important to make sure that people clearly know what is expected of them and then hold them accountable. It is amazing, based on facts learned in discovery during lawsuits (and other places) how frequently basic breakdowns in communication lead to poor performance and lawsuits and how clear communication could improve performance and avoid lawsuits. A job description is the first line of defense. If a function or task is important for success in the organization, then it should be in the job description. How can you hire the right person for the job if you cannot clearly articulate during a job interview exactly what the person will be doing? Basic items like showing up on time and regular attendance should not be omitted. If the function or qualification is important, write it down. Managers and supervisors should spend significant time with new hires during the onboarding process to fully discuss and train new hires on each function and how the function adds value to the unit’s success and contribution to the enterprise as a whole. Copies of the job descriptions should be made amply available to candidates, new hires, and long term incumbents. I find many times that complaining employees have never seen a job description or important policies and procedures except before or during the onboarding process. How can a manager hold an employee accountable to a set of expectations they are not confronted by on a regular basis? Managers cannot assume that an expectation or requirement is “obvious.” As soon as an employee is non-compliant they should be positively confronted with the issue. If the person is late once, for example then the supervisor should immediately deal with the infraction. The failure to tolerate small non-compliance leads to larger issues. People want boundaries. Inaction or silence about ongoing instances of non-compliant behavior leads certain employees to assume that the expectations or requirements are not real. Immediate and constructive confrontation on the behavior will lead in the long run to a better mutual understanding of whether the employee is a successful employee or has a real performance issue. The next step is to address improvement in a constructive manner. Frank and honest feedback on performance can ultimately lead to better performance and fewer terminations for poor performance.

Success Oriented Training vs. Discipline Lawyers like to see “progressive discipline” prior to a termination. The real reason for this is that juries want to see that the company gave the employee an opportunity to avoid getting fired. In part “fair play” is at the heart of progressive discipline. Unfortunately too many companies focus on the discipline rather than the remedial elements of

progressive discipline. Many companies’ efforts at progressive discipline look more like a set up than fair play. Sometimes the best exhibits for the plaintiff in a trial are the progressive discipline documents. When lined up together, the progressive discipline documents can be used by a skilled plaintiff’s lawyer to look more like, “the company was out to get my client,” than a fair attempt by the company for the employee to correct poor performance. Documents and testimony should communicate that the company bent over backwards to give the employee every reasonable opportunity to be successful. Organizations must have a training focus rather than disciplinary focus and have emphasis on the company’s efforts to correct, modify, or eliminate certain behavior, will have better effect. Terminology laden with “training words” rather than discipline words can help. It’s crucial for supervisors and managers to receive training to approach non-compliance in a positive training mindset is crucial. Companies should take care to inculcate an ethic of clearly communication of expectations, training when employees fail to meet expectations, and prompt accountability all to make the employee successful rather than discipline as mere prelude to termination as it so often appears. It is impossible to achieve this unless the company from the CEO to the line level employees has a clear understanding of “what it takes to be

successful” at the company. Job functions, duties, and responsibilities must be clearly written and communicated to candidates and employees. Anyone tasked with making hiring decisions must have the discipline not to hire someone who does not have necessary qualifications, skills, or who cannot be trained to excel at the job. Companies must take the time to thoroughly train initially and retrain and upgrade employees’ skills and abilities on an ongoing basis. Managers and supervisors should not hesitate to confront subpar performance. Companies should also be honest, frank, and transparent when communicating adverse employment actions. “You have a bad attitude”, “it’s just not working out” or “I don’t have to give you a reason why I am firing you” will more often than not send a terminated worker into the arms of a plaintiff’s lawyer. If employees know the expectations, if they know what it takes to meet or exceed those expectations, and companies communicate timely, clearly, and objectively when they fail to meet the expectations, then they will accept adverse employment actions such as termination with more resignation and not seek out legal action. Termination decisions should be based on specific identifiable facts not conclusions. “You have a bad attitude” is a conclusion. What are the facts upon which that conclusion was based? Make a list. Communicate that list. I often counsel my clients in the middle of a discipline process who feel they are being treated

with illegal discrimination to ask: “What are some specific things I can do (or not do) to succeed?” “Can you give me specific examples of the conduct/behavior/failure you are talking about?” “How long do I have to comply?” “Can you give me more training so I can succeed at this?” I am amazed how often those questions (always contained in an email) are ignored, answered poorly, or met with subjective nonsense. These exchanges are some of the best exhibits. This failure to make corrections or discipline objective is born in a lack of commitment by the company to fix and communicate expectations and hold people accountable timely by positive confrontation. Costs associated with people, salaries, benefits, training, and retention are the largest line items in an organization’s budget. Mistakes with people can be very costly. Hiring the wrong person can cost the company far more than hiring the right person can gain the company. Operations people often overlook the great business benefits HR professionals and lawyers can create inside their organization. Employment law compliance is not just obeying the law; it is good business.

Alan G. Crone, Attorney Crone Law Firm PLC acrone@cronelawfirmplc.com www.cronelawfirmplc.com

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Tax Reform Considerations for Human Resources BY TIMOTHY KENNEDY

The impact of the tax reform legislation signed into law in December, the Tax Cuts and Jobs Act, will be felt in human resources departments as well as in finance and accounting. Below, we’ve highlighted modifications of potential interest to HR executives that are beyond the law’s headline changes to tax rates and the standard deduction. The new provisions take effect in 2018 unless otherwise noted.

• Expands Disincentives for Certain Executive Compensation – The tax code has long prohibited

publicly-traded corporations from deducting compensation in excess of $1 million per year paid to certain top officers, but provided carve-outs from that limit. The new law modifies the definition of executives covered by the deduction limitation and removes some key carve-outs: executives covered by the deduction limitation in 2017 and later are now permanently covered (even after termination) and a widely-used exception from the limitation for performance-based compensation (as well as an exception for commissions) has been eliminated, though compensation paid under certain agreements entered into prior to November 2, 2017 is grandfathered under the old rules.

The law also effectively extends this limitation to nonprofits. As nonprofits generally are indifferent to tax deductions, the new law imposes a 21 percent excise tax on compensation in excess of the $1 million threshold that a nonprofit pays to a covered executive. The organization’s five most highly compensated executives in a year become covered executives and remain so thereafter. The new law also extends to nonprofits the golden parachute rules that apply to for-profit corporations by imposing a 21 percent excise tax on payments made to certain terminating executives that exceed three times their base compensation. Notably, these new rules exclude compensation paid to licensed medical professionals for medical services.

• Adds a Temporary Tax Credit for Certain Paid Leave Programs – For 2018 and 2019, an

employer offering a paid family and medical leave program may be able to qualify for a tax credit of up to 25 percent for payments made under the program to an employee who earned less than $72,000 in the prior year. To qualify for the credit, the paid leave policy must be in writing and provide for the payment of at least 50 percent of regular wages for at least two weeks for full-time employees who take a leave that would qualify under the Family and Medical Leave Act (FMLA). Part-timers must be eligible for at least a proportionately shorter period of paid leave and the policy must apply to all employees with at least a year of service. The credit is available if the employer or employee aren’t subject to the FMLA so long as the leave would otherwise qualify, but payments of the employee’s vacation, personal, or regular sick leave won’t be eligible for the credit. A maximum of 12 weeks of paid leave will qualify for the credit.

• Eliminates Deductions for Sexual Harassment and Sexual Abuse Settlement Payments and Attorney’s Fees If Payments Are Subject to a Nondisclosure Agreement – The law also

include a vague provision disallowing tax deductions for settlements or payments related to sexual harassment or sexual abuse, and any attorney’s fees related to the settlements or payments, if the settlements or payments are subject to a nondisclosure agreement. The rule does not define “sexual harassment” or “sexual abuse,” “nondisclosure agreement,” or the scope of the deduction limitation, so several elements will remain unclear until the IRS issues further guidance. For example, is a deduction prohibited for all payments related to a settlement resolving a sexual harassment claim and other claims if the settlement agreement contains a confidentiality provision? Is the employer precluded from deducting its own legal fees if it settles a matter involving a sexual harassment claim with an agreement containing a confidentiality provision? Does an agreement to keep the amount of a settlement confidential constitute a nondisclosure agreement that precludes taking a deduction? The vague wording in the statute even appears to prohibit a sexual harassment claimant from deducting the claimant’s legal fees if a nondisclosure agreement was part of the settlement.

This provision took effect on December 22, 2017, so HR executives overseeing the resolution of a sexual harassment claim should consult with their attorneys regarding the applicability of the deduction limitation. 24

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• Suspends the Moving Expense Reimbursement Exclusion and Moving Expense Deduction – Previ-

ously, employer-paid moving expenses were excluded from the employee’s income and FICA. An employee could deduct qualified moving expenses if the employer did not pay for them. The new law suspends both the exclusion and the deduction from 2018 through 2025, which means that employer relocation packages are now subject to both income tax and FICA. Moving an employee on a tax-neutral basis will now require a costly tax gross-up payment.

• Disincentives for Certain Fringe Benefits – Under

the new law, for-profit employers can no longer deduct expenses related to entertainment, amusement, or recreation, social club membership dues, the costs of social and recreational facilities, and commuter benefits (including parking fees) unless necessary for the employee’s safety. Additionally, the law limits the deduction for the cost of employer-operating dining facilities. However, the law does not change prior rules governing the inclusion of fringe benefits in employees’ incomes. For example, while an employer can no longer deduct the cost of a commuting benefit provided to employees, the previously allowed amount can still be excluded from employee income under the prior rules.

The law similarly imposes disincentives to offering commuter benefits and on-premises athletic facilities on nonprofits by treating amounts spent on those benefits by nonprofits as unrelated business taxable income.

• Allows Employees of Private Corporations to Defer Income on Stock Received Upon Exercising an Option or the Settlement of a Restricted Stock Unit – A new rule permits employees of certain private

corporations to defer income taxation for up to five years on the value of stock received from exercising an option, or in connection with the settlement of a restricted stock unit. The employer’s deduction is delayed until the value of the shares is included in the employee’s income, but FICA taxes will apply to the value of vested stock when it is received regardless of the deferral. The value of the stock ultimately included in the income of an employee who elects to defer is the value of the stock when it vested, even if the value declines during the deferral period. The new rule doesn’t apply to certain top executives and doesn’t apply if the employee has the right to sell back the stock to the corporation or otherwise receive cash in lieu of the shares. For the election to be available, the corporation must broadly grant stock-based awards to employees (to 80 percent of U.S.-based employees). The election may not be available if the corporation repurchased its stock in the prior year. Subject corporations will face penalties if they fail to notify eligible employees about the option to defer.

Timothy Kennedy, Attorney FordHarrison tkennedy@fordharrison.com www.fordharrison.com

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For Sponsorship Opportunities, contact Rebecca Harmon at 865.362.2341 Group rates available. Contact rharmon@deroyal.com

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2017 Tax Reform Highlights

– Impact on Health and Welfare Plans By STACEY L. STEWART

The

end of 2017 brought the passage of sweeping tax reform legislation. One might characterize the process as fast and furious, with both the House and Senate passing vastly different bills as the 2017 holiday season approached. In the end, the final bill signed into law by the President on December 22nd differs from the earlier Congressional bills, but still contains a smorgasbord of provisions affecting health and welfare plans. To make an understatement – it has been a challenge to keep track of where things stand. This article will give you an overview of the key provisions passed into the law known as the Tax Cuts and Jobs Act (TCJA) that affect health and welfare plans.

Individual Mandate Repeal (effective January 1, 2019) – Status of ACA Generally After many, many attempts by various political factions over the years to repeal the tax penalty imposed on individuals without health coverage, otherwise known as the “Individual Mandate,” the TCJA finally accomplishes the task. The Individual Mandate took effect in 2014 and generally requires most individuals to maintain a certain minimum level of health coverage or pay a steadily increasing penalty. The TCJA repeals this penalty effective January 1, 2019. The TCJA stopped short of enacting changes that directly impact employer-sponsored health plans. For example, the penalty imposed on applicable large employers who do not offer full-time employees a certain minimum level of group health coverage, referred to as the “Employer Mandate” or the “Pay or Play Penalty,” remains in effect. In fact, as 2017 drew to a close, the IRS began action in earnest to enforce these penalties as evidenced by the IRS Letters 226J many employers received around the holidays. The excise tax on high value health plans, known as the Cadillac Tax, also survived the TCJA intact. So, what does this mean for the Affordable Care Act (ACA)? For now it remains mostly unchanged. While certainly a key provision of the ACA, the Individual Mandate is only one piece of a much larger whole. Employers may question whether the repeal of the Individual Mandate will make it easier or harder to pass legislation aimed at repealing the Pay or Play Penalty. Once again, only time (and perhaps the results of certain upcoming elections) will tell. The Individual Mandate repeal, on one hand, could result in decreased enrollment in the ACA exchanges which, in turn, may reduce employers’ exposure to Pay or Play Penalties (since these penalties are triggered by employees receiving a premium tax credit for purchasing ACA exchange coverage). This result, whether perceived or actual, may make repeal of the Pay or Play Penalty less timely of an issue. On the other hand, the repeal could also reduce the enrollment of younger, healthier employees in employer group health plans possibly raising employer concerns over increasing plan costs and spurring more immediate debate for repeal of Pay or Play Penalty. In any event, this is certainly a topic to watch as the effective date for the repeal of the Individual Mandate draws closer.

Fringe Benefit Changes (Generally Effective January 1, 2018) In welcome news, the TCJA retains the tax advantages for many of the popular fringe benefit programs that an earlier House bill proposed to remove. Specifically, the ability for employers to provide tax-free reimbursement of certain expenses through tuition assistance programs and adoption assistance programs remains intact. Also, employers may continue to allow employees to pay certain dependent care expenses pre-tax through dependent care assistance programs. However, the TCJA does include a number of provisions that impact other employer fringe benefit programs. Qualified Transportation Fringe Benefits: Prior to the TCJA, employers generally could deduct and exclude from employee wages the cost of qualified transportation fringe benefits provided to employees, including certain parking, transit and commuting benefits. Beginning with the 2018 tax year, the TCJA denies employers deductions for qualified transportation fringe benefits. 26

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However, this new provision does not appear to impact the ability for employees to pay for (or an employer to provide) these benefits on a tax-free basis through a qualified transportation plan, with the exception of bicycle commuting benefits. The TCJA suspends the tax exclusion for bicycle commuting benefits from the 2018 through 2025 tax years. Qualified Moving Expenses: The TCJA also suspends the ability of an employer to pay or reimburse employees’ qualified moving expenses on a tax-free basis and its ability to deduct such reimbursements, except for certain moves by members of the U.S. armed forces. The suspension begins in 2018 and continues through the 2025 tax year. Employee Achievement Awards: The law currently allows employers to grant tax-free employee achievement awards of tangible personal property to employees based on length of service or safety. The TCJA clarifies that, effective in 2018, tangible personal property does not include cash, gift cards, general gift certificates, vacations, meals, lodging, tickets to sporting or theatre events, securities or similar items. However, the term would include a gift certificate or other arrangement that gives the recipient the right to select specific tangible personal property. Tax Credit for Paid Family and Medical Leave: The Family and Medical Leave Act (FMLA) currently provides certain job-protected leave in connection with an individual or family member’s serious medical condition (among other circumstances), but it does not require the leave to be paid. The TCJA creates a new tax credit, effective for the 2018 and 2019 tax years, for employers that provide at least two weeks of annual paid family and medical leave. The credit ranges from 12.5 to 25 percent of wages paid to certain employees on qualified family and medical leave (as defined in the FMLA).

Next Steps Many of the TCJA provisions take effect in 2018. Employers should consult their tax and benefits advisors to determine how the TCJA impacts them and to design a benefit plan strategy to meet their needs and goals within the confines of the new rules.

Stacey L. Stewart, JD Senior Advisor Client Resource Team Regions Insurance, Inc. stacey.stewart@regions.com www.regionsinsurance.com

The coverage you need. The guidance you trust. SM

Employee Benefits | Property & Casualty | Business Insurance When it comes to your employee benefits program and business insurance coverage, you look for trusted solutions. At Regions Insurance, we stand by our commitment to provide personal service while helping you craft a coverage plan that meets your organizationâ&#x20AC;&#x2122;s unique needs.

Tom Hayes Employee Benefits Practice Leader Tom.Hayes@regions.com 479.684.5259 www.regionsinsurance.com

The coverage you need. The guidance you trust.SM

ÂŠ 2018 Regions. Regions Insurance is an affiliate of Regions Bank. Products and services are offered by Regions Insurance Inc. and underwritten by unaffiliated insurance companies. Regions Insurance does not provide legal or investment advice.

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2016 Overtime Exemption Rules Invalidated:

NOW WHAT?

BY JANE KIM

Although the U.S. Department of Labor’s (DOL) 2016 overtime exemption rules were invalidated this year, the DOL’s next overtime exemption rules are in the works and could be issued sometime in 2018. The minimum annual salary level for the executive, administrative, professional, outside sales and computer exemptions (commonly referred to as the “white-collar exemptions”) is expected to be increased and set in the $30,000 to $35,000 range, so employers may want to get a head start on the new year by planning now for the DOL’s next overtime exemption rules.

Court Challenges to the 2016 Overtime Exemption Rules The DOL’s 2016 overtime exemption rules were supposed to be effective December 1, 2016; however, in late November 2016, a Texas federal district court issued a nationwide preliminary injunction barring the DOL from implementing and enforcing the 2016 rules. Significant changes in the 2016 overtime exemption rules included (1) an increased minimum salary level for the white-collar exemptions (from $23,660 annually to $47,476 annually, or from $455 per week to $913 per week), (2) an increased total annual compensation requirement for the highly compensated employee exemption (from $100,000 to $134,004), and (3) an automatic adjustment to these salary levels every three years. The DOL appealed the injunction ruling to the Fifth Circuit Court of Appeals in December 2016. Despite some speculation as to whether the DOL would continue to pursue its appeal after the presidential administration change, the DOL asked the Fifth Circuit in late June 2017 to confirm the DOL’s authority to set a minimum salary level for the white-collar exemptions but expressly abandoned its defense of the actual salary level set in the 2016 rules. The DOL informed the Fifth Circuit that it would initiate further rulemaking to determine the appropriate minimum salary level. 28

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In late August 2017, while the DOL’s appeal of the injunction ruling was pending, the 2016 overtime exemption rules were struck down as invalid by the same Texas federal district court that issued the nationwide injunction. The DOL dismissed its appeal of the injunction ruling the following week. The DOL has appealed the Texas federal district court’s order invalidating the 2016 overtime exemption rules, but the appeal was placed on “hold” indefinitely in early November 2017 while the DOL continues its rulemaking process to determine the appropriate minimum salary level for the whitecollar exemptions.

DOL’s Rulemaking Process In late July 2017, the DOL published a Request for Information seeking comments from the public on how it should change the 2016 overtime exemption rules. The Request for Information sought the public’s input on, among other things, whether the minimum salary level should vary based on factors such as employer size or location, whether the salary level set in the 2016 rules effectively identified employees who may be exempt, and whether a different salary level would more appropriately identify such employees. The comment period for the Request for Information closed on September 25, 2017, and the DOL is now in the process of reviewing the 214,000+ comments received. While the DOL has not provided a specific timeline, the next steps in the rulemaking process are for the DOL to issue a proposed rule and then a final rule following a comment period. The DOL’s ultimate position may be influenced by the comments received in response to the Request for Information; however, Secretary of Labor Alexander Acosta has publicly indicated that he considers an appropriate minimum annual salary level to be somewhere around $33,000 (approximately $635 per week), which is in line with the recommendation by the Society for Human Resource Management (SHRM) to increase the salary level to nearly $32,000. "SHRM welcomes DOL's re-examination of the overtime rule," said Nancy Hammer, SHRM senior government affairs policy counsel. "We believe an increase in the

threshold is long overdue and are encouraged that our members' input can help DOL arrive at a more workable threshold." SHRM also encouraged the DOL to rely on similar methodology used in 2004 – the last time the DOL updated the exempt salary level. At that time, the DOL set the minimum salary level at $23,660 based on the 20th percentile of salaried employees in the lowest wage region (the South).

The DOL recovered more than $1.2 billion in back wages for workers from 2012 to 2016, and wage and hour lawsuit

Now What? With the DOL working through its rulemaking process, an increased minimum salary level for the white-collar exemptions is on the horizon. For those employers that made classification or pay changes in anticipation of the 2016 overtime exemption rules, maintaining those changes is probably the best way to proceed when considering employee morale, administrative resources/ efficiency factors, and the fact that rollbacks of already-implemented classification or pay changes could lead to discrimination claims (especially if the rollbacks are applied inconsistently). Employers that did not change their practices in connection with the 2016 overtime exemption rules, or that rolled back already-implemented changes after the rules were put on hold, will likely benefit from starting (or restarting) their planning for the DOL’s next overtime exemption rules sooner rather than later.

filings have increased by over 450% in the past 15 years.

The DOL recovered more than $1.2 billion in back wages for workers from 2012 to 2016, and wage and hour lawsuit filings have increased by over 450% in the past 15 years. Notably, 2016 had the second-highest number of wage and hour lawsuits ever filed, and there was a 50% increase in the value of the top 10 settlements in 2016 from the previous year—i.e., $695.5 million vs. $463.6 million.

Don’t Drop Your Guard Despite the fact that the DOL is in the midst of transition when it comes to exemption rules, wage and hour claims and investigations remain at an all-time high. Because many Fair Labor Standards Act (FLSA) violations arise from problematic existing payroll practices, employers are an easy and increasingly common target for wage and hour investigations and litigation.

Jane Kim, Partner Wright Lindsey Jennings JKim@wlj.com www.WLJ.com

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New Year, New Plan...New Advisor? Tips for shopping, interviewing and hiring a new retirement plan advisor. By JEANNE J. FISHER

Now that your team has successfully completed open enrollment season, you may have time to take a more proactive approach to improving your benefits. Renegotiating fees and services with your current provider, hiring an advisor, or

Find the Right Advisor - First I've stumbled into situations where the plan sponsor changed the platform (i.g. Fidelity, Transamerica, John Hancock, T.Rowe) before hiring an advisor. Advisors who specialize in 401(k)s have invaluable experience with numerous platforms and can provide insight on who may be the best fit for your company. Furthermore, issuing and leading the RFP is almost always included in the advisory fee. The world of plan design, platforms and fees is complicated, but an advisor can help simplify the process, potentially saving you time and money.

implementing a financial wellness program are all ways you can add value to your company – and more importantly - your employees.

Hiring an Advisor Does Not Mean Changing Recordkeepers

In 2017, a record 38% of plan sponsors are “actively looking to switch their plan

At my firm, ARGI, much of our new business last year came from plans that either didn't have an advisor or wanted to make a change. Truly independent advisors can, and will, work with many different platforms. Adding the services of an advisor to your plan doesn't necessitate a full conversion.

advisors," according to Fidelity's Plan Sponsor Attitudes survey. Another survey conducted by OneAmerica found that 69% of plan sponsors listed "providing participant education" as their number one priority. Hiring an advisor and making changes to your retirement plan may seem daunting, but it's often well worth the investment in the end. Here are some quick tips to get you started.

…38% of plan sponsors are “actively looking to switch their plan advisors,” 30

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Issue an Advisor RFP

Find a Specialist

Many of us know it is not considered a “best practice” to hire based on existing relationships alone. As a fiduciary, you must interview and compare the services and fees of many firms. The real tip here is to grant each advisor at least one hour of your time, before they respond to the RFP. Every client is different, with different goals and different concerns. Asking an advisory team to respond to an RFP cold, without any real introduction to you and your company, could be counterproductive. You'll receive much more meaningful responses and more accurate pricing if you allow advisors a brief conversation beforehand.

With the changing industry and regulatory environment, you must find an advisor team that specializes in 401(k)s. Don't assume that a specialist automatically translates to 'more expensive'. Advisory teams with knowledge, additional services and thought-out processes could provide superior services at competitive prices. Also, most specialists have multiple clients on a single platform and may have more 'pull' when it comes to negotiating fees and solving service issues.

Understand Value vs. Cost Prior to interviewing advisors, sit down with your team and prioritize your goals. Undoubtedly, an advisor's fee is important. But if your top three priorities are 1) Participant Education, 2) Excellent Service, and 3) An Experienced Team, you have to be able to differentiate between advisory service models. At ARGI, our fees will vary if we are providing only Plan Sponsor Services versus a full suite of Plan Sponsor and Participant Education Programs.

Now is the perfect time to reevaluate your retirement plan and the advisory support you need. Investing your time now could create a successful 2018 for you and your employees. Happy shopping!

Ask About Indirect Compensation We support, and the industry is trending, toward advisor fees only being paid directly. That said, it is still a common practice for advisors to receive third-party compensation from the platforms and mutual funds. Be very clear in the interview process about all revenue the advisory team will receive and who is paying.

Jeanne J. Fisher, CFP, CPFA, MBA ARGI JeanneFisher@argi.net www.argi.net

We’re not salespeople. We’re educators. Are you conﬁdent your company’s 401(k) plan has the following? Compliant Plan Design & Operation Eﬃcient Investment Options Competitive Fees for Service Access to Financial Education Prudent Decision-Making Process

We want to help you check every box. Schedule a plan review by contacting Respective services provided by ARGI Investment Services, LLC, a Registered Investment Adviser, ARGI CPAs & Advisors, PLLC, ARGI Business Services, LLC, and Advisor Insurance Solutions. All are aﬃliates of ARGI Financial www.HRProfessionalsMagazine.com

many inconvenient truths of leadership. And as disconcerting as this may be, he causes us to rethink about how we now fit into a world so openly connected. This needed change is aptly described in the book’s Introduction where he states, “More so than ever before, it is time for both established and aspiring business leaders to question conventional wisdom and adopt open source thinking around these five fundamental questions/challenges:

emotion and in all fairness, the author does warn us to expect this as we come to the realization that the days of “business as usual” are over. Much ground is covered about this new paradigm of open source leadership. Many questions are asked and perhaps the author puts it best where in his final thoughts he asks, “If the book has left you with more questions than answers, then my research team and I have achieved our objective.”

- What style of leadership is best for creating breakthrough success in today’s environment?

Structure and Layout

- How must leadership be redefined/reincarnated in the open source era?

OPEN SOURCE

LEADERSHIP

say that I struggled to begin my review of this month’s book would be an understatement. It is not that I did not enjoy reading it; I did. It is not because I do not have an opinion about its content; I do. Nor, is it because I disagree with what the author has to say; I do not. It is simply because this book caused me to rethink many paradigms I was comfortable with and coming to this realization is never easy. Open Source Leadership: Reinventing Management When There Is No More Business as Usual by Rajeev Peshawaria will likely shake your comfort zone just as it did for me. This excellent work is, in my opinion, a critical message for each of us. That with business being conducted today in our “global 24/7 open environment,” it is no longer business as usual and that the traditional leadership strategies that once were so effective must now be reconsidered. And, as our author puts it, “Whether we like or not, the open source era is upon us!”

What is Open Source Leadership? What exactly is open source leadership? Essentially it is visionary as well as revolutionary leadership required in a world that has become unconventional in the truest sense of the word. Peshawaria strategically opens his dialogue with a thought provoking analysis on leadership in the 21st century and through careful, descriptive analysis entices the reader to come to terms with 32

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- How can we inspire, manage, measure, and reward performance at a time when a significant section of the workforce is opting for free agency rather than traditional full-time employment? - How can we measure employee engagement and effectively address the gaps? - How can organizations innovate quickly and more often, and create a pipeline of future visionary leaders at the same time?” Our author does not pose these questions as a means of dictating change as they might imply but rather as a way of promoting and provoking thought. And does he offer solutions? Yes and no. Take for example, the accepted 80:20 rule. This paradigm, aka the Pareto Principle, posits that 80 percent of the effects come from 20 percent of the causes. Sounds familiar doesn’t it? The fact is, most of us feel a sense of comfort in this universally accepted business management principle. After all, we all witness this phenomenon daily and we are trained to act and manage accordingly. As an example, any HR professional will attest to the truth that 80 percent of their work is caused by 20 percent of their workforce. And does the author feel this will ever change? His answer is no and for the obvious reason that this mentality is forever ingrained in us. Equally perplexing is that if this principle will continue, which the author feels it will, how so and to what extent? Here, as a reputable global researcher and consultant, Peshawaria provides groundbreaking evidence to support the need to question not just the existing management and leadership culture but what might be possible when we do in this global age of 24/7 connectivity where “scarcity and abundance” coexist. I mentioned earlier that this book caused me to rethink many paradigms I was comfortable with. Readers will likely experience this same

Well researched and supported, Open Source Leadership has the comfortable look and feel of a textbook. Its six chapters are carefully broken down into three parts; Context, Open Source Personal Leadership, and Open Source Enterprise Leadership so that the concepts are easily managed. Readers will find its Foreword and Introduction just as enlightening as the book’s primary content. Its Appendix is also worthy of note. Here, the author’s research findings from approximately 16,000 senior and midlevel executives from 38 countries are visually presented. A summary of findings is presented at the end of each chapter and I found this to be immensely helpful as were each chapter’s Questions for Reflection. This book is also extremely well written. Readers will find Peshawaria’s tone friendly, informative, and enlightening but they will also find him be blunt and refreshingly honest. In my reviews I often refer to a book in terms of its content as a reference guide or field “how to” manual. In my opinion, an Open Source Leadership: Reinventing Management When There Is No More Business as Usual falls into neither and this is in no way a dissuasion. Instead, it is more of an informative textbook where readers will find it to be a thought provoking “page turner” where each concept and chapter stands on its own merit. One of those where passages are worthy of second review.

About the Author CEO of the Iclif Leadership and Governance Centre, author of Too Many Bosses, Too Few Leaders, and a contributor for Forbes. com, Rajeev Peshawaria has extensive global experience in leadership and human capital consulting.

William Carmichael, Ed.D Professor | Strayer University william.carmichael@strayer.edu www.strayer.edu

Employee Benefits Law Firm Modernizes Services & Launches Sister Training and Education Company By JENNIFER S. KIESWETTER

Top Row (L-R) MONICA FINOCCHIARO, K2 Co-Director of Sales and Customer Relations; CLARKE SHUPE-DIGGS, KLF Administrative Assistant; AMY ETHRIDGE, Principal Administrator KLF and K2; LAKETHA TOWERS, KLF Employee Benefits Specialist. Bottom Row (L-R) MELINDA WINCHESTER, K2 Co-Director of Sales and Customer Relations; JENNY KIESEWETTER, Founding Member KLF and K2; SHUNTA TIDWELL, KLF Employee Benefits Specialist; CASEY TAYLOR, K2 Administrative Assistant, not pictured.

This past January 2018, we decided to approach employee benefits/ERISA law differently. Our boutique law firm -- Kiesewetter Law Firm – has focused on retirement plans, health plans and executive compensation since the founding of the firm in 2010. That is still our focus. However, with changes in compliance, and with changes in organizations’ approach to legal services, we decided to modernize our law firm services and to create a sister company focusing on training and education in the employee benefits realm. FLIPPING LAW FIRM TRADITIONS

Law firms have long lived off of the billable hour – which leaves organizations often guessing at legal fees. Also, law firms are often perceived as reactive – coming in after the fact and solving the problem once discovered. We at Kiesewetter have decided to flip those traditions. As of January 2018, we have nixed the billable hour, and instead work exclusively off of alternative fee arrangements designed specifically for each client. This way, clients know what to budget for each project and can earmark those legal fees in their budget. Additionally, we have several proactive projects designed for clients – such as plan compliance platforms that have specific price points. Think of these as health physicals for your plan documents and operational procedures. It’s always better to catch issues when they are small rather than when they are significant and need an expensive correction program, or an agency catches them at audit. 34

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With compliance becoming more complex, staying ahead of the tide will be more important for organizations. We have listened to our clients and have responded. LAUNCHES SISTER TRAINING AND EDUCATION COMPANY

Additionally, we have formed a separately organized, sister company called K2 Employee Benefits Training, LLC, which provided on-line certificate training, webinars and tailored on-site training for human resources professionals, CFOs/CPAs, advisors, attorneys, and others involved in employee benefits. Employee benefits professionals may also earn continuing education credits in their specific certifications for attending this education and training. Training and professional development is no doubt a top contributor to attraction, retention, profitability, productivity and engagement. It also contributes to closing the on-going skills gap. With specialized and high-level skills – such as employee benefits – changing so rapidly, traditional methods of learning can no longer keep pace with training highly qualified staff and allowing organizations to maintain a competitive edge. Our on-line and mobile learning allows employees to access content and learn at a pace convenient for them. Or we can come to you – and structure on-site training to meet your organization’s needs. Education is imperative to continuing professional development and lifelong learning.

Employee benefits -- from retirement plans to health and welfare to ancillary benefits and executive compensation -- change rapidly and affect business decisions, compliance and the bottom line. We now provide a more convenient – yet thorough -- option for you. RELOCATES TO OPEN OFFICE SPACE

We have also relocated to an open office space at a 2,700-square-foot, ground floor space at 999 S. Shady Grove Road, which is part of Boyle Investment Co.’s Ridgeway Center. By doing so, we have ditched the traditional law firm space of larger offices for partners and smaller offices for everyone else. In fact, we have no offices at all. We have open work spaces that are equally-sized for everyone employed, with conference rooms, and a work area in the kitchen so that people can work throughout the office on their desktops, laptops or phones. This new space houses both Kiesewetter Law Firm and K2 Employee Benefits Training. Since we are cloud-based and digital, we don’t need much space for servers or paper storage. We wanted to focus on creating an enjoyable, flexible, collaborative work space for our employees. If our employees are happy, then our clients will be happy.

Jennifer S. Kiesewetter, Esq.

Managing Member of Kiesewetter Law Firm, LLC & K2 Employee Benefits Training, LLC 999 Shady Grove Road S., Suite 105 Memphis, TN 38120 www.kiesewetterfirm.com www.k2employeebenefitstraining.com

PRESENTING SPONSOR

What is the EEOC Trying to Accomplish With its ADA Lawsuits Against Macy’s and Whole Foods Market? By DALE CONDER JR.

The EEOC has filed suits under the Americans with Disabilities Act against Macy’s and Whole Foods Market. The lawsuits raise the argument that allowing intermittent leave is a reasonable accommodation under the ADA.

Background on the Macy’s case Letishia Moore was a “long-term employee” at Macy’s store on State St. in Chicago. Moore suffers from asthma and problems with her leg that can be aggravated by her asthma. Moore was scheduled to work on Sunday, June 7, 2015. Before her shift was to begin, however, Moore suffered an asthma attack. This caused Moore to go to a local emergency room for medical treatment. Because of her medical emergency, Moore missed her scheduled shift. Once the hospital released her, she provided Macy’s with documentation of her hospitalization, and she asked Macy’s to excuse her absence. Macy’s fired Moore. Moore filed a charge with the EEOC, and the EEOC conducted an investigation. The EEOC determined that Macy’s violated the Americans with Disabilities Act by failing to make a reasonable accommodation. The EEOC believes that Macy’s should have provided the reasonable accommodation requested by Moore, i.e., excusing the absence. When Macy’s disagreed, the EEOC filed suit in federal court in the Northern District of Illinois. This background information is from the EEOC’s complaint and its news release. Doubtless, there is more to this story.

Background on the Whole Foods Market case About one month after the EEOC sued Macy’s, it sued Whole Foods Market in North Carolina. The suit against Whole Foods arises out of Whole Foods’s firing Diane Butler after she missed work because of problems related to her kidney disease. Butler began working for Whole Foods as a cashier in 2005. She has polycystic kidney disease, which leads to kidney failure. Her kidney disease led to a kidney transplant in 2009. Butler returned to work in due course. In late 2015, Butler missed work on two occasions because she was hospitalized and she needed to see her doctor. Whole Foods fired Butler because of her absences. Following Butler’s filing of a charge with the EEOC, the agency decided that Whole Foods violated the ADA when it failed to excuse Butler’s absences. 36

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Why are these cases significant? Under the Americans with Disabilities Act, discrimination includes an employer’s failure to make “reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability who is an applicant or employee, unless [the employer] can demonstrate that the accommodation would impose an undue hardship on the operation of the business . . . .” 42 U.S.C. § 12112(b)(5)(A). The significance of these cases is that the EEOC is trying to establish that “reasonable accommodation” includes allowing employees to miss work through the use of intermittent leave. This is contrary to caselaw applying the ADA. First, an employee’s absenteeism might prevent the employee from establishing that she is qualified for protection under the ADA. See Melange v. City of Center Line, 482 Fed.Appx. 81, 84 (6th Cir. 2012). Second, the courts reject the notion that the ability to miss work through the use of intermittent leave is a reasonable accommodation. Wheeler v. Jackson National Life Insurance Co., 159 F.Supp.3d 828, 854-55 (M.D.Tenn. 2016) (citing cases rejecting intermittent leave as a reasonable accommodation). These two points seem to be matters of commonsense. After all, a business would have a difficult time operating if its employees’ absenteeism is not to be considered in determining if they are qualified. Likewise, how could a business function if allowing intermittent leave is a reasonable accommodation? The EEOC filed the Macy’s case in August 2017 and the Whole Foods Market case in September 2017. The cases are obviously in the early stages. But the Macy’s case is set for mediation on January 31, 2018. We will have to keep an eye on these cases.

Dale Conder Jr., Attorney Rainey, Kizer, Bell & Reviere PLC dconder@raineykizer.com www.raineykizer.com

Artificial Intelligence The HR Game Changer

Workforce Intelligence Will Change The Way Companies Recruit, Hire and Develop Talent By DENNIS W. KOERNER

Introduction Today’s technologies that let us capture and analyze data are no less than amazing. In recent years, we have seen many applications of this new science from the advent of self-driving cars to the prediction of consumer behaviors on shopping websites. Artificial intelligence is here, and it is disrupting many business models and creating new ones. Artificial Intelligence can solve many challenges and will become the basis of competition in many fields in the very near future. Human Resources is no exception. Today’s HR managers need to understand the impact of this technology and how it will change their world. The purpose of this article is to show a few examples of how artificial intelligence (AI) might be applied to the recruiting and development efforts of your organization. The goal is to help you transform the way you look at and develop your organization using state of the art AI technology.

So now we can see the problem. Lack of data, individual bias and candidate shading of information can easily mislead the selection process.

on the job but may include attributes such as education, prior experience, behavior, motivators and general mental ability.

This is where AI, big data and advanced analytics can help. Big data and analytics guide us by providing a much larger data base with recognition of successful patterns based on historical results.

Step 3 – Once we have collected both the key performance metrics and benchmark attributes of our workforce, we can relate them using artificial intelligence methods. AI can tell us what combination of employee attributes contribute to performance and which ones detract.

How can IBM’s Watson computer beat the best player in the world? The answer is easy – pattern recognition.

The AI Success Model The AI Model process is a straight forward method used to identify key workforce patterns or insights that can be implemented in a number of ways. The model consists of four steps:

Finding the Right Person

1. Measure the Job

Let’s get started. As we all know, selection of a job candidate is a very complex task. The complexity of course is related to the fact that there are many variables to consider such as:

2. Benchmark Current Employees

• What is the job function?

• Can I build a future around this person?

Step 1 – The first step in using AI is to understand what success looks like in your company. This is accomplished by gathering data on key performance metrics related to the specific job. Each company will have its own performance metrics uniquely related to its workforce performance. All performance metrics are to be objective, numeric values.

To answer these types of questions the interviewer must assemble a wide range of considerations using their own biases and experience. Each person will wear a pair of glasses that lets them see the candidate from their unique perspective.

Step 2 – Step two gives a combination of tests and or assessments to a sample of the workforce population. A combination of tests has been shown in the literature to be the most effective method for prediction of job performance. Subject areas covered vary depending

• Will the candidate fit into our company’s culture? • What will motivate them to stay with the company?

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3. Create the AI Model 4. Verify the Fit

Step 4 – Models are generally developed using out of sample data to get a true measure of their performance. Because models are based on real data it is very easy to validate them. Best of all, AI models learn over time. The more you use the model and the bigger your data set becomes the more your model will improve.

The Results Results of AI models are remarkable to say the least. In the example below, a model was developed and used to predict the annual sales revenue for call center employees. Results of the AI study identified that three key attributes that were important for success: 1. Goal Orientation – the more successful employees were action oriented. They like setting and achieving goals.

2. System Knowledge – to be successful the call center employees had to understand the complexities of the product line, inventory management, transportation and customer needs.

It is clear that use of AI models is highly effective in generating predictive workforce insights.

3. Creative Problem Solving – Call center workers deal with problems all day long. Their ability to creatively address and resolve daily challenges is critical to their sales success.

Conclusion

Below is a simple line plot showing the AI predicted rate of sales change for the call center employee and the actual rate of sales change.

AI is here and being used today. Over time HR executives will adopt and use the technology to improve their organization results. Subsequently, the power of data driven workforce insights will more directly drive a company’s financial performance than ever before.

Key Elements of the AI Model

The Perfect Match – So why is AI important? At the heart of AI is better informed decisions and better results. AI is great at data analysis but is confined to the limits of its model. People are great at reading the nuances of other people. Put the two together and you have a

more powerful method of operating. AI is the perfect partner for helping your organization make more informed and thus better decisions.

About the Author – Dennis W. Koerner, Ph.D. is President and CEO of ITN, LLC. ITN provides statistical services that helps companies create competitive advantages through better hiring and retention program practices. This is accomplished with the use of artificial intelligence programs that relate employee attribute data to organization performance metrics. For more information, call Dr. Koerner at 901-568-3569 or send an email to dennis.koerner@itnanalytics.com. You can also learn more about ITN data services at www.itnanalytics.com and ITN applicant tracking software at www.itnhire.com.

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No-Fault Attendance Policies:

Faulty or Faultless? By JENNIFER SIMS

A new year, but a not-so-new concept. Implementation of “no fault” attendance policies has been a hot trend during the last decade. But what have courts and the Equal Employment Opportunity Commission (“EEOC”) since said about such policies? Are they legal? Enforceable? What do employers need to know about them? Let’s take a look. No-fault attendance policies provide employees with a certain amount of leave and often mandate termination after the leave is depleted. Usually, under such policies, employees accumulate points for every absence, and once they reach a specified number of points, they are subject to discipline as set out in the policy. The advantages of these policies are undisputed. They are relatively easy to administer and theoretically reduce or eliminate the possibility of discrimination by treating all absences the same. They may also deter employee absences. Employees find no-fault attendance policies favorable because they are easier to follow. However, these policies are not without fault.

Strict adherence to a no-fault attendance policy may deny a qualified, disabled employee leave to which he is entitled under the ADA. Consider this: Jane Doe works at Fictitious Grocery, an employer covered by the ADA. Fictitious has a no-fault attendance policy by which employees are assessed one point for each day they miss a scheduled shift, regardless of the reason for the absence. Once an employee reaches three points within a twelvemonth period, she is automatically terminated. Jane, who is disabled under the ADA, misses two scheduled shifts because her car breaks down and she has no means of alternative transportation. Three months later, Jane misses a shift due to her disability. Rather than reach out to Jane, Fictitious terminates her automatically. In doing so, Fictitious has violated the ADA by failing to engage in the interactive process to determine whether a reasonable accommodation is available for Jane. No fault-attendance policies may also implicate the Family and Medical Leave Act (“FMLA”), which generally guarantees employees with twelve weeks of leave to attend to their own or their family members’ serious health conditions. After taking such leave, an employee is entitled to return to an equivalent position with equivalent benefits, pay, and other conditions. The FMLA prohibits an employer from interfering with an employee’s FMLA rights and from retaliating against the employee for taking leave. Because employees are protected against retaliation for exercising FMLA rights, employers cannot rely on an employee’s FMLA leave in disciplining that employee pursuant to a no-fault attendance policy. Thus, using the example above, if Jane missed her third shift because she needed to tend to her child’s serious health condition and Fictitious terminated her as a result, Fictitious would likely be in violation of the FMLA.

Employers Should Undertake Steps to Ensure Their No-Fault Attendance Policies are Legally Compliant.

No-Fault Attendance Policies May Implicate the ADA and FMLA. The Americans with Disabilities Act (“ADA”) prohibits employers from discriminating against an employee on the basis of an actual or perceived disability. It is also unlawful for an employer to retaliate against a disabled employee for asserting his rights under the ADA. Where an employee is disabled, employers are required to make changes in the workplace to ensure disabled individuals are provided with an equal employment opportunity, unless such a change is an “undue hardship.” These modifications are customarily and statutorily referred to as “reasonable accommodations.” 40

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While no-fault attendance policies are not illegal per se, case law and EEOC guidance make it clear that employers must ensure that their policies are not in violation of the ADA, FMLA, or other state law. To that end, it may be prudent for employers with no-fault attendance policies to remove any mandatory disciplinary provisions, including those requiring termination. Employers are also encouraged to thoroughly review the absences being counted under the no-fault attendance policy to ensure that none of them should have been excluded under the

FMLA. That review can be particularly problematic where the person tracking the absences is not familiar with the FMLA or where an employee does not expressly invoke the FMLA. In the latter instance, if the employer has enough information to suggest that the leave may be covered by the FMLA, it must follow up with the employee to determine whether the leave qualifies as FMLA-protected leave. Further, at the first suggestion that leave may be protected under the ADA, employers should consider engaging in an individualized and interactive process during which they identify the precise limitations resulting from an employee’s disability and consider modifying the policy to allow for additional leave until the employee is able to return to work. “If an employee with a disability needs additional unpaid leave as a reasonable accommodation, the employer must modify its ‘no-fault’ leave policy to provide the employee with the additional leave, unless it can show that: (1) there is another effective accommodation that would enable the person to perform the essential functions of his/her position, or (2) granting additional leave would cause an undue hardship.” EEOC Enforcement Guidance on Reasonable Accommodation and Undue Hardship Under the Americans with Disabilities Act, E.E.O.C. Guidance No. 915.002 (Oct. 17, 2002). According to the EEOC, “[m]odifying workplace policies, including leave policies, is a form of reasonable accommodation.” In 2016, the EEOC provided additional guidance for employer-provided leave. Therein, the EEOC made the following recommendations:

• Employers who use form letters to communicate with employees on leave should review those letters to ensure that they notify employees that, if they need additional unpaid leave as a reasonable accommodation for a disability, they should ask for it as soon as possible. • Employers who rely on third-party providers to handle leave should ensure that the provider’s form letters comply with the ADA. • Employers who handle requests under their regular leave policy separately from requests for leave as a reasonable accommodation should ensure that those responsible communicate with one another to avoid mishandling a request for accommodation. Employer-Provided Leave and the Americans with Disabilities Act, E.E.O.C. Publication (May 9, 2016).

Big Brother is Watching! By initiating multiple investigations regarding, and filing lawsuits targeting, such policies, the EEOC has established itself as the proverbial “big brother.” In its investigations of employers with no-fault attendance policies, the EEOC often requests information and documents regarding other employees with disabilities or serious health conditions who have been adversely affected by the company’s policy. In one recent case, the employer objected to the EEOC’s attempt to obtain records related to all employees affected by a no-fault policy where the request was not limited to employees with a disability or medical condition. Equal Employment Opportunity Commission v. Austal USA, LLC, 2017 WL 4563078 (S.D. Ala. Aug. 18, 2017). Fortunate for the employer, in August of 2017, the Court quashed the EEOC’s subpoena, finding that the extraneous information was irrelevant. It is evident that the EEOC is interested in pursuing multi-plaintiff claims, which are obviously more costly and detrimental to employers. Perhaps most notable is the EEOC’s nationwide class action disability discrimination lawsuit that it filed against telecommunications giant Verizon Communications. In that suit, the EEOC claimed that the company unlawfully denied reasonable accommodations to hundreds of employees and disciplined

and/or fired them pursuant to Verizon’s “no fault” attendance plans. Under the challenged attendance plans, if an employee accumulated a designated number of absences, Verizon placed the employee on a disciplinary step which could ultimately result in more serious disciplinary consequences, including termination. The EEOC and Verizon ultimately settled the lawsuit in 2011 at the hefty cost of $20,000,000, which was the largest disability discrimination settlement in a single lawsuit in EEOC history. In recent years, the EEOC also challenged Pactiv, LLC’s leave policy. During its investigation of Pactiv, the EEOC found reasonable cause to believe that Pactiv discriminated against individuals with disabilities by disciplining and discharging them according to its no-fault attendance policy and by not allowing leave or an extension of leave as a reasonable accommodation. For a price of $1,700,000, Pactiv agreed to conciliate the matter with EEOC and a class of individuals, including the individual who filed a charge, rather than pursue the matter through litigation. In another instance, a defendant was unsuccessful in limiting the EEOC’s claims to just those stores involved in the EEOC’s investigation. Equal Employment Opportunity Commission v. AutoZone, Inc. and AutoZoners, LLC, 141 F. Supp. 3d 912 (N.D. Ill. 2015). After three employees, who worked at three different AutoZone stores, filed separate charges with the EEOC alleging disability discrimination, the EEOC issued a cause-finding and filed suit against AutoZone, arguing that, by not making exception to its no-fault attendance policy, it violated the ADA. Thereafter, AutoZone moved to limit the scope of the lawsuit to the three stores where the charging parties were employed on the basis that the EEOC had not conducted a nationwide investigation of AutoZone’s employment practices. The Court denied that request, effectively finding that any discovery did not have to be limited to the three stores at issue from the administrative phase. In this new year, resolve to avoid being the next subject of an EEOC investigation or lawsuit. Review any no-fault attendance policies. Remove mandatory consequences. Implement exceptions. Provide reasonable accommodations. Analyze leave requests. Review correspondence regarding leave. In the words of Oprah, “[c]heers to a new year and another chance for us to get it right!”

Jennifer Sims, Of Counsel The Kullman Firm Columbus Office jds@kullmanlaw.com www.kullmanlaw.com www.HRProfessionalsMagazine.com

Compensation Highlights in Education and Health Services Industries By RICHARD WORKS and ELI STOLTZFUS

rom elementary schools to universities, from outpatient health care services to hospitals and social assistance, the education and health services industries make up a large portion of employment in the United States. In this article, weâ&#x20AC;&#x2122;ll look at wages and employee benefits for workers in education and health services industries in the private industry. The benefits reviewed in this issue are: paid holidays, paid vacation, paid sick leave, medical care benefits, and retirement. The data presented are the annual rate of change in total employer compensation costs, the employer costs per hour worked and percent of total compensation for the select benefits, and the rate of access to and participation in the select benefits. These data are from March 2017 publications from the Bureau of Labor Statistics.

Employment Costs and Variations The Employment Cost Index (ECI) is a leading U.S. economic indicator used by the Federal Reserve Board for making fiscal policy decisions, and by private industry organizations for compensation escalation. It measures quarterly percent changes in total compensation costs, as well as the cost changes for the various components of total compensation. The data shown in Chart 1 indicates that the change in total compensation from March 2001 to March 2017 for education and health services industries was a 57.14 percent decline from 4.9%, and a 45.24 percent decline for all private industry workers from 4.2%. In March 2017, however, total compensation costs increased at an annual rate of 2.1 percent for education and health services industries, and the annual rate increased 2.3 percent for all private industry workers. Superimposing private industry on education and health services shows that education and health services may follow a lag, suggesting that changes in compensation costs might move slower in the education and health services industries when compared against the private industry as a whole.

The employer costs for employee compensation (ECEC) data estimates show the employer costs per hour worked for the various components of compensation, as well as the percent of total compensation that each component makes up. There is a significant difference between the hourly wages and salaries costs between the private industry and the education and health services industries. Although there is no significant difference in the overall hourly benefits costs between the private industry and the education and health services, differences between the benefits do exists. In March 2017, private industry averaged $2.30 per hour worked for paid leave compared to $2.74 for education and health services. This is also seen in insurance: the education and health services industries had a higher costs for insurance when compared to the private industry as a whole. However, there was no significant difference for retirement costs between the private industry and the education and health services industries (see Table 1).

Table 1. Employer costs per employee hour worked and percent of total compensation for paid leave, insurance, and retirement and savings benefits, private industry, March 2017 Industry group

Total compensation cost

Wages and salaries cost

All private industry workers $33.11 $23.06 Education and health services $35.00 $24.59 industries Education services $44.31 $32.05 Health care and social $33.46 $23.35 assistance Source: U.S. Bureau of Labor Statistics, National Compensation Survey.

$10.06

Retirement and savings Cost Percent Cost Percent Cost Percent $2.30 6.9% $2.65 8.0% $1.34 4.0%

$10.42

$2.74

7.8%

$3.03

8.6%

$12.26

$3.17

7.2%

$3.64

$10.11

$2.67

8.0%

$2.93

Benefits cost

â&#x20AC;Śthe change in total compensation from March 2001 to March 2017 for education and health services industries was a 57.14 percent decline from 4.9%, and a 45.24 percent decline for all private industry workers from 4.2%. 42

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Paid leave

Insurance

$1.47

4.2%

8.2%

$2.11

4.8%

8.7%

$1.36

4.1%

A comparison between the sectors shows that the education services sector had a higher hourly costs when compared to the health care and social assistance sector. In March 2017, the education service sector averaged $44.31 per hour worked compared to $33.46 for the health care and social assistance sector. This significant Table 2. Employer costs per employee hour worked and percent of total compensation for paid leave, insurance, and retirement and savings benefits, private industry, March 2017 difference in cost is due to 37 percent higher wages and Retirement and Total compensation Wages and Benefits Paid leave Insurance salaries, and 21 percent higher benefits costs. Wages savings Industry group cost salaries cost cost Cost Percent Cost Percent Cost Percent and salaries averaged $32.05 in the education services All full-time workers 38.96 26.5 12.46 2.96 7.6% 3.38 8.7% 1.69 4.3% sector compared to $23.35 in the health care and social All part-time workers $17.23 $13.69 $3.54 $0.50 2.9% $0.68 3.9% $0.37 2.1% Education and health assistance sector. Benefit costs averaged $12.26 in the services industries, fulleducation services sector compared to $10.11 in the time $37.80 $25.87 $11.93 $3.22 8.5% $3.66 9.7% $1.73 4.6% Education and health health care and social assistance sector. Retirement and services industries, partsavings, and insurance costs were also higher in the time $27.36 $21.08 $6.28 $1.43 5.2% $1.29 4.7% $0.74 2.7% Source: U.S. Bureau of Labor Statistics, National Compensation Survey. education services sector (see Table 1). In March 2017, hourly costs were significantly higher Table 3. Percent of workers with access to and participation in paid leave, medical care benefits, and retirement, private industry, March 2017 for full-time workers when compared to part-time Paid Paid Paid workers. The total hourly compensation cost was sick Medical care benefits Retirement holidays vacations Industry group leave $38.96 for full-time workers compared to $17.23 Access Access Participation Access Participation for part-time workers. Likewise, costs for full-time All private industry workers 77 76 68 67 49 66 50 Education and health services workers in the education and health services industries 82 79 80 73 51 72 57 industries were higher than part-time workers in the same indusEducation services 65 56 79 75 56 72 64 Health care and social tries. Data show that the hourly total compensation 85 83 80 73 50 72 56 assistance costs for full-time workers in the education and health Note: Workers that have access to paid leave benefits are considered to be participating in those benefits. services industries was $37.80 compared to $27.36 Source: U.S. Bureau of Labor Statistics, National Compensation Survey for part-time workers. The differences between the benefits as well as the wages and salaries also showed to vary significantly between the groups (all full-time and part-time, and full-time and part-time within the industry sectors). The published estimates show that insurance made up a larger portion of total compensation, followed by paid leave, then retirement and savings (see Table 2).

Benefit Access and Participation Employee Benefits in the United States is an annual publication that provides information on the percent of workers with access to and participation in employer-provided employee benefits. In March 2017, the education and health services industries had a higher rate of access for all paid leave benefits when compared to the private industry as a whole. Among the sectors, the data show that health care and social assistance had a higher rate of access for paid holidays and paid vacations when compared to education services (see Table 3). Similarly, the education and health services industries had higher rates of access and participation for medical care and retirement benefits when compared to the private industry. However, only the participation rates had significant differences between the sectors. Higher rates of participation was seen in the education services sector (56% compared to 50% for medical and 64% compared to 56% for retirement). The differences among the sectors for access rate varied, but were not statistically significant.

Dr. Richard Works, Economist Bureau of Labor Statistics, Washington, DC works.richard@bls.gov www.bls.gov

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Eli Stoltzfus, Economist Bureau of Labor Statistics, Washington, DC stoltzfus.eli@bls.gov www.HRProfessionalsMagazine.com

Wage & Hour Law Update for Restaurant Operators

FOUR TRENDS TO WATCH OUT FOR IN 2018 By KATHRYN S. MCCONNELL and ANGELO SPINOLA

The restaurant industry continues to be a major target for wage/hour collective and class action litigation. This article addresses four of the wage/hour trends to watch out for in 2018 that could impact your Company’s bottom line. We also provide some tips to help minimize wage/hour exposure.

MINIMUM WAGE RAISES: The restaurant industry is particularly impacted by minimum wage raises. Margins are tight and restaurants are the most intensive utilizer of minimum wage labor, so a hike in minimum wage impacts a large proportion of the restaurant’s workforce, and can lead to a sharp increase in overhead for restaurants. More states (and some cities and towns) are now mandating higher rates than the $7.25 federal minimum wage or they are increasing their state minimum wage rates that are already higher than the federal rate. Evidencing this trend, 18 states began 2018 with higher minimum wages. Arkansas, effective January 1, 2017, increased the state minimum hourly wage from $8.00 to $8.50 as part of a ballot initiative passed in 2014. The state minimum wage does not apply to employers for any work week in which fewer than four employees are employed. Florida increased its minimum wage from $8.10 to $8.25 effective January 1, 2018. Although states like Alabama, Georgia, Kentucky, Mississippi and Tennessee did not follow suit, significant pressure on states and individual companies to raise the wage rate of those workers making minimum wage will continue. If states and large chains bow to the pressure and raise the wages of their workers, this could draw workers away from smaller restaurants that are unable to implement an increase or away from states that continue to utilize the federal minimum wage to neighboring states that have increased the wage rate. Presently, the minimum wage in Alabama, Kentucky Mississippi and Tennessee is $7.25; in Georgia it is $5.15 for those not covered under the Fair Labor Standards Act (“FLSA”) and $7.25 for those covered. Note that employees whose compensation consists wholly or partially of gratuities are not covered by Georgia’s minimum wage provisions. Presently, Alabama, Mississippi, and Tennessee do not have a state minimum wage. However, note that in Kentucky, Tennessee, Georgia, and Alabama bills were introduced in the House and Senate last year aimed at increasing the minimum wage – it is likely that those bills will be reconsidered and/or reintroduced in 2018. Federally, in his campaign, President Trump signaled that he would like to see a raise in the federal minimum wage to $10 per hour. However, it looks more likely now that he will leave it to the individual states to address the issue. 44

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TIP CREDIT UPHEAVAL? In most jurisdictions, employers are permitted to count tips certain employees receive toward the minimum wage. In these jurisdictions, if the direct wage an employer pays an employee plus tips equals the minimum wage, an employer’s minimum wage obligation has been met. If the direct wage plus tips does not equal the minimum wage, an employer must pay the employee the difference. A number of states (California, Minnesota, Montana, Nevada, Oregon, Washington, and Alaska), do not allow an employer to apply tip credit. In 2017, in what commentators fear may be a sign of a trend, New York signaled that it would move towards eliminating employers’ ability to utilize tip credit. However, note also in 2017, Maine went the other direction and passed a bill to restore tip credit. Presently, in Alabama, Georgia, Kentucky, Mississippi and Tennessee, tip credit is allowed (or not expressly prohibited) and the maximum tip credit the employer can claim is $5.12. In Arkansas, the maximum tip credit allowed is $5.87. TIP POOLING REVERSAL: The U.S. Department of Labor’s (“DOL”) 2011 rule that tip-pooling requirements apply to all employees receiving tips, even if the employer paid an employee at or above minimum wage, and did not take a tip credit against the minimum wage paid to employees, was particularly harmful to the restaurant industry. The rule effectively barred restaurants from requiring customarily tipped employees, like servers, from sharing their tips with back-of-house employees (although there emerged a split between the Ninth and Tenth Circuit courts on whether the rule was even valid). This necessarily impacted the amount of wages that the non-tipped employees received, forcing employers to either increase those employees’ wages (often passing that cost through to customers) or to implement novel ways of bridging the shortfall, e.g., by implementing service fees or allowing the customer specifically to leave a tip for back-of-house staff. In December 2017, the DOL issued a proposed rule to rescind its 2011 rule, which would pave the way for employers that pay employees at least the full federal minimum wage to require employees to share tips with employees who are not otherwise customarily tipped. Note that this rescission would not affect employers that apply a tip credit towards employees’ wages. Commenters have until February 5, 2018 to weigh in on the proposed rule.

It is also important to consider state law on this subject. For example, at a state level, mandatory tip pooling is not expressly prohibited in Arkansas, is expressly prohibited in Kentucky (voluntary tip pooling is allowed), and is not addressed in Alabama, Georgia, Mississippi, and Tennessee. Employers in states that follow the FLSA should consider the pros and cons of paying front-of-house staff full minimum wage and eliminating the use of tip credit. In particular, employers should assess the burden of the payroll cost increase from raising front-of-house staff wages to the full federal minimum wage rate against lowering backof-house and other non-regularly tipped employees’ wage rates and offsetting that reduction by allowing those employees to participate in a tip pool. SALARY THRESHOLD DEBACLE: As a threshold matter, for an employee to be exempt from overtime under the FLSA as an executive, administrative or professional employee, the employee must meet the applicable duties tests and other prerequisites, including the minimum salary requirement of at least $23,660 annually ($455/week). Administratively and professionally exempt employees may alternatively be paid on a “fee basis” which is beyond the scope of this article. In 2016, the DOL attempted to enact a final rule that effectively would have doubled the annual salary threshold to $47,476. The rule, if implemented, would have had a significant impact on the restaurant industry, which already operates on particularly thin margins despite generally paying restaurant managers below the proposed $49,476 threshold. The rule was scheduled to take effect on December 1, 2016, but was ultimately blocked following a legal challenge resulting in an injunction, and ultimately the invalidation, of the rule. Some believed that, in light of the current administrations’ unfavorable view of regulations that place additional burdens on companies, the DOL would not continue to pursue salary increases. However, the DOL is signaling that it still intends to increase the salary threshold. The deadline for public comment closed on September 25, 2017 and the comments submitted evidenced disagreement as to what the salary threshold amount should be. Subsequently, Alexander Acosta, Secretary of the DOL, in testimony before the House Education and the Workforce Committee suggested he supported increasing the minimum salary level, but he did not indicate what that dollar amount should be. It is unclear when the DOL will make its intentions known as to this issue, but there appears to be a fair chance based on DOL indications that the minimum salary threshold may increase to a range somewhere around $30,000 to $35,000. Additionally, the Restoring Overtime Pay Act of 2017 was introduced in Congress on November 30, 2017 seeking to amend the FLSA to codify parts of the salary rule that were enjoined by the Texas federal court. Although it is unlikely to be passed by the House or Senate, it is one to watch given (THAT) the makeup of Congress could change after the midterm elections.

KEY TAKEAWAYS:

HOW TO AVOID COSTLY MISTAKES Classification Audit. Audits of job duties by counsel can assist with properly determining worker classifications and may provide a good-faith defense to limit damages available under the FLSA in the event of litigation. Collective and class action litigation surrounding the exempt status of assistant manager positions continues to increase. Protective policies. Restaurant employers should define in policy what constitutes working time, establish expectations surrounding work time, require that non-exempt workers record all work time, and inform workers they may be subject to discipline if they fail to follow these policies. Also consider having a legal review of timekeeping and payroll policies, procedures, and recordkeeping for wage and hour compliance. The most common wage/hour claim for non-exempt restaurant staff is the allegation that they have worked off the clock and, therefore, are owed additional overtime wages. Employee certification of time records. Have workers review their time records, certify the records are complete and accurate, and certify they have been paid for all time worked, including any time worked before or after their shifts or during meal periods. This practice helps prevent staff from underreporting hours with the goal of being scheduled to work weekends for bigger tips. Ensure Company’s tip credit practice is lawful. Tip credit cases have recently led to big settlements and verdicts. If your company intends to use tip credit, provide employees with a written notice that satisfies applicable law and mandate that only appropriate restaurant staff are permitted to use the tip credit or participate in a tip pool. Counsel also can audit and provide advice on lawful tip credit practices in your jurisdiction, which can help you avoid costly mistakes. Robust complaint mechanism. A well-publicized, robust complaint mechanism and process for conducting investigations with appropriate remedial action may help in defending wage/hour litigation. If workers are required to report issues to a compliance hotline or a compliance officer who logs all complaints, the absence of complaints can be evidence of compliance. When complaints arise, written confirmation from workers that their issues have been resolved to their satisfaction also provides evidence to bolster the company’s good-faith defenses and establishes its commitment to compliance. Training and Discipline. Training managers and workers both in-person and online on legally compliant timekeeping and payroll procedures—and documenting that training—can be critical to defending litigation. To reinforce the training, companies should discipline workers and managers who do not follow procedure. A record of disciplinary actions for failure to adhere to legally compliant policies is excellent evidence that a company takes its policies and compliance obligations seriously.

Kathryn S. McConnell, Shareholder Littler Atlanta Office kmcconnell@littler.com www.littler.com

Angelo Spinola, Shareholder Littler Atlanta Office aspinola@littler.com www.littler.com www.HRProfessionalsMagazine.com

Employers Beware: Some I-9 Practices May Constitute Unfair Documentary Practices By BRUCE E. BUCHANAN

In the book, The I-9 and E-Verify Handbook, which I co-authored with Greg Siskind, we discuss unfair documentary practices. This article is excerpted from Chapter 7 of the book. What are the Immigration Reform and Control Act’s anti-discrimination and unfair documentary practices (document abuse) rules? Although employers need to be diligent about complying with the employment verification rules of the Immigration Reform and Control Act (IRCA), they should not be so overzealous that they end up penalizing qualified employees. IRCA has anti-discrimination rules that can result in an employer facing stiff sanctions. Employers of more than three employees are covered by IRCA anti-discrimination rules (as opposed to the 15 or more employees required by Title VII of the Civil Rights Act). IRCA protects most U.S. citizens, permanent residents, temporary residents, asylees, and refugees from discrimination on the basis of national origin or citizenship status if the person is authorized to work. Aliens illegally in the United States are not protected. Under IRCA, employers may not refuse to hire someone because of his or her national origin or citizenship status, and they may not discharge employees on those grounds either. The employer is also barred from requesting specific documents in completing a Form I-9 and cannot refuse to accept documents that appear genuine on their face. But note that an employer must be shown to have had the intent to discriminate. In December 2016, the Department of Justice, where the Immigrant and Employee Rights Section(IER) (formerly referred to as OSC) is located, promulgated a new regulation on the definition of “discriminate.” Under the new regulation, the word “discrimination,” in the context of Title 8 of the U.S. Code, section 1324b: Unfair Immigration-Related Employment Practices, and in the context of completing the Form I-9, means the act of: intentionally treating an individual differently from other individuals because of national origin or citizenship status, regardless of the explanation for the differential treatment, and regardless of whether such treatment is because of animus or hostility. Employers can be separately sanctioned based on laws enacted in 1990 if they request more or different documents than required by the Form I-9 rules. Employers are liable for violations under this category, if it is shown an employer intended to discriminate. What is “citizenship or immigration status” discrimination? “Citizenship or immigration status” discrimination refers to when a person or entity discriminates against any individual (other than an unauthorized immigrant) with respect to the hiring, recruitment, or referral for a fee of the individual for employment, or the firing of the individual from employment because of the individual’s citizenship or immigration status. What is unfair documentary practices, formerly called “document abuse”? Unfair documentary practices (formerly referred to as “document abuse”) refers to discriminatory practices related to the verification of employment eligibility in the Form I-9 process. Employers that treat individuals differently based on national origin or citizenship commit unfair documentary practices document abuse when they engage in one of four types of activity: 1. Improperly requesting that employees produce more documentation than is required to show identity and employment authorization. 2. Improperly asking employees to produce a particular document to show identity or employment eligibility. 3. Improperly rejecting documents that appear to be genuine and belonging to the employee. 4. Improperly treating groups of applicants differently (for example, based on looking or sounding foreign) when they complete Forms I-9. All individuals authorized to be employed can file a claim under the document abuse rules if an employer has four or more employees. 46

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What are examples of prohibited practices? The following are examples of prohibited practices when they are based on an employee’s “national origin’ or “citizenship or immigration status”: 1. Setting different employment eligibility verification standards or requiring different documents based on national origin or citizenship status. (One example would be requiring non–U.S. citizens to present DHS– issued documents, like green cards). 2. Requesting to see employment eligibility verification documents before hire and completing the Form I-9 because an employee appears foreign or the employee indicates that he or she is not a U.S. citizen. 3. Refusing to accept a document or to hire an individual because an acceptable document has a future expiration date. 4. Limiting jobs to U.S. citizens, unless a job is limited to citizens by law or regulation. 5. Asking to see a document with an employee’s “Alien” or “Admission number” when completing Section 1 of Form I-9. 6. Asking a lawful permanent resident to reverify employment eligibility because the person’s green card has expired. Can employers discriminate against employees with an expiring Employment Authorization Document? No. The existence of a future expiration date should not be considered in determining whether a person is qualified for a position, and considering a future employment authorization expiration date may be regarded as employment discrimination. In other words, employers may not refuse to hire a person only because he or she has temporary employment authorization. This does not, of course, preclude re-verification upon the expiration of employment authorization. Who is a “protected individual” under the Immigration Reform and Control Act, and can an employer discriminate against individuals not included? A “protected individual” under the anti-discrimination rules of IRCA includes anyone who is a U.S. citizen as well as individuals who fit the following categories: 1. R ecent lawful permanent residents (green-card holders) - meaning individuals who have held LPR status for no longer than six months beyond becoming eligible to naturalize. 2. Refugees. 3. C ertain beneficiaries of the 1986 legalization program (only a few of these people have not become green-card holders at this point). 4. Asylees. For more information on this subject or other immigration compliance issues, I invite you to read The I- and E-Verify Handbook, which is available at the SHRM Store at https://store.shrm.org/the-i-9-and-e-verifyhandbook-a-guide-to-employment-verification-and-compliance.html.

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

Modeling Professionalism Building the Best HR for Tomorrow

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Pardon Me, Your Credibility Is Showing By BARRY BROWN

When we consider the fact that few senior managers really understand HR, it’s not surprising to find that many decisions are made without the input or review of HR. This isn’t true across all organizations, but it’s true in many. By the way, does your senior management team involve you in strategic planning and decision-making … especially for those areas impacting HR? We can all agree that HR should be involved, but often we are simply informed of the decision after-the-fact and we then have to scramble to make it happen or handle damage control. Why is this? Yes, we know it’s because HR isn’t valued very highly in some companies, but the question remains why? There can be multiple reasons for the lack of confidence in HR, but let’s explore two specific areas within the context of work: (1) your credibility with the decision-makers; and, (2) your credibility with your peers and employees.

Credibility with Decision-Makers First, let’s take a look at what your CEO sees in you. Let’s try to get to the heart of the issue by asking some specific questions. Answers to these questions may be revealing if we think about HR from the CEO’s perspective. • Do you know the company’s key clients and their individual importance to the success of the company? • Can you read the financial reports and understand how the company is (really) doing financially? • Do you know the company’s profit margin – or can you figure it out from the financials? • Strategically, where is the company heading in the next year, two years, five years? • Do you provide monthly reports of key HR metrics, e.g., turnover percentages broken out by voluntary and involuntary, cost of turnover for various levels of positions within the company, time-to-fill and cost-to-fill positions by organization level, absentee rates, etc.? • When you seek funds for a project, equipment upgrade, or training, do you present your request in the form of a business case, e.g., issue, possible solutions, cost of possible solutions, expected benefit of preferred solution, return on investment for the preferred solution, etc.? 48

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If you cannot answer “yes” to all of the above questions, you’ve got some opportunity to improve. If you can answer yes to only one or two of the above questions, you’ve got a serious credibility issue. In short, HR professionals need to be able to speak the language of management – which is sales, profits, and metrics. Being “good with people” simply isn’t good enough to get you an invitation to those decision-making meetings. To begin building your credibility with the decision-makers, think about taking these steps: • Ask the CFO to spend a few minutes with you to explain the financials and/or the company’s annual report. Your credibility will go up a notch or two just by asking for help. Your CFO can be your best ally! Beginning to understand the numbers will help pave the way for the CFO to better understand HR, too. • Even if monthly reports are not requested, you should develop them for your own reference. I suggest a quarterly summary as well as an annual summary. We’re typically going so fast in HR, we forget how much of an impact we actually had over the course of a year. Having data at hand can be extremely valuable! • Begin converting successes in cost reduction (e.g., lower turnover, reduced cost-per-hire, etc.) in terms of revenue. For example, if you just saved $25,000 in recruiting costs and your company has a 10% profit margin, you just saved the equivalent of $250,000 in sales/ revenue! And, nearly all savings in HR go directly to the bottom line! • Get comfortable with calculating percentages. Let’s say a new communications program has reduced absenteeism from 5% to 4%. That is a one percentage point difference, but it is actually a 20% reduction! Learn to present your savings and positive impact in the best terms – think of it as marketing yourself and your impact to the bottom line! • Make sure your presentations are of the same quality as others the CEO will see. If you’re not expert with graphs, charts, and fonts, talk with someone in marketing. They can help turn your so-so presentation into one that gets attention! • If you were not invited to the meeting, but happen to hear about something that impacts HR, don’t hesitate to create a good report on some things to think about. For example, if you hear something about acquiring a new company, you might provide a brief report on local unemployment for types of labor needed, differences in pay rates, prevalence of unions, typical relo costs for key personnel, etc. In short, let the boss know you’re capable of more than just interviewing and handling complaints. • Make your reports concise. Think about using an executive summary with bullet points

covering the key items – followed on subsequent pages with details for each of the bulleted items. This way, the execs can read as little or as much as desired.

Credibility with Peers and Workforce Now, let’s explore your credibility with your professional peers (HR peers), management peers (in your company), and your employees (both in your department and the general workforce). We’ll again ask some basic questions: • Do you start and end meetings on time? • Do you show up for meetings prepared and on time? • Do you provide timely performance appraisals for your staff? • If you tell someone you’ll have a response on a given date/time, how likely is that to actually happen? • Can you to keep things confidential? Can you be trusted without question? • Are you technically proficient in your job? • Are you creative in solving problems? • Are you truly leading by example or just talking about leadership? Top HR professionals can answer “yes” to every one of these questions. Most of us have some opportunities here. As long as your integrity, i.e., confidentiality/trust, is intact, you’ve got a chance to make a better impression!

The Real Test Not sure if your credibility is intact? Here are two quick questions to ask yourself. • If you started a consulting practice tomorrow, would your organization hire you? • If you had an employment contract up for renewal next month, would you be worried? If either of these questions hits a little too close to home, you need to focus on developing your credibility. This is one very valuable asset that cannot be purchased – it has to be earned. It takes attention to detail, persistence, and patience. Make your credibility a priority and you’ll find yourself in more demand!

Barry Brown, SPHR, CCP President, Effective Resources, Inc. Barry@EffectiveResources.com www.effectiveresources.com

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Chris Davis was Guest Speaker at January GMEBC Meeting

Chris Davis, Manager of Health Management & Claims Informatics with Regions Insurance, was the guest speaker at the January meeting of GMEBC at the Crescent Club. His topic was â&#x20AC;&#x153;The 7 Habits of Effective Health Plans. (L-R) Christy Showalter, Senior HR Consultant with Regions Insurance; Chris Davis, Jonathon Frisch, Senior Vice President at Regions Insurance; and Preston Cox, Account Executive with Unum, and Co-Vice President Programs of GMEBC. www.HRProfessionalsMagazine.com

‡ Things You Should Never Share At Work By HARVEY DEUTSCHENDORF

Sharing personal information at the workplace is tricky, complicated and confusing. On one hand, we want to develop close relationships with our coworkers and bosses and being open to sharing ourselves with them seems like a great way of lessening the distance between them and us. If we share too little, we can be perceived as being cold, standoffish or unfriendly. On the other hand, sharing too much or the wrong kind of information can lead to mistrust, negative judgements, questioning of our discernment and alienation from the people whose relationship is so important to our working lives.

Every work environment is different and what is appropriate sharing in one, may not be in another. Part of our ability to determine what to share and not is accurately assessing our work environment. If your work environment is highly structured and work oriented, the less personal information that is shared, the better. If on the other hand people are very open and seem to enjoy sharing their personal lives, it will be more of an expectation on us to follow suite. Even in the most open environments there are definite limitations on what and how much we should share. Look at who the most respected people are at work, notice how much and what they share and follow their lead.

Here is a list of things to go under your Do Not Share Category:

Anything personal going on in your life that can be viewed as a negative Never share problems you are having with your in-laws, relationships, your own or your family’s struggle with addictions or any kind of situations that can cause others to question you or put you in a negative light. Any financial problems or past criminal activities should be kept strictly to yourself. While you may think that it is okay to sharing the negative aspects of those close to you, as you are not directly involved, your colleagues or boss may view the activities of those in your circle as a reflection of your judgement and or character.

Making negative judgements about others competence There will always be people at work who you feel are incompetent but for your own well-being it is better that you not broadcast this to your boss or colleagues. Likely these people are known to others and your mentioning this will not help the situation or put you in a good light. Others may view you with suspicion and wonder if you are saying negative things about them behind their backs. Once trust is lost, it is near to impossible to gain trust back again.

Past adventures, sexual exploits or your views on the sex lives of others Anything that you have done, in terms of your sex life, should stay in the past. A sure way to get into trouble is to mention how attractive you find a colleague or mention that you think of someone in a sexual manner. Nobody is interested in your past sex life, your wild past or any other crazy adventures you may have done when you were in college or any point in your life. You might think it will make you look cool and debonair, but your colleagues may not see it that way. It is a lot safer to let people think that you have led a boring, non-eventful life.

Letting others know that you hate your job While it may be easy to get caught up to complain about what is going on around you at work, doing so will land you with the label as a negative individual, a poor team player and will garner the attention of management. You will also be excluded from the circle of positive people who are more likely to be promoted and may end up becoming your boss in the future. If you really hate your job, keep it to yourself and start looking elsewhere.

Making offensive or tasteless jokes One of the quickest ways to turn your coworkers off is to make a radical, racial or otherwise offensive joke. Humour that you might make after you have had a few drinks with your close friends are usually out of bounds when it comes to the workplace. Think carefully before you make any jokes and if there is any possibility that someone may find it offensive, don’t say it. The safe policy is, if in doubt, leave it out. Over time, people may forget what you said, but they will never forget the way you made them feel.

Political or religious beliefs There is nothing that can push people’s buttons and induce them to be fired up as politics and religion. Many people carry their political and religious beliefs with great fervour and nothing can cause more damage and conflict than questioning or disagreeing with them. That is why you should stay as far away from these two topics as possible. If directly asked, you could politely say that it is a topic you would prefer not to talk about. Even if you do not express strong beliefs about a topic, there are people who will take offence if you do not adamantly agree with them. Even be careful about bringing up world events around which there are different sides and strongly held opinions that can cause you to be alienated and judged. If these topics do come up, the safest and most empathetic sentiment to express is your sadness over the people who have suffered pain, death or hardship as a result of these events. 50

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Harvey Deutschendorf is an emotional intelligence expert, internationally published author and speaker. To take the EI Quiz go to theotherkindofsmart.com. His book THE OTHER KIND OF SMART, Simple Ways to Boost Your Emotional Intelligence for Greater Personal Effectiveness and Success has been published in 4 languages. Harvey writes for FAST COMPANY and has a monthly column with HRPROFESSIONALS MAGAZINE. You can follow him on Twitter @theeiguy.

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