May 2015 issue

Volume 5 : Issue 5 TM

www.HRProfessionalsMagazine.com

MSSHRM

20th Annual HR Conference & Expo May 11-13 in Biloxi

Highlights from SHRM Employment And Legislative Conference March 23 - 25 in Washington DC

Nancy

Hammer, J.D. Highlights from

ARSHRM

HR Conference & Expo April 8 -10 in Hot Springs

SHRM

Health Care Reform

Survey

2015 Update

SHRM’s SR Government Affairs Policy Counsel Highlights from the TPMA Annual Conference April 14 -16 in Gatlinburg, TN

10 Tips to Fight

Gender Discrimination

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

YOU’RE REALLY SHOWING OFF YOUR BEST ASSETS TODAY.

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

I NEVER WEAR THE SAFETY GOGGLES. THEY LEAVE A MARK.

What you don’t hear can still hurt you.

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

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

ATLANTA BALTIMORE BOSTON CHARLOTTE CHICAGO CLEVELAND COLUMBIA

COLUMBUS DALLAS DENVER FORT LAUDERDALE GULFPORT HOUSTON IRVINE

KANSAS CITY LAS VEGAS LOS ANGELES LOUISVILLE MEMPHIS NEW ENGLAND NEW JERSEY

NEW ORLEANS ORLANDO PHILADELPHIA PHOENIX PORTLAND SAN ANTONIO SAN DIEGO

SAN FRANCISCO TAMPA WASHINGTON, D.C.

Bringing Human Resources & Management Expertise to You

91%

of organizations have not considered reducing employee hours for full-time employees www.HRProfessionalsMagazine.com Editor

Cynthia Y. Thompson, MBA, SPHR Publisher

The Thompson HR Firm HR Consulting and Employee Development Art Direction

Park Avenue Design Contributing Writers

Contributing Writers Sarah Auer Chris Davis Stacie Engelmann Anne Gibson Lisa Krupicka Courtney Leyes Tammy McCutchen Sarah Martin Jonathan Segal Christine Walters Allison West Board of Advisors

Austin Baker Jonathan C. Hancock Ross Harris Diane M. Heyman, SPHR John E. Megley III, PhD Terri Murphy Susan Nieman Robert Pipkin Ed Rains Michael R. Ryan, PhD Contact HR Professionals Magazine: To submit a letter to the editor, suggest an idea for an article, notify us of a special event, promotion, announcement, new product or service, or obtain information on becoming a contributor, visit our website at www.hrprofessionalsmagazine. com. We do not accept unsolicited manuscripts or articles.

All manuscripts and photos must be submitted by email to Cynthia@hrprosmagazine.com. Editorial content does not necessarily reflect the opinions of the publisher, nor can the publisher be held responsible for errors.

HR Professionals Magazine is published every month, 12 times a year by the Thompson HR Firm, LLC. Reproduction of any photographs, articles, artwork or copy prepared by the magazine or the contributors is strictly prohibited without prior written permission of the Publisher. All information is deemed to be reliable, but not guaranteed to be accurate, and subject to change without notice. HR Professionals Magazine, its contributors or advertisers within are not responsible for misinformation, misprints, omissions or typographical errors. ©2011 The Thompson HR Firm, LLC | This publication is pledged to the spirit and letter of Equal Opportunity Law. The following is general educational information only. It is not legal advice. You need to consult with legal counsel regarding all employment law matters. This information is subject to change without notice.

Features 4 note from the editor

WEB EXCLUSIVES

5 Profile: Nancy Hammer, J.D.

6 Meet the SHRM Government Affairs Team

7 Habits of Persistent People

7 SHRM Employment Law and Legislative Conference Capitol Hill Visits

BY HARVEY DEUTSCHENDORF

HTTP://HRProfessionalsMagazine.com /Exclusive

14 An Employer’s Guide to Combatting Obesity in the Workplace 18 The Rise of Specialty Drugs

Departments 10 Supreme Court Strikes Down Employer’s Light Duty Policy in Pregnancy Discrimination Case 21 SHRM Health Care Reform Survey 2015 Update 24 Ellen Pao Discrimination Case

26 10 Tips to Fight Gender Discrimination

28 Proposed Changes to FLSA Overtime Regulations

30 Three Reasons Why Investigators Should Not Discount Hearsay Evidence 32 Flexing for Work Life Integration

Industry News 8 Preview of MSSHRM 20th Annual HR Conference & Expo in Biloxi May 11-13

12 Highlights of the SHRM Employment Law & Legislative Conference March 23-25 in Washington, DC

16 Highlights of the TPMA Annual Conference April 14-16 in Gatlinburg

22 Highlights of the 2015 ARSHRM HR Conference & Expo April 8-10 in Biloxi 34 SHRM-Memphis June Social

Next Issue Profiles of Super Lawyers in Labor and Employment Law in TN, KY, AR, and MS Preview of SHRM Annual Conference in Las Vegas June 28-July 1

Highlights of the 20th Annual MSSHRM Conference & Expo in Biloxi May 11-13

Highlights of the 5th Annual WTSHRM HR & Employment Law Spring Conference in Jackson May 6 www.HRProfessionalsMagazine.com

3

a note from the Editor

In addition, we are bringing you four articles from some of the most outstanding speakers at the SHRM Employment Law & Legislative Conference. Many of you will recognize Jonathan Segal as a regular contributor to SHRM’s HR Magazine. Other contributors from the Conference include Tammy McCutchen, Allison West, and Christine Walters. We are also happy to bring you the highlights from the SHRM Health Care Reform Survey 2015 Update. You can find the entire survey online at http://www.shrm.org/Research/SurveyFindings/ Documents/SHRM-Health-Care-Reform-2015-Update.pdf Hello MSSHRM friends! We will bring you highlights of the 20th Annual

Human Resource Conference and Expo at the beautiful Beau

Rivage in Biloxi in our June issue. I am honored to be presenting a three-hour Pre-Conference Workshop approved for 3.00 HRCI Business Cynthia Thompson with SHRM CEO Hank Jackson at the National Museum of Natural History.

April was such an exciting month with the ARSHRM HR Conference & Expo in Hot Springs on April 8-10 and the Annual Tennessee Personnel Management Association Conference in Gatlinburg April 14-16! Hope you enjoy reading the highlights from these two excellent conferences. We also enjoyed Arkansas Derby Day at Oaklawn on April 11, and the races on April 18 at Keeneland in Lexington!

Credits and 3.00 SHRM PDCs. I hope you will make plans to join me for the Workshop!! The Conference will be May 11-13.

If you are unable to attend these excellent conferences, please follow me on Twitter @cythomps as I will be tweeting from the conferences about the exciting events and speakers. We will also provide daily updates on Facebook and LinkedIn. Watch your email for our next complimentary HRCI Virtual Event sponsored by Data Facts on Wednesday, April 29. The topic will be “Five Takeaways From the SHRM Employment Law & Legislative Conference.” If you are not currently receiving

our monthly email invitation, you can subscribe on our website at As promised, we are also featuring highlights from the SHRM

www.hrprofessionalsmagazine.com.

Employment Law & Legislative Conference on March 23-25 in

Washington, DC, in this issue. It was such an honor to be a media sponsor for this fabulous annual event. I even caught a photo op with Hank Jackson, CEO of SHRM, at the Monday night reception held at the National Museum of Natural History. We are also introducing you to the SHRM Government Affairs Team, and bringing you highlights of the A-Team Capitol Hill visits. We invited the Senators from TN, KY, AR and MS to provide position statements on the four issues that the SHRM Advocacy Team discussed with them. We are delighted to share these with you as well!

Cynthia Y. Thompson | Editor cynthia@HRprosMagazine.com www.HRProfessionalsMagazine.com

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

4

www.HRProfessionalsMagazine.com

Nancy

on the cover

B. HAMMER

NANCY B. HAMMER Senior Government Affairs Policy Counsel Society for Human Resource Management Nancy is Senior Government Affairs Policy Counsel in the Government Affairs department of the Society for Human Resource Management (SHRM). Nancy joined SHRM in January 2006 and is responsible for advocating SHRM membership views in federal rulemaking and in response to regulatory proposals affecting the HR profession.

In addition, Nancy tracks court cases that raise critical issues for the HR profession and evaluates whether SHRM should intervene as amicus to ensure the HR viewpoint is considered by the court.

Prior to joining SHRM, Nancy spent 5 years as Legislative Counsel for Senator Bob Kerrey (D-NE). Nancy also served as Director of the International Division and Policy Counsel for the National Center for Missing & Exploited Children.

Nancy received her law degree from Washington University School of Law in St. Louis, Missouri and her Bachelor of Science degree in Political Science from Nebraska Wesleyan University. ď Ž

www.HRProfessionalsMagazine.com

5

SHRM

Employment Law and Legislative Conference

Meet the SHRM Government Affairs Team

MICHAEL P. AITKEN Vice President, Government Affairs

BOB CARRAGHER Senior State Affairs Advisor

LISA HORN Director, Congressional Affairs Co-Director, Workplace Flexibility Initiative

NANCY HAMMER Senior Government Affairs Policy Counsel

CHATRANE BIRBAL Senior Advisor Government Affairs

KATHLEEN COULOMBE Senior Advisor Government Affairs

CASSIDY SOLIS Workplace Flexibility Program Specialist

KELLY HASTINGS Senior Advisor Government Affairs

MEREDITH NETHERCUTT Senior Associate Member Advocacy JASON GABHART California State Government Relations Advisor

6

www.HRProfessionalsMagazine.com

SHRM

SHRM Employment Law and Legislative Conference

Employment Law and Legislative Conference

Capitol Hill Visits SHRM members visited lawmakers on Capitol Hill and discussed these four issues: ACA definition of full-time employees Employment verification

Proposed changes to FLSA overtime regulations NLRB union election rule

Lawmakers from TN, KY, AR, and MS provided these position statements: Senator Mitch McConnell (R-KY), Senate Majority Leader

(L-R) Mike Aitken, SHRM VP Government Affairs; Mitzi Root PHR, KYSHRM Legislative Affairs Director; Katelyn Conner, McConnell Legislative Aide; Pam Davis, SHRM A-Team Captain for Kentucky’s 3rd Congressional District Majority Leader Senator Mitch McConnell’s (R-KY) “I have grave concerns regarding the NLRB’s ‘ambush’ election rule, which is aimed at enriching political bosses at the expense of middle class workers. Republicans think workers should have the right to make an informed decision when casting their ballot in a union election. Among other things, the Administration’s ‘ambush’ rule would allow union bosses to access things like personal email addresses and cell numbers without a worker’s permission. Republicans refuse to stand by while the Administration unilateral attempts to strip away the most basic worker freedoms through regulation, which is why we challenged this extreme and partisan rule in March through a vote to override this regulation. I was extremely disappointed when the President chose his political friends over the interests of workers by vetoing Congress’s resolution of disapproval. Rest assured, we’ll continue to stand strong against the Obama Administration’s attempts to weaken workers’ rights.”

Lamar Alexander (R-TN) and Bob Corker (R-TN) with Charles and Cynthia Thompson

Lamar Alexander (R-TN) “Many businesses can’t afford Obamacare’s mandate and must reduce their number of full-time employees. The result of all this is that many workers are getting a pay cut. There is bipartisan support for repealing this provision and restoring full-time to 40 hours, which could give 2.6 million workers a pay raise.”

Bob Corker (R-TN) “Many have argued that the NLRB’s “ambush election” rule” would put major elements of the Employee Free Choice Act (EFCA) into place without Congressional approval. I have opposed EFCA since I was elected to the Senate and have both voted against the bill and co-sponsored S.J.RES.8, a joint resolution to disapprove the NLRB's rule. The resolution recently passed both the Senate and House but unfortunately was vetoed by President Obama. This proposed rule would greatly impede the rights of employers to effectively and legally communicate with their employees about their workplace. I have and will continue to support bills that would prevent or reverse NLRB's overreach.”

(L-R) Ruth Anderson, NEASHRM Chapter; Tom Cotton (R-AR), Steve Schulte, J.D., SPHR, ARSHRM Government Affairs Tom Cotton (R-AR) “Regrettably, over the last eight years the Obama administration has made it harder for small businesses across the country to keep their doors open. For example, last year the National Labor Relations Board (NLRB) proposed new rules to shorten the election process during which employees vote to determine whether to have a union represent them during negotiations with their employer.

The NLRB proposed and finalized similar rules in 2011, however those rules were thrown out by the U.S. District Court for the District of Columbia as part of the NLRB v. Noel Canning ruling. These changes would shorten the length of time in which a union certification election can be held, going from a median 38 days to under two weeks. I believe workers’ and employers’ rights must be protected, and these new regulations prevent employers from providing their workers with the information necessary to make a well-informed decision on union membership. President Obama recently vetoed S.J. Res.8, which would have overturned the proposed ambush election rules using the Congressional Review Act, but I will continue to work with Senator Alexander and the HELP Committee to highlight the cost and solutions to this rule.”

Cynthia Thompson, SPHR, with John Boozman (R-AR)

John Boozman (R-AR) “E-Verify has a proven track record of ensuring only legal workers are hired. Over 480,000 employers nationwide are using the system. That’s a large number. Unfortunately, it is still less than 10% of U.S. employers. We’ve got to get that percentage up. We need to rectify some of the challenges employers face when using E-Verify. For instance, if an employer is using E-Verify, the United States Citizenship and Immigration Services (USCIS) has all the information needed to make a determination on a potential employee’s status. There should be no reason for additional paperwork, including forms related to the I-9 process. E-Verify is commonsense technology that gives employers the proper piece of mind and allows the government to identify those who attempt to skirt the law. It is a good system that should be made mandatory, but in doing so, we should not create additional burdens on employers.”

Cynthia Thompson with Thad Cochran (R-MS) Thad Cochran (R-MS) Senator Cochran is an original cosponsor of the Congressional Review Act on Ambush Elections (S.J.Res.8), which the Senate approved (53-46). This resolution of disapproval would have blocked a new National Labor Relations Board (NLRB) regulation aimed at strengthening labor unions at the expense of private-sector employers.

“Our economy thrives when companies and their employees can make decisions about what’s best for them without undue interference from government regulations like the one proposed by the National Labor Relations Board.

This flawed plan would strengthen labor unions mainly at the expense of small businesses across America and hold back our future economic growth,” Cochran said. “I’m proud to cosponsor this resolution to block this proposed regulation and support our pro-growth agenda.”

President Obama vetoed this bill, and the new rule takes effect on April 14.

Roger F. Wicker (R-MS)

Roger F. Wicker (R-MS) “Immigration policy has important ramifications for our workforce. I oppose policies that allow illegal immigrants to take jobs from American citizens. Many Mississippi industries employ legal immigrants for part of their workforce. Others unknowingly hire illegal immigrants. Mississippi businesses and farms must have access to the best technology to verify the status of prospective employees. The federal government has implemented E-Verify, an Internet-based system to determine a worker's employment eligibility almost instantaneously. This system is an essential tool in complying with immigration law, and it is important that we pass legislation to make the E-Verify program permanent.” www.HRProfessionalsMagazine.com

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AFFILIATE

OF

20th ANNUAL HUMAN RESOURCE CONFERENCE & EXPO The 20th Annual Human Resource Conference & Expo will be held in Biloxi, Mississippi from May 11 - 13, 2015 at the Beau Rivage in beautiful Biloxi, MS. This year's theme focuses on 20/20 HR Vision.

The conference begins Monday afternoon with a Pre-Conference Workshop “Strategic Leadership for HR Executives.”

Tuesday morning begins with an Opening General Session at 8:00 a.m. featuring Dr. Frances Lucas, Professor of Practice for the Human Capital Development Program at USM. Both days are packed with information-filled breakout sessions, networking opportunities, and quality time spent with exhibitors who offer the latest resources for Human Resource Professionals and their organizations.

Luncheon Speaker Matt Jones is a world class professional speaker and author who is committed to inspiring audiences and delivering strategies to help organizations thrive in the midst of adversity and excel to new heights of performance. Matt is currently the author of five books with more to come in the future. Attendees, will receive a FREE copy of Matt’s book “Life is a Marathon.”

Closing Speaker Jennifer McClure has provided workshops and training for leadership, human resources and talent acquisition teams at a variety of organizations – including Fortune 100 clients. Jennifer brings perspective and prior experiences as a Human Resources executive in privately held and Fortune 500 companies, as well as experience as an Executive Recruiter and Executive Coach.

Attendance at the 20th Annual Human Resource Conference and Expo will offer up to 6 recertification credits for the Certified Human Resource Professional. The Conference ends at 1 PM on May 13.

Register now for this exciting and informative event by visiting HTTP://MSSHRM.ORG – Keep your HR Vision Clear!

This program has been submitted for General recertification credit hours toward PHR, SPHR, and GPHR recertification through the HR Certification Institute. For more information about certification or recertification, please visit HR Certification Institute at http://www.hrci.org.

Past conferences have been approved for up to 6.0 hours of General re-certification.

8

www.HRProfessionalsMagazine.com

T

he SHRM Annual Conference & Exposition is the largest and best HR event in the world, providing you with the tools and resources you need to thrive, personally and professionally.

You’ll learn targeted strategies and get practical takeaways you need to become an influential leader, a confident advocate, a resilient employee, and a more skilled HR professional.

KEYNOTE SPEAKERS:

MARCUS BUCKINGHAM SHERYL SANDBERG DR. OZ FEATURING:

200+ SESSIONS INNOVATIVE LEARNING GLOBAL NETWORKING RECERTIFICATION CREDITS WORLD’S LARGEST HR MARKETPLACE

SHRM 2015 ANNUAL CONFERENCE & EXPOSITION June 28 – July 1 Las Vegas Convention Center Las Vegas

Register NOW to save! annual.shrm.org/hrprofessionals

Pregnancy Discrimination and Light Duty Policies:

the Supreme Court Changes the Rules

By COURTNEY LEYES

In

2006, our firm represented the employer in a lawsuit and subsequent appeal when the plaintiff employee had been fired when she was pregnant, because, as a fairly new employee, she had no Family Medical Leave Act leave and no leave available under the employer’s leave policies, and the employer refused her request for light duty since

she had suffered no job-related injury. Both the Memphis federal judge and the Sixth Circuit Court of Appeals agreed with us that the Pregnancy Discrimination Act (PDA) just meant that employers had to treat pregnant employees the same as other employees with illnesses, i.e., there was no windfall for pregnant employees under the Act. Reeves v. Swift Transportation, 446 F.3d 637 (6th Cir. 2006).

Our client prevailed in that case, but would the company prevailed today? Well, in March, the U.S. Supreme Court reached an opposite conclusion with similar facts than our prior case. Young v. UPS, No. 12-1226 (Mar. 25, 2015). In this new precedent, UPS’s policy limited light-duty accommodations to three classes of employees regardless of whether they had sought light duty for pregnancy.

According to the Supreme Court, the plaintiff had sufficiently demonstrated that there was a real fact dispute as to whether the employer had unreasonably treated other non-pregnant employees more favorably. Id.

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www.HRProfessionalsMagazine.com

Background of the PDA The Title VII definition of sex discrimination was modified by the PDA in 1978, to include pregnancy-based discrimination. Based on this modification, employers were prohibited from discriminating against employees on the basis of pregnancy, childbirth, or related medical conditions. Approximately 36 years later, the EEOC published some guidelines under the PDA, adopting the position that employers must treat pregnant workers the same as non-pregnant employees seeking light-duty work. Therefore, under these guidelines, employers could not reserve light-duty opportunities only for employees with job injuries.

The Facts Plaintiff Young was a UPS part-time delivery driver in Maryland. She became pregnant in 2006, and her doctor told her she should not lift over 20 pounds in her first 20 weeks of pregnancy and not over 10 pounds after that. UPS management told Young that, per company policy, she would not be allowed to work—even light-duty work—with the lifting restriction.

The company’s policy was to accommodate employees’ light-duty restrictions’ genesis were job-related. Because her lifting limitations had not arisen from a work injury, the company denied Young’s request for light duty. Since she could not perform her regular duties, UPS would not let Young return to work. She used up her FMLA leave time and went on an extended, unpaid leave, until finally her medical benefits expired. Although she eventually returned to work at UPS, Young sued her employer for monetary damages, claiming that UPS had violated the PDA by denying her the light-duty work opportunity.

The Issues Initially, Young’s lawsuit initially been dismissed by the district court, since she had no direct evidence of discrimination and had not shown that she had been treated less favorably than non-pregnant employees who had similar work limitations. The Fourth Circuit Court of Appeals approved that decision, ruling that the PDA does not require employers to give more-favorable treatment to pregnant workers.

To the Supreme Court, Young argued that the Court ought to base its decision on a provision of the PDA that states that "women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work." She asserted that this provision means that she had to be treated the same as workers seeking light duty resulting from job injuries, regardless of whether the need for light duty arose from a work-related injury or pregnancy.

The Supreme Court decided that Young had to be allowed that opportunity. Here, the Court noted, the plaintiff could create a triable issue by demonstrating that the UPS had accommodated “a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers.” The Court further said that Young had demonstrated that there was a legitimate issue as to “whether UPS provided more favorable treatment to at least some employees whose situation cannot reasonably be distinguished from hers.” The Court held that the trial needed to determine whether Young could prove that there was a legitimate issue as to “whether UPS’ reasons for having treated Young less favorably than those other nonpregnant employees were pretextual.”

Applicability of the Supreme Court’s Ruling for Companies The issue addressed by the Court was limited to whether UPS’ light-duty policy, but could the decision later be applied to other employer policies as well? Could pregnant workers get a windfall, as the ADA does for disabled employees? Pregnant employees may or may not now have “most favored nation” status among impaired workers— that is still unclear. Most Americans likely would not argue against the concept that employers ought to give some sort of windfall or protected status to pregnant employees because of their pregnancy, but we also must be honest enough to admit that there will be a financial cost to employers for such a rule, making it yet more difficult for US companies to compete globally with their products.

In the meantime, companies should examine their policies that might impose greater burdens on pregnant workers. If a policy accommodates only limited classes of workers, it could be wise to also consider how pregnant workers could reasonably be accommodated.

The Supreme Court said that it doubted that Congress intended to give pregnant employees a special windfall, but stated that, when a company creates a policy that places a burden on pregnant workers, the workers should be allowed to demonstrate that the reasons for the policy are insufficient to justify that burden.

The Supreme Court said that it doubted that Congress intended to give pregnant employees a special windfall, but stated that, when a company creates a policy that places a burden on pregnant workers, the workers should be allowed to demonstrate that the reasons for the policy are insufficient to justify that burden.

Courtney Leyes, Attorney Fisher & Phillips, LLP cleyes@laborlawyers.com www.laborlawyers.com www.HRProfessionalsMagazine.com

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SHRM

Employment Law and Legislative Conference

Highlights from the SHRM Employment Law and Legislative Conference March 23-25 in Washington, DC

1

Welcome Reception at the National Museum of Natural History

7

Phillip Miscamarra and Lauren McFerran (NLRB)

2

Mike Aitken

3

Cathy McMorris Rogers (R-WA)

8

Lisa Horn

Congressman David Cicilline (D-RI)

9

Rhett Buttle, Meredith Olafson, Mark Iwry

4

5

Dan Abrams

10

Leslie E. Silverman

6

Dr. David Weil

11

Gerri Fiala

12

Jim Reidy

1 SHRM members enjoyed the opening reception at the National Museum of Natural History. 2 Mike Aitken, VP SHRM Government Affairs, opened the conference with his presentation on “The Washington Outlook: The Impact of the 114th Congress on HR’s Public Policy Agenda.”

3 Cathy McMorris Rogers (R-WA) spoke on workplace flexibility during the Breakfast Program on Capitol Hill for Advocacy Day. 4 Congressman David Cicilline (D-RI) welcomed SHRM members to Capitol Hill during the Breakfast Program on Capitol Hill. 5 Dan Abrams, Legal Analyst for ABC News; and CEO, Abrams Research; Founder/Publisher, Mediate.com, was the speaker for the Closing General Session. He provided insightful analysis on current events, the law and the highest-profile cases gaining media attention. 6 Dr. David Weil, Administrator of Wage and Hour Division, U.S. Department of Labor, was the Luncheon and General Session Speaker on Tuesday. His topic was, “The DOL’s Top Priorities for 2015.”

7 Phillip Miscamarra and Lauren McFerran spoke on “NLRB Update: An Insider’s Perspective.” G. Roger King, attorney, was the moderator.

8 Lisa Horn, SHRM’s Director, Congressional Affairs, and Co-Director, Workplace Flexibility Initiative. 9 Rhett Buttle, director, Private Sector Engagement, U.S. Department of Health, and Human Services, Washington, DC; Meredith Olafson, senior policy advisor, Office of the Administrator, U.S. Small Business Administration; Mark Iwry, senior advisor to the Secretary and Deputy Assistant Treasury Secretary for Retirement and Health Policy, U. S. Department of the Treasury, presented, “The Doctor is In: ACA Employer Mandate.” 10 Leslie E. Silverman with with Fortney & Scott, LLC spoke on “Are Corporate Wellness Problems Headed for Life Support? The EEOC’s Challenges to Employer Wellness Plans and Capitol Hill’s Response.” 11 Gerri Fiala, deputy assistant of Employment and Training Administration, U.S. Department of Labor, Washington, DC, her topic was “The New Workforce Innovation and Opportunity Act: What It Means for You.” 12 Jim Reidy, attorney and chair, Labor and Employment Law Group, Sheehan Phinney Bass + Green, PA, Manchester, N. H., spoke on “New Challenges to Drug and Alcohol Testing.”

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AN EMPLOYER’S GUIDE TO COMBATTING OBESITY IN THE WORKPLACE

By ANNÉ GIBSON, SARAH MARTIN, STACIE ENGELMANN and SARAH AUER

Obesity has reached epidemic proportions and is having significant financial impact on employers throughout the United States. On its own, obesity poses a threat to employers and their employees. Worse, obesity drives a variety of chronic conditions that come with large price tags, not to mention serious reductions in productivity.

InfoLock® Employee Benefits is Lockton’s proprietary data mining warehouse. The following graphs are based on a review of the data in InfoLock:i Chronic Conditions Diabetes

Hypertension

Back Pain

Hyperlipidemia

64+36H57+43H45+55H 39+61H 64%

57%

of diabetics are obese

6.38x

Total Allowed PMPM $

432.70

$

2.41x

more likely in obese

Total Allowed PMPM

normal weight

991.76 obese

$

404.51

$

2.29x

more cost than nondiabetics

normal weight

775.03 obese

1.92x

more cost than adults without

of adults with back pain are obese

of adults with hyperlipidemia are obese

4.83x

more likely in obese

39%

45%

of adults with hypertension are obese

1.26x more likely in obese

more likely in obese

Total Allowed PMPM $

428.73

$

normal weight

682.96 obese

1.59x

more cost than adults without

Total Allowed PMPM $

404.16

$

normal weight

758.65 obese

1.88x

more cost than adults without

SOURCE: InfoLock Book of Business

Total Allowed Amounts Total Allowed Amounts

in obese population i

1.35x

more than normal weight

a l m

i g h t

Hip Replacement

more than overweight

w

e

r n o r e o v e s o b e

$594.46

9.51x more likely

$29,286 average plan pays

Knee Replacement

8.74x more likely

$29,373

average plan pays

total allowed PMPM

SOURCE: InfoLock Book of Business

Obesity Shortens Lifespan Other concerns came to light in a recent study published in The Lancet, a collection of health journals. According to this study, obese individuals have a reduction in life expectancy and a reduction in overall healthy life years. In fact, in some age groups, obese individuals can expect to experience two fewer decades of healthy years.ii Productivity In addition to medical costs, obesity has a more direct impact on employees’ ability to be productive and present at work. Shell Oil found that obese employees were more likely to miss an additional 3.73 days of work per year, as compared to normal weight workers, a productivity loss of $11.2 million per year (defined as dollars paid while not at work).iii Research has also shown that weight may affect physical and mental health conditions that could, in turn, affect productive ability during the work day.iv, v What Can Employers Do to Stem the Tide?

With this epidemic creating such dramatic effects on employees, employers of choice are starting to apply a more aggressive approach to addressing obesity. Several key approaches to overcoming obesity are prevalent: 14

Lifestyle Modifications Many employers are providing the first line of defense in helping an individual lose weight by offering a comprehensive lifestyle program led by a team of registered dietitians, mental health professionals, and exercise specialists. Together they can create a well-rounded program that will teach participants how to establish good dietary and exercise habits.

While lifestyle changes, with a focus on nutrition counseling, are likely to provide more modest weight loss than that associated with bariatric surgery, smaller amounts of weight loss are still important. In fact, studies show that members who lose approximately 5-10 percent of their body weight will experience a reduction in blood pressure, cholesterol, and risk for type 2 diabetes.vi This approach can have significant impact on an individual’s wellbeing, and there are no negative side effects caused by nutritious food. Because there is little cost associated with these programs, medical necessity reimbursement practices may not be necessary.

Lockton Can Help You Evaluate Program Options As you review your options for medically supervised nutrition counseling, Lockton can help ensure you’ve considered all important issues, some of which are noted below. more information on the impact of obesity-related counseling and v

VerifyFor which providers are certified to deliver whetherobesity specificonproviders (endocrinologists, bariatric physicians, dietitians, your employees, please psychologists, exercise specialists) will be reimbursed. click and to see our infographic.

v

Coverage of medically supervised weight loss programs is not recommended without thorough analysis by a Lockton Health Risk Solutions Consultant or Medical Director.

obese members cost

$471.10

v Bariatric surgery

v

The Affordable Care Act has not set limits for this type of care. The number of visits available for a health plan member is determined by medical necessity.

Surgeries Surgeries

including medical and Rx i

$439.10

v Weight loss medications

Each is described on the following pages, along with key issues employers should consider when determining which options they’ll encourage and cover. Also described are certain legal considerations employers need to understand as they address the impact of obesity in the workplace.

v

While not required, Lockton recommends members receive nutrition counseling through a registered dietitian.

PMPM = per member per month

1.26x

v Lifestyle modifications

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Weight Loss Drugs In the past few years, the Food and Drug Administration (FDA) has approved three new weight loss drugs. Qsymia® and BELVIQ® were both approved in 2012. Contrave® was approved in late 2014. To help employers see past the high price tag associated with these medications, manufacturers are aggressively marketing them through hundreds of drug representatives, free trials, and coupons. They’re targeting doctors to encourage prescriptions and pharmacy benefit managers (PBMs) to suggest the medications be added to formularies. Consumers are the focus of free trials, coupon programs, and free patient support programs. Therefore, you may get questions from your employees about coverage for these medications.

All medications in this category are meant for adults who fit into one of two categories: v

BMI ≥ 30 v

BMI ≥ 27 with at least one weight-related problem, such as high cholesterol or high blood pressure Side Effects May Be Serious While not common, there is concern regarding certain serious side effects from all three medications: v

Qsymia may cause birth defects, increased resting heart rate, suicidal thoughts or actions, and serious eye problems. v

Contrave also can cause suicidal thoughts or actions, along with seizures, increases in blood pressure or heart rate, liver damage, manic episodes, and eye problems. v

Belviq may cause valvular heart disease, changes in attention or memory, depression or thoughts of suicide, decreases in blood cell count, and slow heartbeat.

In addition, all three medications come with a similar warning: It is not known whether this drug changes your risk of heart problems, stroke, or death due to heart problems or stroke.

Further Evaluation is Required Though each of these drugs is approved today, the longterm effects are still unknown. In all three cases, the FDA is requiring the drug makers to conduct further studies to determine if other serious risks exist. In particular, attention is being paid to the potential for cardiac complications. More information will be shared as these studies are concluded.

Limited Results to Date Despite the excitement generated by the news of FDAapproved weight loss medications, results to date have been somewhat modest. Only Belviq and Qsymia have achieved the recommended minimum weight loss goal of 5 percent. Qsymia has been the most effective to date, with the highest percentage of weight loss.

Careful Decision-Making is Key Employers should consider a variety of issues so they can make an informed decision about whether to cover these medications. v

From a PBM perspective, the drugs must be carefully managed to prevent abuse. v

The obesity medications available today must be used in combination with exercise and diet. They are not effective as a standalone treatment. v

Auto-refills are not recommended. Members taking any of these three medications must be evaluated after 12 weeks to see whether the drug is working. If an individual hasn’t lost 5 percent of his or her baseline body weight by this time, treatment should be discontinued. In other words, if the drug doesn’t work pretty quickly, the risks begin to outweigh any benefit to the individual. v

In general, weight loss drugs have a mixed history, with older obesity drugs removed from the market after links to heart problems, stroke, and death.

More study is required by the FDA. v

For those clients whose PBM is Express Scripts, use of these drugs will require prior authorization.

Bariatric Surgery When other methods for weight loss have been ineffective, some individuals become candidates for bariatric surgery. Relatively new, less invasive procedures are yielding significant results not only in loss of weight, but also in improvement of diabetes, and even resolution of diabetes in some patients. Complication rates are also improving for appropriately selected individuals. Even so, bariatric surgeries are still sometimes viewed with skepticism by employers, who have to decide whether to cover the procedures.

Periodically, Lockton distributes a request for information (RFI) to a variety of major medical carriers, including CIGNA, UnitedHealthcare, BlueCross BlueShield of Kansas City, Anthem, Aetna, and Humana. According to the most recent RFI results, fewer than 25 percent of self-funded employers in these carriers’ current books of business cover the cost of bariatric surgery.

Even so, rates of bariatric surgery are on the rise. The American Society for Metabolic and Bariatric Surgery reported that the number of bariatric surgical procedures increased from 103,000 in 2003 to an estimated 179,000 in 2013.

In making the decision to cover bariatric surgery, an employer should consider the following program parameters.

Require members to use designated centers of excellence (COEs) for the procedure, as well as for preoperative and postoperative care.

COE designation assures the member that the surgeon has a high volume of experience and low rate of complications and rehospitalizations. In a studyvii evaluating bariatric surgeons, those surgeons with a lower rating were found to have higher rates of complications and mortality in patients. Procedures were found to last longer and patients experienced higher rates of reoperation and rehospitalization. Employers should consider making inquiries about the number of procedures performed and the complication rates. Your Lockton Health Risk Solutions Consultant can assist with this task.

Review the list of procedures with your Lockton Health Risk Solutions Consultant.

First you’ll want to determine which procedures are covered by your medical carrier. You’ll also need to ensure those procedures are typically deemed medically necessary rather than still in the investigational or experimental stage.

Approved procedures typically include the following: v Roux-en Y gastric bypass v L aparoscopic adjustable silicone gastric banding (lap band) v Sleeve gastrectomy v Vertical banded gastroplasty v Duodenal switch procedures Design the benefit to provide members with immediate and long-term support.

When a member has bariatric surgery, an important element of his or her care is case management. Before surgery, this includes an extensive presurgical evaluation to determine whether the individual is truly committed to the changes needed to make bariatric surgery a success. Case management is also crucial directly after surgery to assist with any complications related directly or indirectly to the surgery.

In addition, it’s important for members to understand the full impact of bariatric surgery. The changes will extend beyond simple weight loss, affecting nearly every aspect of life, including eating habits, nutritional needs, changes in chronic conditions that may improve dramatically, self-image, and even social behaviors. As a result, members who have bariatric surgery will need access to the right tools and resources to help them maintain their health for life.

Where Obesity and the Law Intersect Created in 1990, the Americans with Disabilities Act (ADA) prohibits discrimination against individuals with disabilities in employment practices. Part of the ADA’s definition of disability is related to the perception that an individual has a disability.

Therefore, even if an employer incorrectly assesses an applicant/employee as having a disability based on the employee’s weight, that individual is protected by the ADA. So in cases where the employee’s condition doesn’t substantially limit a major life activity or prevent the employee from doing the job, the employee could be protected from discrimination by an employer who makes these incorrect assumptions based on the employee’s weight.

Obesity Is a Disability Fast forward to 2008, when the Americans with Disabilities Act Amendments Act (ADAAA) amended the ADA and expanded the definition of a disability.

Then in 2013, the American Medical Association officially recognized obesity as a disease. Even the Equal Employment Opportunity Commission (EEOC) has joined the conversation, stating that “severe” obesity is itself an impairment that could be a disability. In combination, these decisions likely make it easier to prove an obese employee does have an actual or perceived disability that is protected by the ADA.

In addition to the potential for categorizing obesity as a disability, it may also be considered a serious health condition for purposes of providing leave under the Family and Medical Leave Act (FMLA). In cases where employees are ineligible for (or have exhausted) FMLA, they still may be eligible for a non-FMLA leave of absence, per the ADAAA. Creating Accommodations for Obese Employees The ADA requires that employers provide reasonable accommodation for the known disability of a qualified individual, unless doing so would impose an undue hardship on the operation of the employer’s business.

Today this may include individuals with obesity.

So what constitutes a reasonable accommodation?

It’s a modification or adjustment to a job or work environment that permits a qualified applicant or employee with a disability to participate in the job application process, to perform the essential functions of a job, or to enjoy benefits and privileges of employment equal to those enjoyed by employees without disabilities.

Accommodations can vary, depending on the needs of the individual applicant or employee. Not all people with disabilities (or even all people with the same disability) will require the same accommodation.

Examples of accommodations include things such as large-rated chairs, seat belt extenders, or specially designed ladders and harnesses. In some instances, providing additional leave can be a reasonable accommodation.

With these legal requirements in mind, employers should carefully consider requests for accommodation from applicants and employees who are obese. They should carefully avoid suggesting that an applicant’s or employee’s weight alone indicates he or she cannot perform a particular job.

For more information on accommodations for various conditions, including obesity, visit the Job Accommodation Network. In addition, Lockton’s Human Resources Consulting Practice has developed an ADA Compliance Toolkit to assist clients in addressing their ADA obligations.

Summary Addressing obesity in the workplace will require a tailored approach, with more than one option to give your employees the greatest chance of success. For assistance in considering your options and evaluating coverage decisions, contact your Lockton Account Team.

REFERENCES

The data presented is based on April 2013-March 2014 medical, Rx, and biometric paid amounts, normalized by member months. The data includes any member with a BMI in the InfoLock Benchmark Database, over the age of 18, with at least one month of member enrollment, including high cost claimants. ii http://www.thelancet.com/journals/landia/article/PIIS2213-8587(14)70229-3/abstract iii Tsai SP, Ahmed FS, Wendt JK, Bhojani F, Donnelly RP. The impact of obesity on illness absence and productivity in an industrial population of petrochemical workers. Ann Epidemiol. 2008;18(1):8–14. iv Trogdon JG, Finkelstein EA, Hylands T, Dellea PS, Kamal-Bahl Indirect costs of obesity: a review of the current literature. Obes Rev. 2008;9(5):489–500. v Ricci JA, Chee E. Lost productive time associated with excess weight in the US workforce. J Occup Environ Med. 2005;47(12):1227–1234. vi Centers for Disease Control vii “Surgical Skill and Complication Rates after Bariatric Surgery,” The New England Journal of Medicine, John D. Birkmeyer, M.D., Jonathan F. Finks, M.D., et al., Oct.10, 2014 i

Ashley Pace

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

Brad Owens

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

www.HRProfessionalsMagazine.com

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P Conference Program Information

General Information

Highlights from the TPMA Conference | April 14-17 in Gatlinburg

P Conference Program Information

Pre-conference activities o 3 Pillars of HR Certificate Program 1 Reform Best o Webinar – Healthcare Practices Conference Sessions o “The Heart and Soul of Leadership” o “A Call to Urgency: 21st Century Leadership Competencies” o “Labor & Employment Law Update” o “Leading Technology Trends Driving Human Resources” o "Strategies to Increase an Organization's Bottom Line" Panel Discussions o “What’s at the Heart of Employee Engagement?” o “Heart Healthy Government Operated Clinics” o “The Art of Wellness Works”

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General Information

When: April 14th – 16th, 2015 Where:2 Park Vista Hotel 705 Cherokee Orchard Road Gatlinburg, TN 37738

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PERFECT ALIGNMENT. Relationship. Reliability. Respect.

At the center of our Employee Benefits and Labor & Employment practices.

N A S H V I L L E K N O X V I L L E M E M P H I S W A S H I N G T O N D C bassberry.com

www.HRProfessionalsMagazine.com

When: April 14th – 16th, 2015

Where: Park Vista Hotel 705 Cherokee Orchard Road Gatlinburg, TN 37738 The rate is $83.00 per night. One Bedroom Suites are available for $285 per night. Two Bedroom Suites are also available for $375.00 per night.

King Suites and Family Suites are available upon request for $183.00 per night. Reservations should be made by March 20th, 2015 to get the conference rate. In order to best serve our attendees, you can make your reservations by calling the hotel directly. The on-line booking code is “PMA”.

Telephone: (800) 421-7275 www.tnipma.org Registration: OPENING 03/01/2015

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For More Information Contact Alan Jones, Conference Chair at (865)342-3062; or Richard Stokes, Executive Director at (615)532-4956.

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Telephone: (800) 421-7275 www.tnipma.org Registration: OPENING 03/01/2015

Contact Alan Jones, Conference Chair at (865)342-3062; or Richard Stokes, Executive Director at (615)532-4956.

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The rate is $83.00 per night. One Bedroom Suites are available for $285 per night. Two Bedroom Suites are also available for $375.00 per night.

King Suites and Family Suites are available upon request for $183.00 per night. Reservations should 5 be made by March 20th, 2015 6 to get the conference rate. In order to best serve our attendees, you can make your reservations by calling the hotel directly. The on-line booking code is “PMA”.

For More Information

Blog: bassberrylabortalk.com

Pre-conference activities o 3 Pillars of HR Certificate Program o Webinar – Healthcare Reform Best Practices Conference Sessions o “The Heart and Soul of Leadership” o “A Call to Urgency: 21st Century Leadership Competencies” o “Labor & Employment Law Update” o “Leading Technology Trends Driving Human Resources” o "Strategies to Increase an Organization's Bottom Line" Panel Discussions o “What’s at the Heart of Employee Engagement?” o “Heart Healthy Government Operated Clinics” o “The Art of Wellness Works”

@BassBerryLabor

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1 Alan Jones, 2015 TPMA Conference Chair, welcomes attendees at the Park Vista Hotel in Gatlinburg. 2 Ruth Akers with the City of Bristol is the 2015 TPMA President. 3 The 2015 TPMA Conference Committee (L-R) Carla Taylor, Ora Applewhite, Peter Voss, Ruth Akers, and Felecia Boyd 4 Graduates of the Three Pillars of Human Resources Training.

Ernie Ricketts, Ph.D., SPHR, was the instructor. Ernie is the Director of Organizational Development for the TN Department of Human Resources. 5 Alan Jones led “Painting with a Twist” on Wednesday evening. 6 Shannon Brown, SR VP, Chief HR & Diversity Officer for FedEx Express, spoke on “The Heart & Soul of Leadership.” 7 Trish Holliday, Assistant Commissioner and Chief Learning Officer for the TN Department of Human Resources, spoke on “A Call to Urgency: 21st Century Leadership Competencies.” 8 Bridgett Tubbs-Jones, Director of Legal Services for the TN Department of Human Resources, and Howard Jackson, Attorney with Wimberly, Lawson, Wright, Daves & Jones, presented “Labor & Employment Law Update.” 9 Ernie Ricketts, Ph.D., presented “Change Management and HR’s Role.” 10 Debra Finney, Outreach & Education Manager with the EEOC Memphis District, spoke on “Pregnancy & Discrimination Retaliation.” 11 Austin Baker, President and CEO of HRO Partners, spoke on “Innovative Tech Trends Driving Human Resources.” 12 LeeAnn Bailes-Foster, Founder Team Foster HR Strategy, LLC, spoke on “What’s at the Heart of Employee Empowerment?” Chad Roedder, HR & Communication Tennessee Valley Authority was co-presenter. 13 Chris Crouch, Partner, with DME Leadership Development Consulting, was the Closing Keynote Speaker. His topic was “Pathways to the Heart and Art of HR.” 14 Oris Neal, Scholarship Recipient; Patsy Fuller, recipient of the Richard L. Stokes Personnel Achievement Award; and Samantha Chittum, Scholarship Recipient

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The Rise of Specialty Drugs:

Is Your Health Plan Prepared?

By CHRIS DAVIS

For the better part of the last decade, pharmacy costs have generally represented anywhere from 20 to 25 percent of total health plan costs. But over the past three years in particular, noticeable and sizeable growth in specialty drugs has occurred.

In 2013, traditional drug trend increased by less than 1 percent, yet overall drug trend increased by 3.8 percent. That additional growth from “non-traditional” drugs represents the emergence of specialty drugs in a matter that will act as a primary cost driver for employer health plans moving forward, as 65 percent of new drug spending over the past two years was for specialty medication.

Industry projections assume that 80 percent of the top ten drugs sold in the United States will be specialty drugs by 2016.

While estimates of growth have varied mildly, general consensus in the pharmacy management industry suggests specialty costs will quadruple to around $400 billion by 2020. This estimate seems to be supported by observations that the drug-manufacturing development pipeline is ramping up efforts in the specialty fields.

Currently, 50 percent of drugs in development are considered specialty in nature and around 70 percent of new drugs that will be approved to hit the market in the near-term will be defined as specialty drugs.

Until recently, most employers looked at pharmacy costs by observing two sectors: name-brand drugs and generic drugs.

Current projections indicate that specialty drug spend will eclipse 33 percent of total drug spending for a health plan by 2016. Before that occurs, employers must begin looking at drug spend in three sectors in how they analyze, determine planguidance and build strategy: 1) Specialty drugs 2) name-brand drugs and 3) generic drugs.

What qualifies as a specialty medication?

Generally speaking, a specialty medication meets one or more of the following criteria: • Costs per script are greater than $750 per month • Treats a rare and/or intensive condition not typically associated with chronic diseases • Requires specific handling or monitoring processes • Used in a limited distribution network As of 2013, cancer, multiple sclerosis, rheumatoid arthritis, hepatitis C and growth hormone accounted for more than 60 percent of the specialty market. Given the investment in this drug category, costs in the specialty pharmacy arena will be diversified to include further drugs developed for HIV, hemophilia and other costly conditions that normally fall outside of the scope of typical disease management treatments for diabetes, hyperlipidemia and the like. More than half of specialty drugs in the developmental pipeline are high-cost oral medications that intend to act as a substitute for other treatments, such as injectable drugs typically provided in physician practices, outpatient centers or through infusion treatment.

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What conditions are typically associated with specialty drugs?

While this list is expansive, it will change and grow as further research and development occurs around other disease states and approval is provided. The percentages represent that condition’s estimated percent share of the specialty drug market: • Oncology/Cancer: 30%

• Hemophilia: 3%

• Rheumatoid Arthritis: 12%

• Hepatitis C: 2%

• Multiple Sclerosis: 10%

• Growth Hormone: 3%

• HIV/AIDS: 8%

• Cardiovascular:3%

• Inflammatory Bowel Disease: 3%

• Transplant: 1%

• End Stage Renal Disease: 3%

• Other: 19%

• Intravenous Immunoglobulin: 4% Since a small percentage of an employer population (generally less than 3 to 5 percent) will have any of the conditions that qualify for specialty drug treatments in the major areas of research and development, drug spend management will skew traditional per member per month (PMPM) metrics. A large share of medical spend will be isolated in a particularly small set of members who have these conditions.

How can an employer prepare for this significant change?

Basic observations on specialty drug spend will likely mirror an often under-emphasized, yet obvious trend that commonly occurs in medical spend: most costs are pooled in a small percentage of the population (generally far less than 10 percent of total membership) that have exceptional needs that cannot be addressed through lifestyle changes. These will quickly exceed the maximum out-of-pocket employee expenditures. In those instances, personalized and coordinated care has to exist for members to: • Get the highest quality medical care as it relates to their needs • Maintain medical compliance and adhere to evidence-based guidelines for treatment • Gain assistance in navigating the medical continuum to offset costs related to waste, mismanagement and improper treatment Since specialty pharmacy costs will mimic these resource demands, employers should be prepared to build metric-driven tactics to effectively address how specialty drug coverage is engaged at both the member level and how the costs are appropriately staged to minimize unnecessary cost.

Funding questions to consider: 1. How does an employer create an opportunity to ensure specialty drugs are accessed only in situations where they are the best option?

2. How does an employer build a process to ensure they are getting to most cost-effective method of delivery for specialty medications?

3. How does the employer design their benefit plan to distribute the specialty medications effectively without creating an overall plan burden that will result in increased costs for the employer and overall membership base?

4. How will an employer’s comprehensive plan design interact and impact this particular cost?

Conversely, how will specialty drug usage interact and impact comprehensive plan design?

5. How does an employer engage the specialty pharmacy process? Should it be directly through the carrier/TPA or through a vendor relationship?

6. How does an employer ensure they are getting the best arrangement for specialty medication as it relates to overall medical costs?

Given the climate regarding this expansive market change, employers should prepare in a constructive manner by analyzing current risks within their population’s medical and pharmacy spend. They should work with experienced consultants and other health plan stakeholders that understand the progression in order to determine proper benchmarks and strategy for the next five years –the precise timeframe this specialty medication boom will occur.

Chris Davis, MPH, ACSM Director of Health Mgmt & Claims Informatics Regions Insurance Inc James.c.davis@regions.com www.regionsinsurance.com

Have Questions? Let’s talk.

When it comes to securing the right answers to comply with the Affordable Care Act, who you ask can be every bit as important as what you ask. Let the ACA-trained professionals of the Regions Insurance Client Resource Team provide the guidance you need to steer your organization in the right direction.

Tom Hayes

Katrina McKinney

Employee Benefits Practice Leader tom.hayes@regions.com 479-684-5259

Sales & Marketing Coordinator katrina.mckinney@regions.com 205-264-7177

www.regionsinsurance.com

The Coverage You Need.

The Guidance You Trust.

Find Regions Insurance offices in these states: Alabama, Arkansas, Florida, Georgia, Indiana, Louisiana, Mississippi, South Carolina, Tennessee and Texas ©2015 Regions. Regions Insurance is an affiliate of Regions Bank. Products and services are offered by Regions Insurance, Inc., and underwritten by unaffiliated insurance companies.

SM

SHRM

Employment Law and Legislative Conference

SHRM’s Health Care Reform Survey Finds Some Organizations Adjusting Coverage and Part-Time Employees’ Hours Employers turning to alternative health care plans for more affordable coverage

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ome employers are reducing employee hours for part-time workers as a result of the Affordable Care Act (ACA), a new Society for Human Resource Management (SHRM) survey on health care reform found.

72% of U.S. organizations have not considered reducing employee hours for part-time workers as a result of the ACA mandate that employees working 30 hours a week be offered health care coverage, according to the Health Care Reform Survey — 2015 Update, which was released at SHRM’s Employment Law & Legislative Conference.

But 14% of organizations already have reduced hours for part-timers, and another 6% plan to do so.

Human resource professionals have responsibility in their organizations for carrying out the requirements of the ACA, making them the most knowledgeable about the impact of health care reform on employers. Today’s survey — released as the landmark legislation marks its fifth anniversary — updates research done in 2013 and 2011.

The survey also found that 91% of organizations have not considered reducing employee hours for full-time employees, and 90% said they have not considered reducing the overall number of employees as a result of the ACA employer mandate.

“As organizations learned more about the law, they found that their coverage levels were already the same or more than what the law required, minimizing the adjustments that some anticipated employers would need to make when the ACA was created,” said Evren Esen, director of SHRM’s survey programs.

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The SHRM survey also found: • 54% of employers require employees to work 30 hours a week to be eligible for coverage, an increase from 44% in 2014 and 39% in 2013. But 26% of organizations require employees to work more than 30 hours a week to be eligible. “Some employers actually might choose for economic reasons to take a penalty rather than make this change,” Esen said.

• Two-thirds of organizations (66%) believed their organization offered the same level of health care benefits as before the ACA was enacted.

• About three-quarters (77%) of respondents said that their health care coverage costs increased from 2014 to 2015, and 6% saw a decrease.

• About three out of five organizations have made changes to their health care coverage in the last year.

• 54% offered alternative health care plans such as health savings accounts and health reimbursement accounts this year, compared to 37% in 2013. In addition, 13% of respondents said they planned to offer alternatives in the future. “Organizations are going outside of health care plans such as HMOs and PPOs to consider plans and approaches that are affordable while still providing solid coverage,” Esen said.

• 20% had health plans with grandfathered status in the past but have since dropped the status. Of the organizations that ended their grandfathered status, 19% said it would have cost more to keep the status than to change plans. “When health care reform was new, employers tried to keep their grandfathered status,” Esen said. “But now that they understand the law and its implications, employers want to come out from under that umbrella to make changes, especially if these changes lead to lower costs.”

• More than one-half (53%) said they would not be affected by an excise tax on high-cost benefits that takes effect in 2018 or are taking action to avoid the tax.

The survey polled more than 740 randomly selected HR professionals with a title of manager or above or who work with benefits or compensation. The survey has a margin of error of plus or minus 4 percentage points.

What do these findings mean for the HR Profession according to SHRM? Organizations will continue to see their health care benefits packages as a key recruitment and retention tool. The awareness of the importance of health care benefits to recruitment and retention will encourage many organizations to maintain offerings that go beyond what is required by the law. Most HR professionals report that the ACA changes had no impact on recruitment and retention (54% and 55% respectively) suggesting that other factors most influence their benefits strategies. Meanwhile, one-half (50%) of organizations indicated that their current plan was more robust than what was required by the ACA. More organizations may start considering alternative health care plans. The findings indicated that more organizations were offering alternative health care plans in 2015 (54%) compared with 2013 (37%), and another 13% said they plan to offer them in the future. Many organizations continue to move toward the use of health savings accounts (HSAs). The SHRM 2014 Employee Benefits research report shows that over the past five years there was a 12 percentage point increase in the number of organizations offering HSAs (33% in 2010, 45% in 2014) and a 17 percentage point increase in the prevalence of employer contributions to HSAs (15% in 2010 and 32% in 2014).

Many organizations are changing health care coverage. Between 2014 and 2015 about three out of five organizations (59%) made changes to their health care coverage. As HR professionals, brokers and legal experts become more familiar with the law, a growing number may begin to make strategic modifications to existing health plans to maximize their return on investment.

It is critical that employers understand what counts toward the 30 hours of service threshold that classifies an employee as a full-time employee under the law. Both penalties and lawsuits from the employee may occur if an employer does not count an employee’s hours of service accurately. HR professionals must therefore be vigilant in making sure their organizations are fully in compliance.

Currently, 54% of organizations provide health care eligibility to employees who work 30 hours per week, an increase from 44% in 2014 and 39% in 2013. In addition, 20% provide health care coverage for employees who work fewer than 30 hours.

It is important to have a communication strategy in place to explain health benefits. Organizations will continue to need to communicate effectively with employees, especially those who may not be familiar with benefits offerings and enrollment procedures.

Organizations have already made progress on this front; the biggest change from 2013 is that more organizations have communicated the impact of the ACA to employees (from 32% to 67%) and to retirees (from 7% to 17%).

Resources and education are needed to help HR professionals navigate the complexity of the ACA. HR professionals (41%) indicated that the complexity of the ACA was still the main implementation barrier, unchanged from 2013. Though fewer cited a lack of understanding of the law’s details and its impact on organizations’ resources, information is still needed to help HR professionals understand and comply with the law. These sources of information are likely to continue to be insurance brokers, SHRM’s resources on health care reform and internal or external legal counsel. www.HRProfessionalsMagazine.com

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1 2015 ARSHRM State Council 2 John Register, Mega Session Speaker, spoke on “Hurdling Adversity – The Power of Inspiration.” 3 Sherry L. Johnson, SHRM-SCP, SPHR, CAE, SHRM Southwest Central Regional Director 4 ARSHRM Chapter Presidents Awards 5 Bill Cash with the EEOC spoke on, “The EEOC’s Roadmap to its Enforcement & Litigation Efforts.” 6 Minnie Lenox, HR Director for the City of Hot Springs, presented “YOU are Important, You are Needed and YOU are Necessary.”

7 Kyle Killingsworth spoke on “Making Your Organization’s Leader into a HERO to Drive Employee Loyalty.” 8 Ann Rhoades, President of People Ink, was the Keynote Speaker, and her topic was, “Built on Values.” 9 Kathleen McComber, Assistant Vice Chancellor for HR for the University of Arkansas for Medical Sciences in Little Rock, spoke on “Violence in the Workplace – A Personal Experience.” 10 Tim Orellano, President of The Human Resources Team in Little Rock, with Michael J. Lotito, co-chair of Littler Mendelson’s Workplace Policy Institute. Tim spoke on “Feeding the OFCCP Tiger,” and Michael spoke on “Employers are Drowning in Regulations.”

11 ARSHRM State Council wins SHRM Pinnacle Award.

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SISKIND SUSSER PC Tennessee’s Largest 23

Business & Employment

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12 Creative Concepts facilitated a Live Auction benefiting the SHRM Foundation. The auction raised $3,000. 13 Delta Dental was the presenting sponsor for 2015 ARSHRM HR Conference & Expo in Hot Springs. They have been the presenting sponsor for the past six years! 14 Jason Hudnell, Director of National Park Technology Center, spoke on “MultiGenerational Workplaces.” 15 2015 ARSHRM Conference Committee 16 Michele Burns, MA, SPHR, CCP, CBP, GRP and 2014-2015 ARSHRM State Director, presents Jim Wilkin’s Lifetime Achievement Award to Richard Cooper, Vice President of HR and Corporate Compliance Officer for Arkansas Blue Cross Blue Shield. 17 Allen Dobson presents Steve Schulte, SPHR, SHRM-SCP, J.D., the Russell Gunter Arkansas Legislative Award. 18 Michele Burns presented Beverly Joe, PHR, SHRM-CP, the HR Professional of the Year Award. 19 Hallerin Hilton Hill was the Keynote Speaker on Friday at noon. His topic was, “The Wisdom Advantage.” 20 Donna Merriweather, SPHR, with the ARSHRM State Council presented the $500 grand prize sponsored by Bear State Financial to Ellyn Schleiffarth with Girl Scouts -Diamonds of Arkansas, Oklahoma and Texas.

21 Christy Cobb with DataPath Administration at the ARSHRM Expo.

22 Brad J. Wilson, MSS/HR, SPHR, GPHR, CPLP, Senior Manager of Community Engagement with HRCI. 23 Dale Clinton with the ARSHRM Conference Committee and Rickie Smith with Cross, Gunter, Witherspoon and Gulchus. 24 Calvin Colbert with Challenger, Gray & Christmas, Inc., sponsored the Daily Planet Reception in the Exhibit Hall on Wednesday.

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Ellen Pao - A Case About Gender Discrimination:

A Sign of Trends to Come?

The plaintiff’s case read like a script out of a soap opera: young brilliant venture capitalist groomed for greatness, forced into an affair with a married co-worker, subjected to sexist behavior, and then iced out of important meetings and other opportunities and eventually discarded when she complained about it. The case was deemed by the media as a perfect one to expose the “boys’ club” culture of Silicon Valley.

The truth turned out to be a little more complicated, as indicated by the defense verdict rendered by the jury. Ellen Pao joined the venture capital firm of Kleiner Perkins Caufield & Byers in 2005, beginning as chief of staff to the powerful John Doerr, who mentored her and was one of her biggest advocates. Five years later, she was promoted to junior partner. It was in this role that her career began to falter and she was terminated in October 2012. Who was responsible for this downturn was the main focus of the trial. The stakes were certainly high; Pao was seeking $16 million in back pay and over $100 million in punitive damages.

The Trial Pao was represented by two well-respected plaintiff’s employment lawyers, Therese Lawless of the firm of Lawless & Lawless and Alan Exelrod. Their focus was on what Pao characterized as ingrained sexism among the male partners that systematically excluded women from important networking opportunities and promoted men who received performance reviews with similar language to those of Pao. She described a plane ride in which she had to listen to conversations among male partners about strippers and sexual preferences. She said she was pressured into a relationship in 2007 with Ajit Nazre, another junior partner, who also made advances to another female partner, for which he was eventually fired. She described an all-male ski trip with clients organized by a rival junior partner, Chi-Hua Chien, whom she also claimed said he did not invite women to a dinner with Al Gore because women “kill the buzz.” Chien was promoted to senior partner while Pao was not. Finally, she said in 2007 she was given a book of romantic poems by a married partner who also asked her to dinner when his wife was out of town.

Kleiner Perkins, represented by the legendary management employment lawyer Lynn Hermle of Orrick Herrington & Sutcliffe (she once made an opposing counsel throw up), paraded a barrage of witnesses, many of them female, to talk positively about their experiences at the firm. A number of witnesses, both men and women, described Pao as having “sharp elbows,” and being “prickly” and “competitive” but also “too quiet.” Other witnesses contested Pao’s description of events, including the plane ride, and provided a different perspective on the book of poems and dinner invitation.”

On cross, Hermle was able to paint a picture of Pao as a deeply competitive, somewhat difficult person who frequently clashed with others and who expected to be given opportunities rather than creating them on her own. Pao was taken through all of her increasingly negative performance reviews, including the one in 2011 when senior management wanted to transition her out but John Doerr persuaded them to give her another chance. She kept a “resentment chart” of colleagues she believed had wronged her. It was brought out that she had never proposed any trips or organized any events on her own and had done little to recruit women to the firm. Hermle was able to establish that Pao did not start complaining about sex discrimination until it was clear her job was in jeopardy and that she demanded an “eight-figure” severance package.

Pao’s mentor, John Doerr, was taken through a series of emails that demonstrated how committed he was to advancing Pao’s career even when all of the other senior partners became critical of her performance. Doerr had also pushed to fire Nazri after Pao told him about their affair. The affair was over at this point, and Pao told Doerr that Nazri had lied about being separated from his wife. Doerr wanted him fired but Pao asked that he not be punished. Nazri was not fired but his bonus 24

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By LISA A. KRUPICKA

was docked and Doerr told him that he had lost confidence in his ability to lead the firm. Nazri was eventually fired after he made advances (showed up at her hotel room in a bathrobe) to another female partner, who rebuffed them and immediately complained.

However, the defense was not particularly helped by Chien, who kept swiveling in the witness chair during his testimony and occasionally smirked. Chien said the group organizing the ski trip considered inviting two female entrepreneurs to fill the remaining two seats on the private plane but rejected the idea after considering that “the gals” may not want to share a four-bedroom condo with a bunch of men and suggested they invite 4-8 women next year so they could have their own condo, but there was no ski trip the next year. He said he did invite a female partner to come because she owned a house nearby, although she declined. Chien said the number of attendees at the Gore dinner was dictated by the size of Gore’s dining room, which seated ten. He denied making the “kill the buzz” comment. Pao’s lawyers pointed out that Chien was promoted even though he also was characterized as having “sharp elbows” and being “highly aggressive.”

In the end, after 24 days of trial, the jury was not convinced. They found in favor of Kleiner Perkins on all counts: discriminatory failure to promote; retaliatory failure to promote; and retaliatory termination.

What We Learned There is no doubt that Silicon Valley continues to be male-dominated and that some men’s attitudes towards women are sexist. But this case was not a particularly good example of sex discrimination in Silicon Valley, as the jury determined.

Pao had a consensual affair with a co-worker, was strongly championed by a male senior partner, and was a highly competitive employee who made a lot of enemies and in the end could not perform in such a “dog-eat-dog” environment. She cried discrimination only as a bargaining chip in a high-stakes gamble that she lost.

Kleiner Perkins’ Mistakes Nevertheless, details that came out in the trial were not flattering to Kleiner Perkins, which ironically has the highest percentage of women partners (20%) of any venture capital firm. The promotional process for highly-skilled professionals often must be somewhat subjective by nature, but even subjective decisions can be supported if they are accompanied by specific examples rather than generalizations. A predominantly male work force should be exposed to diversity training on a regular basis and more emphasis should be placed on “no tolerance” for discrimination or harassment in any form (Kleiner kept its discrimination/ harassment policy in a drawer).

Beginning of a Trend?

Moreover, the Pao case is not and will not be the last case of sex discrimination brought against male-dominated Silicon Valley firms. In a suit recently filed against Twitter by a former engineer, Tina Huang claims that the process for promotion is not clear and is biased in favor of men. She seeks class action status.

In another recent suit, former manager Chia Hong has sued Facebook claiming that she was discriminated against, harassed and retaliated against on account of her gender and race. Perhaps all this increased scrutiny will help usher in a cultural shift. One can only hope.

Lisa A. Krupicka, Attorney Burch Porter & Johnson PLLC lkrupicka@bpjlaw.com www.bpjlaw.com

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10 Tips

to Fight Gender

Discrimination

Sheryl Sandberg got people talking about gender equality at work with her bestseller, Lean In: Women, Work, and the Will to Lead (Knopf, 2013)—but why should women have to do all the leaning?

Every organization—and that means the men and women who run companies— must do more to ensure that women have an equal opportunity to lead.

Yes, we have come a long way since 1964, when gender discrimination became unlawful, but we still have a long way to go.

Below I offer 10 ways organizations can increase gender equality from the top down.

1. Get Women on Boards Greater representation of women on boards of directors is critical. Boards with at least one woman are likely to crush the competition, according to a Business Insider article. Diversity matters!

Having women on boards can also call attention to the elephant in the room at many companies—that there is a boys’ club at the top or at least in certain silos.

Power makes it easier to speak up, regardless of gender.

In addition, the presence of women on the board sends a powerful message to executive women and customers that the company “gets it.”

Finally, Title VII of the Civil Rights Act of 1964 and most state laws do not apply to board positions, where there is no employment status. Therefore, employers can do what they generally cannot do for senior leadership positions—that is, take gender into consideration when filling board positions or even reserve a board position for a woman.

2. Educate Senior Leadership Both the board of directors and the senior leadership team must understand the legal issues associated with gender discrimination (see sidebar).

Training should also emphasize the business benefits of gender equality, including the talent imperative, connection with and access to customers, diversity of ideas, and supplier diversity. Where there is gender diversity among senior leadership, companies outperform their competitors.

3. Hire and Promote To increase gender (and other) diversity of the applicant pool, work to: • Ensure that the minimum job requirements are not so high that they exclude women simply because this group has been denied opportunities in leadership until relatively recently. This does not mean lowering standards but rather assessing them more realistically.

• Increase the diversity of the applicant pool through general and targeted recruiting. Word-of-mouth is not enough.

• Distribute applications to hiring managers without names. Consciously protect yourself from your unconscious bias, which brings us to …

4. Fight Biases

By Jonathan A. Segal Esq., SPHR, SHRM-SCP

Jonathan A. Segal is a contributing editor of HR Magazine and a partner at Duane Morris LLP in Philadelphia.

Follow him on Twitter @Jonathan_HR_law.

Reprinted with permission from SHRM 26

www.HRProfessionalsMagazine.com

The use of diverse hiring teams that have received appropriate training should help to ensure that neither conscious nor unconscious gender bias plays a part in decision-making. Particular attention should be paid to avoiding: • “Like-me” bias, or hiring managers’ preference for candidates who resemble them. Note that hiring based on whether someone would be a “good fit” can mask unlawful “like-me” bias.

• Double standards. What’s considered commendably assertive in a man should not be considered unacceptably aggressive in a woman.

• Gender stereotyping. Guard against impermissible assumptions about women who have or are perceived likely to have children.

• Discrimination against men. Employers can focus on differences in experiences, perspectives, contacts and styles. However, absent a remedial purpose, narrowly defined, employers generally cannot consider gender in hiring decisions, even when the goal is laudably to increase diversity.

5. Evaluate Work Assignments Critically evaluate your organization’s work assignment systems to ensure that the work is being distributed fairly and equitably and not based on personal relationships.

The importance of the assignment process cannot be overemphasized. It often determines who has the experience and the connections to rise to the top based on merit. Plum assignments: • Increase necessary experience.

• Be more receptive to telecommuting, at least sometimes for some positions. Yes, on that work-athome day, personal and work responsibilities may rotate as the focus. But that may be necessary given the long hours every other day.

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Employment Law and Legislative Conference

• Consider offering support for child care and elder care.

9. Evaluate the Evaluators In my experience, the evaluation process often benefits men as a result of unconscious bias. We need to evaluate the evaluators!

Again, look for “like-me” bias: “He does things the way I do things, so his method is better than others.”

• Help forge customer/client relationships and the personal return on investment that goes with it.

Also look for weak praise (“nice” rather than “strong client relations skills”), code words (“lack of commitment” for women who are juggling work and family commitments), and double standards and criticisms that focus on the woman as opposed to her performance.

6. Show Them the Money

10. Include Men

We have a gender gap when it comes to pay. It is shrinking, but it is still there.

Sandberg states that there is not enough male talent to serve an organization’s leadership needs. Conversely, we cannot solve the issue of gender bias by having only women focus on it. Men have valuable input, too, that must be considered.

• Grant exposure to the senior leadership team and sometimes the board.

There are fair questions about whether the gap is solely due to gender. Taking time off to raise a family, whether you are male or female, may play a role.

Let’s assume the gap is 10 percent. (I believe it is higher.) How many men would say “no big deal” to a 10 percent reduction in salary? I know I wouldn’t.

Gender gaps in compensation not only can be attacked in litigation but also can result in less engagement by talented women. So assess and correct areas where gaps cannot credibly be explained; consider conducting the analysis initially under privilege so that plaintiffs’ lawyers cannot take advantage of your good efforts.

Further, it is unfair to place the burden on women only. Women in senior management positions who are asked to focus heavily on women’s initiatives may not have the time they need to focus on their customers.

Of course, to get men involved we must do more than enlighten and invite them. We must support them, too.

7. Practice Social Inclusion Social inclusion is a big part of business inclusion. In fact, I bristle at the term “social inclusion” because I think it diminishes its importance.

Everyone should make a conscious effort to ensure that social inclusion is, well, inclusive.

For example, there are women who drink and men who don’t. But if the focal point of social inclusion is the local bar after work, more women than men may be excluded either because of caregiver responsibilities or because they want to avoid what they fear they may see.

Also remember that social media is a form of social inclusion and, therefore, business inclusion. Think of the message that is sent if a leader invites his male reports, but not his female reports, to connect with him on LinkedIn.

8. Help with Work/Life Management Helping employees with the management of work and personal responsibilities is particularly important to those who are primary caregivers, whether they are involved in elder care, child care or both. While more men are (thankfully) leaning in at home, women still are more likely to have heavier burdens in this area.

To help employees manage work and personal commitments:

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Employment Law and Legislative Conference

FLSA Overtime Exemption Regulations:

Changes Delayed, But Expected This Spring

By Tammy McCutchen

In

Tammy McCutchen is a Principle in the Washington D.C. office of Littler Mendelson, and served as Administrator of DOL’s Wage & Hour Division from 2001 to 2004.

In March 2014, President Obama, declaring that “Americans have spent too long working more and getting less in return,” ordered the U.S. Department of Labor to revise the “white collar” overtime exemption regulations, with a goal of making millions more workers eligible for extra pay when they work more than 40 hours a week. New York Times, March 13, 2014.

This announcement came as a bit of a surprise to DOL watchers – previously in the Obama Administration, the focus of DOL’s Wage and Hour Division had been the misclassification of employees as independent contractors. DOL’s budget requests sought additional funds for an independent contractor misclassification enforcement initiative, and the primary regulatory focus for the Wage and Hour Division was proposing the “Right to Know” regulations which would require employers to provide notice to workers of their status as an employee or independent contractor. Revisions to the FLSA regulations had not been listed on DOL’s regulatory agenda, which is published twice yearly to put the regulated community on notice of the regulations that DOL is working on.

President Obama’s announcement came on the eve of the 10th anniversary of the revisions to the overtime regulations published on April 23, 2004.

The speculation, the predictions began immediately: When will the changes go into effect? What changes will DOL make? How will the changes impact my company?

When will the changes go into effect?

Initially, DOL’s semi-annual regulatory agenda stated that the proposed regulations would be published in November 2014. But, in October 2014, the Solicitor of Labor stated that the proposal “remained months away and that she hoped to see it rolled out early in the New Year.” Law360, October 2, 2014.

DOL’s next regulatory agenda moved the expected date of the proposed regulations to February 2015. Of course, now, February has come and gone.

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Thirteen months later, we are still waiting for the shoe to drop but, do not doubt, drop it will: Just last month, President Obama stated that “his administration would soon release details of a highly anticipated reform to the nation's overtime rules.” Huffington Post, March 21, 2015. That same week, Secretary of Labor Perez testified before the House Education & the Workforce Committee that the proposed revisions would be released sometime this spring.

Publication in the Federal Register of the proposed revisions – called a Notice of Proposed Rulemaking (NPRM) – is just the first step in a regulatory process that can take a year or more. Next, DOL must give the public an opportunity to submit comments on the proposed regulations. Finally, DOL must prepare a “preamble” responding to the public comments which is published in the Federal Register, along with an economic cost-benefit analysis and the Final Rule.

When DOL last revised these overtime regulations during the Bush Administration, DOL published the proposed regulations on March 31, 2003, and received more than 75,000 comments during a 90-day comment period. The Final Rule was published on April 23, 2004 with an effective date four months later on August 23, 2004.

If the Obama Administration publishes the proposed regulations by June of this year, and proceeds with equal speed as the Bush Administration, we can expect the revised overtime regulations to be final

by July 2016, with an effective four months later in November 2016.

What changes will DOL make?

There can also be no doubt that the DOL’s proposal will seek to narrow the overtime exemptions in an effort to ensure millions of additional employees become eligible for overtime pay. The easiest way to achieve this goal is to increase the minimum salary levels that employees must earn to qualify as an exempt executive, adminis-

trative, professional or computer employee (there are no salary requirements for outside sales employees). Today, the minimum salary level for exemption is $455 per week ($23.660 annually) – increased in 2004 from the $155 per week set in 1975. It is a certainty that DOL will raise the salary level. Until stalling in 1975, DOL has raised the salary threshold for exemption every five to ten years. As the $455 level was set over a decade ago, an increase is appropriate. But, rumor and speculation suggests that DOL could raise the minimum salary as high as $1,000 per week ($52,000 annually), which is well above the minimums required for exemption under New York ($656) and California ($720) law. However, in January, thirty House Democrats signed a letter to President Obama suggesting a salary threshold of $69,000.

DOL is also expected to seek significant changes to the duties requirements for exemption. Both President Obama and Secretary Perez seem most focused on narrowing the exemption for managers in the retail and restaurant industries. President Obama told the Huffington Post: “What we’ve seen is, increasingly, companies skirting basic overtime laws, calling somebody a manager when they’re stocking groceries and getting paid $30,000 a year. Those folks are being cheated.” During his testimony in the House, Secretary Perez states: “The assistant manager at a fast food restaurant who puts in 60-70 hours a week for $455 and spends almost all of their time performing the same work as the employees they supervise and who does not get overtime is getting a raw deal. We are updating the rule to prevent this situation.”

Based on “listening sessions” that Secretary Perez has held with SHRM and other business groups, DOL seems to be considering two changes that would narrow the exemption for retail and restaurant managers. First, DOL could revise the definition of “primary duty” at 29 C.F.R. § 541.700.

To qualify for an exemption, employees must have a “primary duty” of performing exempt work. Historically and currently, “primary duty” refers to an employee’s “principal, main, major or most important duty.” An employee’s primary duty is based on all the facts, “with the major emphasis on the character of the job as a whole.” The amount of time an employee spends performing exempt work is an important factor – employees who spend more than 50% of their time performing exempt work meet the primary duty test. However, under the FLSA, employees who spend less than 50 percent of their time performing exempt work may still qualify for exemption. DOL could propose to change this long-standing qualitative test, to a California-style quantitative test: an employee who spends less than 50% of her time performing exempt work can never qualify for exemption.

Second, under the executive exemption, DOL may eliminate the concept of “concurrent” duties at 29 C.F.R. §5 41.106. The concurrent duties section recognizes the reality that an employee can perform both exempt and non-exempt work at the same time: “Concurrent performance of exempt and non-exempt work does not disqualify an employee from the executive exemption ….” An assistant manager can supervise employees and serve customers at the same time or simultaneously direct the work of other employees while stocking shelves. This section states the key distinction between an exempt manager and the employees she supervised: “Generally, exempt executives make the decision regarding when to perform nonexempt work.” which, in addition to a primary duty of making sales, only requires an employee to work away from the employer’s places of business “customarily and regularly.” 29 C.F.R. § 541.500. “Customarily and regularly is defined at 29 C.F.R. § 541.701 as “a frequency that must be greater than occasional but which, of course, may be less than constant” and includes work “normally and recurrently performed every workweek” as opposed

to “isolated or one-time tasks.” California, in contrast, requires exempt outside sales employees to work away from the employer’s places of business more than 50% of the time. Adopting the California rule for the FLSA would significantly narrow the exemption.

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Employment Law and Legislative Conference

Potential revisions to the administrative, professional and computer exemptions are more difficult to predict – and for DOL to make. However, we are likely to see new examples of the types of jobs which do not qualify for each of these exemptions. Under the administrative exemption, for example, the current sections on insurance claims adjusters and employees in the financial services industry, 29 C.F.R. § 541.203(a) & (b), are likely to be replaced or supplemented by a section stating that mortgage loan officers do not qualify for exemption consistent with Administrator Interpretation Letter FLSA2010-1, recently validated by the U.S. Supreme Court in Perez v. Mortgage Bankers Association.

Who will be impacted?

DOL’s revisions to the overtime exemption regulations will impact almost every workplace in the country, although retail and restaurant businesses may feel the most pain with financial services a close second. When DOL publishes its final regulations, we all will have much work to do – reevaluating most of the employees currently classified as exempt to determine if they will continue to qualify for exemption under the new rules. But, there is also much to do in the meantime. Get involved after DOL publishes the proposed revisions: analyze the cost of the salary increase to your business; respond to any surveys that SHRM may conduct; submit comments to the proposed regulations; write to your Congressional representatives. DOL’s revisions are not likely to benefit employers, and DOL may ignore our concerns – but we should still voice those concerns in every way possible.

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Employment Law and Legislative Conference

Three Reasons

Why Investigators Should Not Discount Hearsay Evidence

By Allison West

Esq., SPHR, SHRM-SCP Employment Practices Specialists awest@employmentpractices.net www.employmentpractices.net

Y

You are investigating a complaint of harassment. You meet with witness Wally and he tells you the following: Karen told me her boss Bill gave her a neck rub and gives her daily compliments about her clothing while giving her “elevator eyes. I think Susan may know more about what happened.”

Many investigators would dutifully write down what Wally said and then likely disregard or discount the evidence, labeling it “hearsay.” Is this the right decision? The answer is found in understanding the role of a workplace investigator.

What is Hearsay?

Hearsay can be a verbal or written statement, or something non-verbal such as gestures or pictures. Legally, hearsay means: “an out of court statement offered to prove the truth of the matter asserted.” The premise behind the definition is that evidence presented in court must be reliable and subject to cross-examination. Hearsay evidence cannot be used in court unless it falls under one of the many exceptions (under Federal law there are nearly 30 exceptions.) Trial attorneys spend a good deal of time arguing about the hearsay nature of various evidence as ways to advocate and defend their clients.

How does hearsay impact workplace investigators? Should they discount hearsay evidence when deciding whether misconduct occurred? As for the “lay” definition, according to the Merriam-Webster’s dictionary, hearsay is “something heard from another person: something that you have been told.” The prolonged myth is that any hearsay statement or evidence is inherently unreliable because someone did not learn the information first-hand. However, each day we are first-hand witnesses to a variety of actions or words and yet, our memories consistently fail us when we are asked to recount a situation, conversation, etc. Think of when you walked into your office this morning, acknowledged the receptionist and then headed to the kitchen for your morning coffee. What color was the receptionist’s shirt?

Eyes? Pants? You were certainly a first-hand witness. However, you may not remember those details because you were not focused on the receptionist or, even more significant, those details were not important at the time. First-hand witnesses are simply witnesses who were present at a particular place and time. There are no guarantees the information they provide is necessarily more or less reliable than someone who heard something second-hand.

The 3 Reasons First, hearsay evidence is not always unreliable.

Our job as investigators is to ask questions, probe, then probe some more. We are charged with putting the pieces of a puzzle together so we can, hopefully, see the picture of what happened regarding the complainant’s allegations and his or her version of the facts. Or, if no complaint was made, to figure out each witness’s version of the facts and reach a conclusion as to whether misconduct occurred, a policy was violated or whatever the scope of the investigation directed the investigator to investigate.

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In the example above, if the investigator determines Wally is a credible witness, they can surmise something may have happened to Karen by her boss Bill despite the fact that Wally did not witness anything first-hand. For example, even if someone was in the room when Karen’s boss Bill gave her the neck rub, this does not mean they saw Karen’s reaction or heard any comments made by Bill. On the other hand, if Wally is a good friend of Karen, he might notice the cadence of her speech when she relayed her story, or picked up on more details and nuances because of their friendship. He could also provide insights into her credibility, his concern and possibly his anger at what his friend had experienced.

Of course, the investigator would also need to assess Wally’s credibility and determine whether his version of the facts are inherently plausible or if he had a motive to lie or exaggerate about the incident. For example, is there any “history” or grudge between Wally and Bill that would affect his credibility?

Does Bill supervise Wally? Does Bill make decisions regarding Wally’s job performance evaluations or possible promotions? Has Wally been turned down for a promotion based on Bill’s recommendation?

Whether Wally is correct or accurate regarding the facts during the interview is immaterial; he has provided information for the investigator to continue on the investigation journey to figure out what happened. At this point in the investigation, excluding Wally’s testimony because of hearsay would be premature.

Second, hearsay statements or evidence can lead investigators to relevant evidence.

Investigators must be greedy and accepting of information in whatever form and from whomever is willing to share. Whether information is hearsay is irrelevant when it comes to gathering the information. Too often, investigators (and management) make decisions based on whether the information obtained was accurate or witnessed first-hand. Simply because Wally did not witness what happened does not mean nothing happened to Karen. Wally mentioned someone named Susan who might have additional information and he might also provide a time-line of Karen’s activities after the incident and other facts.

His information could lead to additional facts that might substantiate Karen’s harassment allegations or provide clarity in other areas. Remember, the investigator is not the “judge” or ultimate decision maker. The task of the investigator is to fact-find, reach conclusions and report his or her findings.

The key determination is whether the information is relevant. Relevant evidence is what we are searching for in our quest to figure out what happened. Relevant evidence will often lead us to other relevant evidence or help us to determine that something is in fact, irrelevant. Whether the information is accurate is determined during the course of the investigation and significantly, when making findings and determinations about the veracity and credibility of the witness and his or her testimony.

Additionally, hearsay evidence can also be corroborative. If several witnesses recount the same story it can mean each witness heard a similar account, which can assist in determining relevancy, accuracy and credibility. Conversely, the possibility exists the witnesses may be fabricating their story or have their own agenda regarding the facts and outcome of the investigation. Probing into motive will assist the investigator to determine if these similar recollections are tainted.

Third, ignoring hearsay evidence puts the investigator’s credibility at risk.

At the end of the investigation, an investigator must be able to justify decisions made along the way regarding investigation strategy, witnesses interviewed, evidence gathered and ultimately the investigation findings. Ignoring evidence before determining its accuracy and relevance, or, the credibility of the witness, can show bias of the investigator. Once bias is detected, the entire investigation becomes suspect. If the investigator above discounted Wally’s testimony before making further inquiries because the testimony was hearsay, a wealth of information may not have been obtained, corroboration might have been overlooked or other evidence might be missed.

Bottom line, investigators should conduct a thorough investigation. This means evaluating all evidence, following relevant leads and making credibility determinations at the end of the investigation and most importantly, know that hearsay might well provide or lead to relevant information.

To learn more about staying up-to-date on investigation techniques, laws and the please visit the Association of Workplace Investigators at www.aowi.org.

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Employment Law and Legislative Conference

Flexing for

Work-Life Integration

By Christine V. Walters

JD, MAS, SHRM-SCP, SPHR Independent Consultant FiveL Company www.FiveL.net

W

We hear a lot about workplace flexibility and work-life balance. But what are they really? Do they really work and, if so how? I had the honor of presenting to an audience of nearly 300 attendees on this topic at SHRM's recent Employment Law & Legislative conference. The dialogue, interest, and Q & A were so engaging for me that it seemed a good time to share some of the information to an even broader audience.

First, let’s get the legal issues out of the way. Employers’ flexibility does have constraints related to compliance under a variety of laws. Just a few federal laws that impact Workplace Flexibility (workflex) options include: • Americans with Disabilities Act (ADA) – Covered employers must not discriminate against and must provide reasonable accommodation for qualified individuals with disabilities.

• Fair Labor Standards Act (FLSA) – Non-exempt employees must be paid for all hours worked; exempt employees must be paid for certain partial or full day absences; and other rules impact how work schedules and paid leave programs can be structured.

• Family and Medical Leave Act (FMLA) – This leave may run concurrent with paid leave programs. Covered employers should ensure that their policy includes all the regulatory requirements and is not so broad as to create commitments to which they are not otherwise required to provide.

• Uniformed Services Employment and Reemployment Rights Act (USERRA) – Most employers are covered under this law and requires not only time off from work for covered service in the Uniformed Services but escalated reinstatement rights.

• State and Local Laws – Employers need to ensure they comply with not only the myriad federal requirements but state and local laws and regulations that may also impact the development and implementation of workflex programs, practices and policies.

Integration versus Balance: What do you picture or see when you hear the word balance? A scale? A seesaw? The implication might be that the activities we are trying to balance are mutually exclusive and have an inverse relationship; as one increases the other decreases. But that's not how this works, is it? We stand in the shoes of a parent, spouse, significant other, son or daughter, student, reservist and so many other roles simultaneous to the one(s) we have at work. With that in mind we'll refer to this struggle as work-life integration rather than balance.

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What is it? It depends upon whom you ask. I dare say it is, can be and should be whatever works best for your business operations and your employees. That implies it may look differently from one employee to another. For one it might be flex time; for another flex place; for another an alternate work schedule (AWS) including reduced, modified or a compressed work week schedule. There are myriad models in the marketplace so you need to compare, contrast and choose one or more that will work well for your business operations as well as your employees’ needs.

Just a few examples of AWS for example could be a full-time, weekly work schedule of 4 10-hour days or 4/9/8, in which an employee works four 9-hour days each week and one 8-hour day on alternate weeks. When Work Works has some great resources, publications and case studies that showcase what some employers, large and small have done to enhance WorkLife integration for their employees.

Why offer it #1? Let's face it. We have to run our business successfully and with an eye to sound fiscal policy. If we don't then flexibility will be the last thing on our mind, replaced with struggle to stay competitive if not afloat. The data is still fairly new and coming out but it does show measurable, positive results related to recruitment, retention and employee engagement. Reducing recruitment time, increasing retention rates and employee engagement have all been tied to positive fiscal outcomes.

Why offer it #2? Do existing, new and pending laws and regulations frustrate you from time to time? I have had the honor on four occasions over the last two months to testify or just chat with elected officials, federal and state about employer mandates. Of all the posturing, defenses, objections and (well you get the idea) I find the simplest, most compelling and sincere explanation as to why employers don't need (paid) leave mandates is because the vast majority are already doing great things for their employees. And if we would spend 1/10th of the time talking about our proactive practices as we do the "bad actors" then we might find common ground and paths to best serve the needs of ALL employees for EACH employer that is best suited to their mutual and respective needs.

How? This may be the most difficult question to answer. Carefully! The best of intentions may go awry. Legal compliance can be challenging from a variety of perspectives: ADA, FLSA, FMLA, Title VII and nearly the entire gamut of HR alphabet soup. Sure, WorkFlex programs may be fraught with peril but the rewards can be so compelling they far exceed the risk and may be well worth the gain. Gains are in trust, gratitude and loyalty from your employees. Just ask them. I hear powerful stories from employees who are grateful for the flexibility provided by their employer so they could meet the demands that life throws their way from time to time.

Where do I begin? There is no need to reinvent the wheel. Here are some free resources to help you get started and/or assess where you are.

• When Work Works offers a free on-line assessment that provides a WorkFlex score that compares you to employers across the nation.

• The Families and Work Institute (FWI) has lots of resources for employers including videos, research, expert commentary and blog postings.

• The above both partner with SHRM, which also dedicates an entire section of its website to resources for employers including a Workplace Flexibility toolkit, webcasts, related publications and more.

Next Steps? Do you think you have some great workflex programs?

Mark your calendar for August 17, 2015 when the application process for the When Work Works awards will open!

REGISTER NOW for our

2015 LABOR & EMPLOYMENT LAW UPDATE CONFERENCE

In Knoxville, Tennessee, on November 5 - 6, 2015

Accreditations:

• HCRI recertification credit hours for PHR, SPHR and GPHR will be requested • Attorney CLE credit hours for TN, GA, VA and KY will be requested

Comments from last year:

“Great selections and topics”…

“Very thorough — can’t think of anything you missed!”…

“Always fun and informative”…

“It’s my favorite of all seminars — great job!”

For more information or to register:

Please contact Laura Reeves at: (865) 546-1000, or visit us online at: www.WimberlyLawson.com

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

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

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