November 2015 issue by Cynthia Thompson

Volume 5 : Issue 11 TM

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Employee Benefits and Planning Compliance SPECIAL ISSUE

Best Practices for Choosing a Plan Advisor

How the 2016

Elections

Communicating

Will Impact Employers

Employee Benefits

Theresa J. Allen Highlights of 2015

Certified PPACA Professional

Regions Insurance, Inc.

TNSHRM

Conference Highlights of 2015

KYSHRM

Conference

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.

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ORLANDO PHILADELPHIA PHOENIX PORTLAND SAN ANTONIO SAN DIEGO SAN FRANCISCO

SEATTLE TAMPA WASHINGTON, D.C.

Bringing Human Resources & Management Expertise to You

87% of general election voters support a federal minimum wage increase

www.HRProfessionalsMagazine.com Editor

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

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

Park Avenue Design Contributing Writers

Theresa J. Allen Bruce E. Buchanan Harvey Deutschendorf Jennifer Hagerman Trish Holliday Jennifer Kiesewetter Linda Lauer Heather Lavoie Gabe McGaha Greg Northen Brad Owens Charles Sims, Jr. Clifford Stephen Board of Advisors

Austin Baker Jonathan C. Hancock Ross Harris Diane M. Heyman, SPHR John E. Megley III, PhD Terri Murphy Susan Nieman Robert Pipkin Ed Rains Michael R. Ryan, PhD Contact HR Professionals Magazine: To submit a letter to the editor, suggest an idea for an article, notify us of a special event, promotion, announcement, new product or service, or obtain information on becoming a contributor, visit our website at www.hrprofessionalsmagazine. com. We do not accept unsolicited manuscripts or articles. All manuscripts and photos must be submitted by email to Cynthia@hrprosmagazine.com. Editorial content does not necessarily reflect the opinions of the publisher, nor can the publisher be held responsible for errors. HR Professionals Magazine is published every month, 12 times a year by the Thompson HR Firm, LLC. Reproduction of any photographs, articles, artwork or copy prepared by the magazine or the contributors is strictly prohibited without prior written permission of the Publisher. All information is deemed to be reliable, but not guaranteed to be accurate, and subject to change without notice. HR Professionals Magazine, its contributors or advertisers within are not responsible for misinformation, misprints, omissions or typographical errors. ©2011 The Thompson HR Firm, LLC | This publication is pledged to the spirit and letter of Equal Opportunity Law. The following is general educational information only. It is not legal advice. You need to consult with legal counsel regarding all employment law matters. This information is subject to change without notice.

Features

4 note from the editor 5 Profile: Theresa J. Allen, Certified PPACA Professional 9 I’m More Than Implement Policy 12 Small Banks Tap Independent Advisors to Drive Growth 23 Rhonda Benton Receives Certification 34 Meet Amy Dufrane, CEO of the Human Resources Certification Institute 38 Reinventing HR: Educate. Motivate. Inspire 44 7 Toxic Types to Stay Clear of at Work 46 How to Succeed in HR Without Really Trying

WEB EXCLUSIVES HTTP://HRProfessionalsMagazine.com /Exclusive

Next Issue

Benefits

Compensation and 14 Communicating Employee Benefits Performance Management – 18 The Deadline for ACA Reporting Requirements Deadline to submit articles is Looming and ads is November 10 22 Best Practices for Selecting a Plan Advisor 24 Ergonomics . . .Because Your Mother Said So? 26 2015 SHRM Benefits Survey 40 Simplified Analytics: Easing the Employer’s Cost, Quality Burden in Healthcare 42 Audit Quality Study Signals Changes Ahead for Employee Benefit Plans

Employment Law 10 30 32 36

Impact of Election 2016 on Employers New DOL Rule Limits Status for Home Healthcare Workers Wage and Hour Issues Continue for Hospitality Industry H1-B Violations Costly to Healthcare Company

Industry News

6 Highlights of 2015 KYSHRM Conference in Louisville 8 Preview of 2016 TNSHRM Conference in Memphis 16 Highlights of 2015 ARSHRM ELLA Conference 20 Highlights of 2015 TNSHRM Conference in Chattanooga 27 Littler Memphis Seminar – Update on Workforce Development Resources and DOL’s New Interpretation of Independent Contractors December 10 28 Highlights from HRO Partners Seminar on Sweeping Overtime Rule Changes 33 Preview of WTSHRM Fall Employment Law Conference in Jackson 35 Preview of MBA | SHRM-Memphis Seminar December 4 41 Highlights of the 2015 MSBGH Healthcare Summit in Clinton 45 Preview of AWA Seminar December 17 in Memphis www.HRProfessionalsMagazine.com

a note from the Editor

This month we are focusing on employee benefits planning and compliance. You will find plenty of information in this issue to help you prepare for your 2016 Open Enrollment and Retirement Planning. We know you will enjoy reading about the Mississippi Business Group on Health 6th Annual Healthcare Summit held at Mississippi College in Clinton on October 13. This was a very educational meeting that included many of the CEOs of the major hospitals in Mississippi. Gregg Harper, U.S. Representative for Mississippi’s 3rd Congressional District, was the keynote luncheon speaker.

Valerie Gifford, Director of TNSHRM State Council; Cynthia; Trish Holliday, Chief Learning Officer for the Tennessee Department of Human Resources, at the TNSHRM Conference in Chattanooga.

October was an action-packed month with lots of conferences and seminars to attend. We kicked off the month with the 23rd Annual TNSHRM Conference in Chattanooga October 7-9. Highlights of the Conference are on Page 20-21. Be sure to catch the highlights of the 31st Annual KYSHRM Conference in Louisville on September 23-25 also on Page 6-7. And don’t miss the highlights of the 14th Annual ARSHRM Employment Law and Legislative Conference in Little Rock on page 16. It was great seeing Mike Aitken, SHRM VP Government Affairs; and meeting Arkansas Lt. Governor Tim Griffin who spoke on Workforce and Economic Development in Arkansas. It was an honor to be a panelist at the HRO Partners breakfast meeting on “Sweeping Overtime Rule Changes” on September 30th at the Great Hall and Conference Center in Germantown. Jonathan Hancock, Shareholder with Baker Donelson, was the keynote speaker. Other panelists included Whitney Harmon, Shareholder with Baker Donelson; and Mario Musarra, Compensation Manager with TruGreen. See the pictorial highlights on Page 28.

We look forward to seeing our WTSHRM friends in Jackson for the WTSHRM 6th Annual HR & Employment Law Fall Conference co-sponsored by our friends at Rainey Kizer. It will be at the Union University Carl Grant Event Center on November 3. We will be in Knoxville on November 5-6 for the 36th Annual Labor Relations & Employment Law Update Conference sponsored by our friends at Wimberly Lawson Wright Daves & Jones Law Firm. You can earn 8.5 HRCI recertification credits! We will bring you highlights in our December issue. Attention ARSHRM! The NOARK Human Resources Association will present SuperCon2015 on Thursday, November 12, at the Jones Center in Springdale. You will earn 6.75 SHRM PDCs and HRCI credit is pending. Register for this excellent event at www.noark.org. On November 20, CAHRA will present a seminar about hot topics impacting benefit plans and how to avoid regulatory noncompliance. It will be held at the Capital Hotel in Little Rock. Visit www.cahra.net to register. Don’t forget to Like our Facebook page and follow me on Twitter @ cythomps for up to the minute coverage of these exciting events. Remember to mark your calendar and join us on November 24 for our monthly complimentary virtual event sponsored by Data Facts. You always earn SHRM PDC and HRCI credits. If you are not receiving our invitation, please send me an email at cynthia@hrprosmagazine.com and we will add you to our distribution list.

Happy Thanksgiving!

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

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Theresa on the cover

J. ALLEN

THERESA J. ALLEN Certified PPACA Professional Regions Insurance, Inc.

Theresa J. Allen is a member of the Regions Insurance Client Resource Team that includes four senior-level HR and law-trained professionals. Theresa partners with clients providing insight into the complex area of human resources. She is also a certified PPACA professional and consults with clients on all aspects of health care reform. With a keen eye for detail, Theresa also serves as the Client Resource Team coordinator managing the intricate aspects of planning and scheduling the

Theresa has been involved in

team members for client presentations throughout the footprint of Regions.

human resources, especially

Four years ago, Theresa discovered a need for her clients in the employee benefits division of

temporary staffing, for a number

Regions Insurance’s Ridgeland, Mississippi office. An athlete all her life and with a passion for

of years and is a member of

fitness, she realized there was a lack of knowledge and direction when it came to employee health

SHRM and the local SHRM

and wellness. With no one else leading the charge, Theresa, an avid golfer and runner, began

chapter, CAHRA. She earned a

weaving the subject of wellness into her conversations with clients at every opportunity.

bachelor’s degree in marketing from Southeastern Louisiana University in Hammond, LA.

Theresa works closely with clients to develop a positive culture through wellness initiatives. Her involvement with clients can range from providing wellness promotional materials for their annual wellness fairs, giving in-person presentations on the importance of annual health exams, and working as liaison between insurance carriers and clients. Theresa began a grass roots program four years ago after she offered to assist a client with the planning and organization of their company onsite flu shot clinics at their nine office locations. The clinics were a great success. Theresa recognized this as a valuable service and approached other clients about the idea of onsite flu clinics. The interest was overwhelming and the program has morphed into a phenomenal annual project. In just four years, it has grown from the initial nine onsite clinics to nearly fifty clinics for the 2015 flu season encompassing the states of Mississippi, Louisiana, Alabama, and Arkansas. Theresa lives on the golf course, no surprise, in Brandon, MS with her husband, Bob. 

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HIGHLIGHTS

2015 KYSHRM State Council Members

2 Susan Simmons, Director of KYSHRM, welcomes everyone to the 31st Annual KYSHRM Conference in Louisville. PRE-CONFERENCE WORKSHOPS 3 DIY â&#x20AC;&#x201C; Workforce Planning: You Can Do This Presenter: Susan Harmansky with Resources Global Professionals 4 Talent Management: Acquisition, Development, Retention and Performance Management Presenter: Carrie Van Daele, CEO/President, Van Daele & Associates CONCURRENT SESSIONS 5 Coaching in Key Relationships Presenter: Bonnie Cox, Power Training Institute

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6 Robert D. Hudson spoke on his book, The HR Lawyer Within You. 7 Cathy Fyock and Lyle Sussman, co-authors, were keynote speakers on Wednesday afternoon. Their presentation was based on their recent book, Hallelujah! An Anthem for Purposeful Work. 8 400 KYSHRM attendees boarded The Louisville Belle for the Opening Night Reception. 9 Shelly Trent, SHRM Field Services Director, spoke at the opening general session on Thursday. Shelly also presented two concurrent workshops.

10 Demetrius Holloway with Stites & Harbison provided an FMLA update on Wednesday. 11 Lynn Ingmire, KYSHRM Directior-Elect, led a concurrent session on Friday, “Is the Road to Court Paved with Good Intentions.” 12 Perry Sholes, Co-Chair of 2015 KYSHRM Conference. 13 Lyle Hanna and his team presented, “Best Practices for High Impact HR,” on Thursday.

14 Meagan and Larry Johnson, a Gen-Xer daughter and Baby Boomer Dad provided the keynote session Thursday on “Boomers, Gen-Xers, Millenials and Linksters.” 15 Kathy Dempsey was the keynote speaker for the closing general session on Friday. Her presentation was titled, “Shed or You’re Dead: Seven Strategies Every HR Professionals Needs to Know to Keep Your Organization Alive!” 16 KYSHRM attendees enjoyed the Dance Contest at the Exhibitor Reception

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I DO

THAN IMPLEMENT POLICY. I’M A

SHRM helps me create a VALUE CHAIN.

CHIEF ENERGIZER.

Each employee contributes to our organization’s output. I rely on SHRM for toolkits and templates that strengthen our infrastructure and rally team members around company goals. HR engages hearts and minds. My SHRM membership helps me build enthusiasm and set strategy.

Get more at shrm.org/more

Hyacinth Guy, SHRM-SCP

15-0612-HYA/HRE

Vice President, Human Resources Caribbean Airlines Limited Member since 1995

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10/6/15 12:19 PM

A More Perfect Union?

Three Issues in the 2016 Presidential Election That Will Have the Most Significant Impact on Employers By GABRIEL McGAHA

By now, you probably have heard that an election will be held November of next year to determine who will serve as the 45th President of the United States. What you may not have heard, however, is how the election of our next President could impact employers across America. As candidates from both of the major parties simultaneously court powerful unions for endorsements while also seeking to curry favor with corporations willing to lend financial support to their respective campaigns, prudent employers should be mindful of the issues in the upcoming election that could have a significant impact on their businesses. This article will discuss three of those issues and how employers can best prepare themselves ahead of the election.

Minimum-wage One of the biggest issues facing employers across the country, and an issue that will certainly remain at the forefront of the 2016 Election, is the growing sentiment for a minimumwage increase. The laws governing the federal minimum-wage are set forth in the Fair Labor Standards Act (FLSA), found at 29 U.S.C. sections 201, and following. Generally, businesses that either have $500,000 or more in annual sales or engage in "interstate commerce" are subject to the FLSA’s minimum-wage requirements. While a number of state legislatures have implemented their own minimum-wage standards (see, e.g., Alaska, Arkansas, Nebraska, and South Dakota), the current federal minimumwage is $7.25 per hour, or roughly, $15,000 annually. The demand for wage increases has long been a progressive battle cry, as evidenced by the fact that Democratic primary candidates Martin O'Malley and Bernie Sanders have wasted no time coming out in favor 10

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of raising the minimum-wage to $15.00 per hour over the next several years. Interestingly, however, Democratic front-runner, Hillary Clinton, has been noticeably reluctant to state a definitive position on increasing the minimum-wage. In keeping with the GOP’s national platform, most of the Republican candidates, thus far, either oppose increasing the federal minimum-wage or have proposed eliminating the minimum-wage altogether. In September, U.S. News & World Report reported that 87 percent of general election voters surveyed said they supported at least one proposal for a federal minimum-wage increase – to $9, $10, $12 or $15 – including 77 percent of Republicans and 97 percent of Democrats. Similarly, a Washington Post/ABC News poll conducted earlier this year found that half of all adults say they would be more likely to vote for a congressional candidate who supports increasing the minimum wage. These numbers suggest that, regardless of who is elected President in November 2016, a minimum-wage increase during his or her first term is not only likely, but imminent. Because a drastic increase in the minimumwage could cause massive layoffs or substantial price increases for products and services, thereby weakening the economy, any increase in the minimum-wage will almost certainly be gradual. In any event, employers should be proactive in preparing for these increases to help temper the impact the wage increases will have on their respective businesses. One approach would be to begin making slight adjustments to wages before a mandate is in place to lessen the impact of a federal increase. It is also imperative that employers begin reevaluating the salary levels for their exempt employees and reexamining their pay structures. This is particularly critical in states like California where the minimum salary for an exempt employee who does not qualify for overtime is determined by the minimum wage. Employers in states that permit tip credits for certain types of employees should also be mindful of whether a minimumwage increase could affect the credit they can take against an employee’s hourly wages.

Paid Family Leave Another issue at the forefront of the 2016 Presidential Election is paid family leave. Currently, employees are allowed up to 12 weeks of unpaid leave while retaining their employment under the Family Medical Leave Act. Over the last year, both Republicans and Democrats in the U.S. Senate have proposed acts that would allow employees paid sick days to care for themselves

or family members. The measure proposed by Democrats, known as the Family and Medical Insurance Leave Act, would create a federal insurance program, financed by payroll taxes, that would fund up to 12 weeks per year of paid leave for workers meeting certain family or medical requirements. The Republican-backed measure, known as the Family Friendly and Workplace Flexibility Act, would allow employers and employees in the private sector to agree to allow hourly workers to use the overtime they earned towards paid leave rather than receive extra compensation. Essentially, the Republican proposal would amend the FLSA to allow employers to voluntarily offer an hour and a half in compensatory time off for every hour of overtime worked. The employee could choose whether to accept the leave time or the overtime pay. As a majority of voters from both parties are in favor of a national paid leave law, and companies such as Apple, Google, Netflix, Microsoft, and Chipotle develop their own paid leave policies, it is not surprising that presidential candidates from both parties have expressed support for paid sick leave. Whether a federal insurance program is created or the FLSA is amended to allow employees to exchange earned overtime for paid sick leave or some other proposal is introduced, the passage of a law requiring private sector employers to offer paid sick leave to their employees appears likely in the next four years. Accordingly, one should expect spirited debate among the 2016 hopefuls about what the law will entail and how it should be implemented. In anticipation of this likely shift in the law, conscientious employers should begin devising paid leave policies that are gender-neutral and equally available to all employees. Employers should be particularly careful to ensure that the policies are not written in a manner that appears to discourage the hiring of women, a concern that has been expressed by a number of legal scholars.

impact on labor. The Obama administration, for example, recently launched a major crackdown on employers that misclassify employees as independent contractors. A Republican administration, however, could easily roll back these types of initiatives by simply choosing not to enforce them. In any event, 2016 candidates on both sides will be forced to walk the tight rope of appealing to pro-union voters while also being mindful of the monetary incentives that corporations can provide to candidates who vow to protect their interests.

In Conclusion While there will certainly be numerous issues debated among the 2016 candidates which could potentially impact employers, the minimumwage, paid family leave, and labor policy reform are three issues that could have a significant impact on employers in the short term. As you enjoy your popcorn with family and friends during the debates, listen carefully to the candidates’ positions on these issues and be mindful of how their ideas, if implemented, could affect your business’s relationship with its employees.

Gabriel McGaha, Attorney Fisher & Phillips LLP gmcgaha@laborlawyrs.com www.laborlawyers.com

SISKIND SUSSER PC

Labor Policy Reform Unlike the minimum-wage increase and paid family leave, labor policy reforms are not likely to be a source of compromise among the 2016 presidential candidates. In August, the National Labor Relations Board (NLRB), an independent agency led by presidential appointees, issued one of the most significant labor decisions of President Obama’s tenure in office, making it easier for employees working at franchises like McDonald’s to hold parent companies responsible for labor violations. One of the effects of the NLRB’s decision is that if a franchisee were to unionize, its employees would be entitled to negotiate not just with the owner of the franchise, but also with the corporate headquarters. This decision and others similar have transformed the President into a hero of the labor movement, and the 2016 Democratic hopefuls appear to be eager to continue that momentum. The Republican candidates, however, have different ideas with respect to labor and have embraced a more anti-union sentiment in the coming election. Because members of the NLRB are appointed to five-year terms and require Senate approval, appointments have become more politicized in recent years. Therefore, the election of a Republican President could have sweeping effects on recent pro-union NLRB decisions, which could ultimately be reversed by a more conservative board.

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In addition to appointing members of the NLRB, the President may also take direct executive action, which can have a tremendous www.HRProfessionalsMagazine.com

SEPTEMBER 29, 2015

Small Banks Tap Independent Advisors To Drive Growth “Say you have a $500 million bank that should throw off about a halfmillion dollars in wealth management fees,” Hamm says. “If the bank gets $150,00 of that, the nice thing is, it goes directly to the bottom line. At a multiple of 10 [applied to the bank’s bottom line revenues], they have created a million- dollar-[plus] valuation by creating this service.”

GREATER RESOURCES Faced with increased regulatory pressures, community banks like Paragon can’t afford to build a wealth management offering from scratch, Hamm says. The new merger gives Private Wealth’s advisors access to IFP’s greater resources. In exchange, IFP advisors will have access to Private Wealth’s bank relationships. Audrey Liles, Charles Hardee, Staci Jackson, Brooks Monypeny, and Mark Winburne When small banks look at independent planners, they see dollar signs. Small community banks around the country are increasingly teaming up with independent broker-dealers and advisors to ramp up revenue and compete with wirehouses. “I want [advice] to be as big a part of our business as the mortgage business, and I think it can be in five to 10 years,” says Mike Edwards, president of Paragon Bank, which runs four offices in Memphis and one in Atlanta and has $300 million in assets. The employee-owned bank launched a wealth management division in November through a partnership with four veteran LPL-affiliated advisors. They are former Raymond James & Associates advisors Staci Jackson, Charles Hardee and Kent Brooks Monypeny, as well as Mark Winburne, who used to work for FirstBank Investment Partners and Morgan Stanley. A pair of national LPL-affiliated firms – one of which drove the Paragon deal -- have merged to foster similar alliances. Once small- and mid-sized banks add planning services, they won’t be forced to refer clients to local wirehouses or other competitors, says William Hamm, founder and CEO of Independent Financial Partners.

‘NON-INTEREST FEE-INCOME MACHINE’ “We are bringing the hybrid platform to the bank channel, which is relatively new,” Hamm says. “It is kind of an off-the- balance-sheet, non-interest, fee-income machine. There is no capital outlay on the part of the bank.” Independent Financial Partners, a national network of 500 advisors with $5 billion in assets under management, merged this month with a smaller network, Private Wealth Alliance. The latter has 40 advisors in regional and community banks and credit unions serving about 5,000 clients with more than $500 million in AUM. The merger formed IFP Institutional Services, which is jointly owned by Independent Financial and Private Wealth, which did the Paragon deal. The new firm will continue to operate under the Private Wealth brand. Many IFP advisors come from wirehouses, while Private Wealth’s advisors already work out of institutions ranging in size from $200 million to $21 billion in assets, say Hamm and Dan Overbey, managing director of Private Wealth Alliance and IFP Institutional. By building teams of independent advisors, many smaller banks are looking for an equity cash out down the line for their founders. 12

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Paragon’s four LPL-affiliated advisors work out of the bank’s office space, but are not bank employees, Edwards says. Private Wealth handles all the regulatory and compliance issues related to the advisors’ client work. Each of the advisors had been operating independently for years on their own, Overbey says. All four are both registered representatives and investment adviser representatives, according to their regulatory filings. The bank currently is negotiating with a fifth advisor in Atlanta, who may not work out of one of the bank’s offices, Edwards says. More than 80% of the revenues the advisors generate, Edwards says, come from fees. For the privilege of working out of the bank, they pay a small portion of the income they receive off their entire book of pre- existing business to Paragon, and a larger split of the income they receive from clients referred to them by the bank, Edwards says. Only a handful of the bank’s 3,000 customers now use the advisors, Edwards says, but he envisions that number growing to 10% or more. By farming out this line of business to a third-party, Paragon also avoids liability, Edwards says. The advisors “are selling non-FDIC-insured products,” he says. The task of making “sure they are not selling a fixed annuity to a 90-year-old or putting all of someone’s assets into one stock” does not fall to the bank, he adds.

‘OUT-OF-THE-BOX CONCEPT’ Nationwide, there are less than five banks in the country that have more 500 financial advisors on their payrolls, says Overbey, who is also listed as president of Paragon Wealth Solutions on the bank’s website. “What we are doing with IFP is we are giving that 10-person or 15-person shop the same scale, same tools, same access that a 500-person shop would have,” Overbey says. “That’s huge. It’s an out-of-the-box concept.” “If IFP were a bank program, it would be one of the top 10 programs in the country” in term of advisor-count, he adds. “All of a sudden, [small banks] are able to compete with Morgan Stanley. “We think there is significant opportunity there,” Hamm says, “and expect to be very successful with it.”

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Communicating Employee Benefits: Why the Traditional Open Enrollment Brochure Is Just the Beginning Once upon a time, it was normal—and even encouraged— to present your employees with a 50-page printed enrollment guide during benefits open enrollment and send them on their way. “Pick your plans, sign, and return the forms to me in two weeks,” you might say. And your employees would nod their heads before returning to their cubicles with pencil in hand to read (a little) and then fill out their selections for the year ahead. No one really understood their benefits. And companies didn’t really care. Fast forward to the present. While employees are still in the dark—a recent survey by the Society for Human Resource Management (SHRM) estimated only 9 percent of employees are “very knowledgeable” about their benefits—companies do care. And they should. MetLife’s 13th annual US Employee Benefit Trends Survey, which included 2,595 interviews with benefits decisions makers and 2,463 interview with full-time employees, found that professionals satisfied with their benefits are almost four times as likely to also be satisfied with their work. In addition, the Affordable Care Act (ACA), the impending 40 percent excise tax, rising costs of healthcare, and increasing competition to recruit and retain skilled talent have brought the importance of employee benefits even more into the spotlight. Yet, while companies are finally paying closer attention to their benefits, they’re often still failing to effectively communicate those benefits. According to the SHRM survey, only one-fifth (22 percent) of respondents “strongly agree” that their organization’s employee benefits communications efforts are very effective in informing employees about their benefits. What’s missing? A strategic communications plan. What’s in a plan? HR, meet your marketing and communications team. It’s time you started working together. The first step is to put pen to paper and create a strategic communications plan. This plan should include a yearlong timeline of ongoing communications delivered through a variety of channels. Now, for some of you, working hand-in-hand with your communications department may be unrealistic. Your communications team may be extremely busy . . . or nonexistent. And, even if you do have a communications team with capacity, team members may not be well-versed in employee benefits communications. In any case, Lockton Benefits communications experts can help. Our experienced employee benefits marketing and communications professionals can help craft your plan and execute it, seamlessly taking your “to do” list from absolutely overwhelming to somewhat manageable. What our communications experts—and yours too, if you have them—will tell you is this: A paper enrollment guide isn’t enough, but it should not be thrown out the window. And, of course, open enrollment is a critical time of year to communicate with employees about their benefits package, but is it the only time? No way. In short, a comprehensive and strategic employee benefits communications plan should: 14

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v Understand the audience. v Take place year-round. v Incorporate traditional communications like enrollment guides and in-person meetings in addition to mobile, social, and video technology, depending on your company culture. v Make communications personal and relevant by segmenting messages for various employee groups. v Consider spouses and dependents as possible decision makers, making your communications easy to share and access outside of work. v Include a budget. v Feature measurable goals. Recently, we partnered with one of our clients in the hospitality industry to develop a strategic communications plan tackling two key messages—removal of its health maintenance organization (HMO) plan and addition of a health savings account (HSA). The communications plan was designed to run from February through October, nearly the entire year, and divided the audience into several categories—new hires and existing employees, as well as English-speaking and Spanishspeaking. A variety of communication channels were used, including: v Traditional enrollment guides. v Benefit charts. v Posters. v PowerPoint presentations. v Brainshark videos. v Postcards and separate trifold brochures (mailed to employees’ homes to be reviewed with family). These materials were all available in English and Spanish, and both online and in print. “Our client is already reporting great success,” said Lauren Hoggatt, Communications Consultant in Lockton’s St. Louis Benefits operation. “HSA enrollment and employee morale are both up—a win for all.” In another example, Lockton recently helped a client launch a multimedia approach to communicating during open enrollment. This real estate management company, with a diverse population spread across the country, deployed text messaging and a private employee-based social networking site to communicate employee benefits messages. These tools, coupled with traditional print, email and intranet campaigns, are driving enrollment and engagement. “Our client’s employees appreciate the option of receiving text messages regarding their benefits,” said Thais Moore, Vice President, Director of Marketing and Communications, Lockton Northeast. “My advice: Take inventory of your recent employee benefit communication campaigns. Don’t stop doing what you’ve always done that has worked, but be open to new communications channels too.”

v What worries your employees? How can your employee benefits plan address these concerns? v Who are you trying to influence? There may be multiple groups here. v What behaviors do you want to change? v How do your employees prefer to receive communications? Email, text, intranet, in-person? v Do your employees have access to all communications channels? When it comes to understanding your employees’ health needs and risks, Lockton’s proprietary InfoLock® data warehouse can help by using real data and claims. Now, your communications can be targeted to achieve certain results— reducing body mass index (BMI), ensuring proper prenatal care, addressing diabetes, or lowering stress. The more you know about your employees, the better you can tailor your messaging and ensure success.

Know your audience Understanding your workforce demographics—age, income level, language, gender, and more—as well as health needs and risks—are all critical to creating an employee benefits communications plan that inspires action and helps meet your company’s business goals. Gathering information about your employees is key. A few questions to consider:

Embrace mobile, social, and video Despite our society’s increasing demand for technology, very few companies (4 percent) who took part in the SHRM survey use social media as an employee benefits communications tool, and only an additional 8 percent plan to start using social media in the next year. Yet the Pew Research Center reports that 74 percent of American adults use social networking sites, and 90 percent

Keep the conversation going year-round OK, you know your audience. But how often do you communicate with them? Historically, benefits communications were limited to the open enrollment period or new-hire orientation. Those methods still apply, but we absolutely must keep the conversation going all year long. Worried you’ll run out of things to say? Here are a few tips: v Develop a schedule, an editorial calendar or whatever you want to call it. Just make one, and stick to it. v When you don’t have anything pressing to communicate, consider tying your message to a seasonal one—flu season, allergies, sunscreen/UV protection, or cancer awareness. v Repurpose content across all channels—perhaps the same message is modified slightly to be used in an email, poster, direct mail piece, text message, and video. Consumers need to hear/read the same message multiple times before it sinks in fully. Repetition is good. v Create an online benefits hub, typically through your company intranet, where employees can easily find the information they need. This will be your employees’goto place for benefits information, not the handbook or enrollment guide buried in the bottom drawers of their desks. Send regular emails or text messages about updates to the benefits hub.  Consider using an externally hosted site so family members can see the information too. v Provide employees with personalized statements (print, online, or both) that show them the cost breakdown of their benefits—how much the company pays vs. employees, how close they are to scoring on the company wellness initiative, etc. Companies can provide these statements quarterly, monthly or even bimonthly along with paychecks. v Keep it simple. When selecting benefits, an employee wants to know: “What should I do?” All of your messaging should focus on answering this simple question.

of American adults own a cell phone. Furthermore, a recent GuideSpark survey revealed that 44 percent of millennials prefer to receive benefits information from their employer via text message. Clearly, employees of all ages are using mobile devices, social networking sites, and video to communicate and engage with one another. HR professionals need to jump in the mix and meet their employees where they already are . . . and want to be. The first step is to make sure your benefits information is optimized (sized and scaled correctly) to be easily viewed on a mobile device—a strategy 40 percent of companies already embrace, according to the National Business Coalition on Health. Next up, text messaging. Lockton has worked with several clients on text messaging programs to communicate with employees about benefit plan changes, enrollment deadlines, wellness opportunities, and more. It’s a quick and easy way to send information to your employees and can often be customized based on language, gender, job type . . . you name it. Recently, an employer was faced with the challenge of communicating to employees who didn’t have regular access to computers or the company intranet and who worked odd hours, making in-person benefits meetings difficult to schedule. Text messaging turned out to be the easiest, most reliable, and most effective way of reaching these employees. Texts could be sent in English, Spanish, and Mandarin Chinese—covering the company’s diverse workforce—and employees could easily share the benefit information with their family members. Besides texting, companies are also exploring social networking sites and video as ways to share information. New hires might find a Facebook page helpful to meet other new recruits. And Yammer, a private social network that claims to help employees collaborate across departments, locations, and business units, is effective for sharing benefits information and answering general questions employees might have. Video, too, can be a tailored option for companies aiming to provide their employees with quick, easy-to-understand content that’s cost-effective and efficient. Lockton recommends video to nearly all of our clients, and many embrace the idea. Videos are especially helpful when sharing information with family members who aren’t able to come into the office for in-person meetings with a benefits administrator. Employee benefits communication methods used by organizations: Enrollment materials (online or paper) 83% Group employee benefits communications with an organizational representative 70% One-on-one employee benefits counseling with an organizational representative 52% Intranet 46% Newsletters (online or paper) 41% Direct mail to home/residence 38% Benefit fairs 25% Virtual education 15% Social media 4% Other 9% Source: Society for Human Resource Management, Strategic Benefits—Communicating Benefits Tailor your messages Do you really want your male employees to receive a text message promoting the importance of mammograms? And should your night-shift employee in a distribution center receive an email featuring an image of a man in a tie sitting in a sunlit office? Without segmenting, these impersonal messages could very

well be sent to your employees, creating the very unfavorable message that you, the employer, don’t know who they are or what they do . . . and you don’t care. Yet shockingly, the National Business Coalition on Health reports that almost 90 percent of employers don’t personalize their communications to employee or demographic groups. Be the exception. Take the time to know your audiences and tailor your messages. We are all different and, therefore, motivated by different things. The words, images, and even delivery channels you use in communicating with your employees all matter. Make each benefits message meaningful and relevant, segmenting by age, job role, salary, demographic, or even whether an employee has dependents. Your employees will love you for it—and engagement will soar. Make it a family affair According to the US Department of Labor, women make 80 percent of healthcare decisions for their families. Whether your employee is a man or woman, with numbers like these, it’s only smart to consider family members in the enrollment process. Whether your employee is the financial provider for his or her family and someone stays home with the kids, both partners work, or your employee has a same-sex partner or spouse, it’s best that all family members are involved in selecting— and maximizing—their benefits options. The best way to ensure involvement and, thus, engagement is to make benefits information easily sharable and interactive. Videos, webinars, emails, mobile apps, web- hosted platforms, brochures, postcards—all are effective ways to “talk” to decision makers at home. It’s also a good idea to use visuals and examples that represent different family scenarios in addition to considering family-friendly benefits some companies are offering, like: v Life and disability insurance. v Wellness programs. v Flexible spending accounts. v Infertility and adoption resources. v Parental leave, family leave, flex time. v Employee assistance programs. Show me the money Communicating employee benefits doesn’t come cheap— especially with the addition of the ACA and its many compliance requirements. Reporting what’s going on, and communicating about it, costs a fortune, said analysts at the International Foundation of Employee Benefit Plans (IFEBP). In a survey of 598 human resources and benefits professionals, about 17 percent said explaining the ACA to benefit plan participants and potential participants has been a major health benefits cost driver. Thirty-eight percent said higher spending on complying with the new ACA reporting, disclosure, and notification requirements has been a big cost driver. Despite these numbers, according to an ADP survey, most benefits specialists reported annual benefits communication budgets are $25,000 or less, and 75 percent say that amount hasn’t grown in the past year. The ADP report also concluded that only one in five of both large and midsized companies plan to increase their budgets for benefits communications, despite significant new requirements imposed by the ACA. A mere 1 in 5 of both large and midsized companies plans to increase its budget for benefits communications, despite significant new requirements imposed by health reform. Measure your progress If you’re going to spend money on an employee benefits

communications strategy—and clearly we think you should—you’ll need to prove its effectiveness. The best way to do that is by tracking, measuring, and reporting successes to company leadership. A few items to measure include: Volume and quality of communications v Web traffic. v Email click-through and open rates. v Meeting attendance (in person or online). v Communications survey responses. v Focus groups. Program participation/use v Health plan enrollment. v Wellness program participation. v Preventive care utilization. v Financial wellness programs. v Employee assistance program utilization. Health and financial outcomes v Aggregate biometric data. v Claims data. v Retirement plan and HSA balances. As you track, measure, and look for trends and successes, keep in mind: v Change doesn’t happen overnight. v You must be consistent. Keep those communications coming. v Be flexible. You may need to change up messaging or the channels you’re utilizing based on feedback and performance. v Assess your communications performance throughout the year. Don’t wait until the end of your benefits year to realize a communication channel or message failed dismally. v Keep your chin up. You’re taking proactive steps to educate and engage your employees. Everyone will win. 7 Keys to Effective Employee Benefits Communications: 1. STUDY Get to know your audience—your employees and their families—as well as their health goals, needs, and risks. 2. PLAN Create a year-round communications plan, and stick to it. 3. M IX IT UP Incorporate traditional communications like enrollment guides and in-person meetings in addition to mobile, social, and video technology. 4. SEGMENT Make communications personal and relevant by segmenting messages for various employee groups. Age, marital status, language—all should be considered. 5. I NVOLVE EVERYONE Consider all family members as household decision makers, and make your content easy to share. 6. BUDGET Set aside a budget for your communications efforts. 7. MEASURE Establish goals and measure your progress.

Brad Owens

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

www.HRProfessionalsMagazine.com

G H TS H IG H LI

LITTLE ROCK September 17-19

1 Susan King Meadors and Brian Vandiver were co-chairs of the 2015 ELLA Conference. 2 Mike Aitken, SHRM VP Government Affairs, was the keynote speaker on Thursday. His topic was: Washington Outlook: HRâ&#x20AC;&#x2122;s Public Policy Agenda. 3 Rex Nelson Communications Director with Simmons First Bank spoke on the new state of Arkansas. 4 (L-R) Bill Cash with Tim Orellano and Wayne Young. Bill Cash is Area Director of the EEOC. Tim presented an affirmative action update, and Wayne provided the legislative update.

5 Jeff Spillyards with Mitchell Williams Law Firm and Missy Dukes with Cross, Gunter, Witherspoon & Galchus, presented new proposed DOL regulations for overtime. 6 Dan Herrington with Friday, Eldredge & Clark presented managing the risk of social media and background checks. 7 Stuart Jackson and P. Delanna Padilla with Wright, Lindsey, and Jennings spoke on LGBTQ & the law. 8 Rick Roderick with Cross, Gunter, Witherspoon & Galchus spoke on the NLRB and employer practices and policies.

ARSHRM members at the 2015 ELLA Conference.

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The Deadline for the ACA Reporting Requirements Is Looming.

Are You Ready?

By JENNIFER S. KIESEWETTER

We’ve been gearing up for this now for some time. Some employers have hired out. Some employers have decided to tackle these themselves. Whatever road has been taken, the deadline is fast approaching – employers are required to submit their 2015 ACA informational reporting beginning in January 2016.

Gearing up for this submission has been a bit like preparing and revising a rough draft. Over and over. The guidance and forms from the Internal Revenue Service (IRS) has been in “draft” version until just recently. On September 17, 2015, the IRS released the final version of the 2015 reporting forms and instructions under Sections 6055 and 6056 of the

Section 6056 reporting is required by applicable large employers who provide medical coverage to their full-time employees, or full-time employee equivalents, and helps the government administer the employer mandate and associated penalties. This is expounded upon in the next section below. The Code Sections 6055 and 6056 reporting requirements were set to take effect in 2014; however, the Treasury Department provided employers with a one-year extension to comply with these reporting requirements until 2015. Thus, the effective date of 2015 for Sections 6055 and 6056 reporting is now upon us. The returns for coverage provided during the calendar year of 2015 are due during the first quarter of 2016.

Internal Revenue Code, as added by the Affordable Care Act.

A Recap of Sections 6055 & 6056 As a refresher, Section 6055 reporting is required by entities that provide minimum essential coverage under the Affordable Care Act and helps the government administer the individual mandate and associated penalties. Thus, this reporting rule applies to health insurance issuers, self-insured health plan sponsors, government agencies that administer government-sponsored health insurance programs and any other entity that provides minimum essential coverage (MEC). For fully-insured plans, the carrier will provide the MEC reporting to the enrolled individuals and for self-insured plans, the employer shall provide such reporting to the enrolled individuals. 18

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Who is an Applicable Large Employer for Purposes of Section 6056 Reporting? Section 6056 reporting applies to applicable large employers. An employer qualifies as an applicable large employer if that employer employs an average of at least fifty (50) full-time employees, including full-time employee equivalents, on business days during the preceding calendar year. Full-time employees are those employed on

average for at least thirty (30) hours of service per week. Thus, no employer reporting is required under Section 6056 for employers with less than fifty (50) full time employees, whether the plan is insured or self-insured. For Section 6056 reporting, the applicable large employer reports to the IRS on the offer of coverage and whether, under the ACA, such coverage satisfies the minimum value threshold as well as whether such coverage is affordable to full-time employees.

What are The Reporting Forms? Employers reporting under Section 6055 (Minimum Essential Coverage) must use IRS Forms 1095-B and 1094-B. Employer reporting under Section 6056 (Applicable Large Employer) must use IRS Forms 1095-C and 1094-C. Self-insured plan sponsors that satisfy the definition of applicable large employer, thus making them subject to both Sections 6055 and 6056, will report information required under Section 6055 in Part III on Form 1095-C.

It is important to note that employers with full-time employees, and full-time employee equivalents, of 50-99, which are not required to provide health insurance under the employer shared responsibility rules until 2016, are still subject to the Section 6056 reporting requirements and must file accordingly in 2016. Further, non-profit organizations and governmental entities are also included as applicable large employers subject to Section 6056 reporting requirements.

The chart below gives a summary of each form that must be completed and each entity that is responsible for each form:

FORM 1095-B (§6055)

FORM 1094-B (§6055) FORM 1095-C (§6056)

FORM 1094-C (§6056)

WHAT IS IT? Reports covered individuals, including family members for small employers with self-insured plans; proves individuals had minimum essential coverage (MEC) Transmittal to IRS Reports each employee who was full-time for any month of the calendar year. The employer is required to furnish a copy of the Form 1095-C to the employee. Determines employer penalty. Determines individual premium tax credit eligibility. Proves MEC (if self-insured); must report on all employees, even if not FTE, and family members as well, if self-insured. Transmittal to IRS

What are the Deadlines? For the 2015 calendar year, employers must send a copy of the Form 1095, or a substitute copy of the Form 1095, to their employees by January 31, 2016. Such copy can be provided electronically with the employee’s consent. The remainder of the forms must be filed with the IRS by February 29, 2016, if filing on paper (leap year), or March 31, if filing electronically. Extensions and waivers are available, however, time is running short for such requests.

Are There Penalties Involved? This past June, the Trade Preferences Extension Act of 2015 was passed by Congress. Although this Act has very little to do with the ACA, interestingly, it did contain some provisions with respect to penalties on the reporting provisions set forth above. It increased the penalty amounts for failure to report. For example, for failing to timely file a Form 1094/1095 or to provide individual statements to employees, the old penalty was $100 per return or statement. The new penalty is $250 per return or statement. The penalty per filing of intentional disregard was $250 per filing and is now $500 per filing (with no cap available). The old cap on penalties was $1.5 million and is now $3.0 million.

A one-year transition is provided by the Internal Revenue Service if the employer filed in good faith but filed incorrectly or filed with incomplete information. If that is the case, and a good faith effort can be demonstrated, then no penalties should be assessed by the Service. However, a failure to file does not fall into this transition.

Although we just got final forms from the IRS early this fall, the deadlines are cast in stone. We have to move fast and there is a lot of data to accumulate for reporting purposes. Are you ready? Did your start getting your systems in place prior to the final forms dropping? Or did you push this task down the list?

This ACA reporting is yet another area that primes us for audit. It is an area that deserves close attention and prudence. Make sure your team is assembled. Like all other compliance, proactivity is key to audit preparation.

Jennifer S. Kiesewetter, Esq. Kiesewetter Law Firm, Pllc jkiesewetter@kiesewetterfirm.com www.kiesewetterfirm.com www.HRProfessionalsMagazine.com

Tennessee SHRM

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

Dan Pink

Thurs., Oct. 8th General Session

Jake Greene

Steve Gilliland

Chip Madera

General Session

Thurs., Oct. 8th

Fri., Oct. 9th

The theme of the conference has allowed for the development of keynotes and sessions that will truly educate attendees. This year's event will embrace all the emerging trends that impact HR professionals. As an attendee you will have the opportunity to visit with over 100 exhibitors that will display their company's latest products and services oriented toward the needs of the HR Professional. And, we haven't forgotten to add in some fun with receptions and social events! We are pleased to be serving as your conference committee and happy to bring

you this exceptional Conference. 2015 TNSHRM State Council Frances Flowers, SPHR Conference Co-Chair

23rd Annual

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

HIGHLIGHTS

Chattanooga, TN October 7-9, 2015

SPACE IS LIMITED

Tennessee SHRM

Conference and Exposition

We welcome you to be a part of the 23rd Annual Tennessee SHRM Conference and Exposition that will be hosted by the SHRM Chattanooga Chapter, an affiliate chapter of the Society for Human Resource Management. This exciting, educational event will afford attendees the opportunity to learn and network with over 600 HR Dan Pink Jake Greene Steve 1 2 Oct. 8th 3 Gilliland Chip Madera 4 Thurs., Thurs., Oct. 8th professionals from across the state and Fri., Oct. 9th Fri., Oct. 9th General Session General Session of Labor General 1 Staciesurrounding Caraway, attorney with Miller & Martin kicked off the Legal Day on Wednesday with An Overview andSession EmploymentGeneral Law. 2Session Karen Smith, areas. attorney with Miller & Martin was the speaker for the general session on Wage & Hour issues. 3 Angie Davis and Jonathan Hancock, attorneys with Baker Donelson, presented by Text, Incrimination by allowed Instagram,for Caught on Craigslist.” 4of Rusty Gray, attorney with Bakerthat Donelson, was educate moderator for the The theme“Trial of the conference has the development keynotes and sessions will truly general session panel discussion. attendees. This year's event will embrace all the emerging trends that impact HR professionals. As an

attendee you will have the opportunity to visit with over 100 exhibitors that will display their company's latest products and services oriented toward the needs of the HR Professional. And, we haven't forgotten to add in some fun with receptions and social events! We are pleased to be serving as your conference committee and happy to bring you this exceptional Conference. Frances Flowers, SPHR Conference Co-Chair 5

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

5 Ed Young, attorney with Baker Donelson, presented “Getting Ready for Potential Sudden Unionization Under the New Quickie Elections.” 6 A panel of HR Professionals and Attorneys took questions from the audience. 7 SHRM CFO Mary Mohney kicked off the Thursday morning general session.

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2015 TNSHRM State Conference Volunteers

8 Jake Greene was the opening keynote speaker on Thursday. His topic was “Intergenerational Innovation and Community Driven Success.” 9 Valerie Gifford, CEBS, SHRM-SCP, SPHR, Director of TNSHRM, and VP of HR for the Tennessee Valley Federal Credit Union in Chattanooga, was the recipient of the James House Williamson Award. This is the highest award given to someone in HR in Tennessee. Debbie Mackey and Curt Hall were presenters. HUMAN RESOURCES PROFESSIONAL EXCELLENCE AWARDS – Curt Hall, Awards and Scholarships Chair presented the HR Professional Excellence Awards to the following (L-R): 10 Catherine Barnes, SHRM-SCP, SPHR-CA, of Knoxville, is HR Director of Shafer Insurance Agency. 11 Linda Glasgow, SHRM-CP, PHR, of Knoxville, is HR and Training Director for Lewis, King, Krieg, & Waldrop, P.C.

12 Shawn Pellington, SPHR, of Knoxville, is HR Generalist for McKee Foods Corporation in Collegedale. 13 Merri Mai Williamson, SPHR, of Chattanooga, is Founder and Chairperson Application Researchers, LLC. 14 Jennifer Shields, SHRM-SCP, MS, SPHR, of Chattanooga, is a Telecommuting Consultant with Blue Cross Blue Shield Tennessee. 15 Felicia Pierce, SHRM-CP, PHR, of Chattanooga, is HR Consultant Business Partner for CHI Memorial.

TNSHRM Conference attendees enjoyed the Opening Reception on Thursday evening at the Hunter Museum of American Art.

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BEST PRACTICES for Selecting a Plan Advisor Itâ&#x20AC;&#x2122;s no longer good enough for investment advisors to pick a few mutual funds for sponsors of 401(k) plans and then adjourn for lunch. Plan advisors need to also consider it their jobs to protect 401(k) plan sponsor boards, corporate officers and other plan fiduciaries from an increasingly active and high ERISA bar.

Risks to consider Recent court decisions have identified issues that investment advisors need to consider to effect prudent plan management and to protect their 401(k) plan clients from significant fiduciary liability. Plan sponsors are at risk and thus investment advisors need to insulate them from a new wave of ERISA lawsuits, regulatory oversight and legislation. Plan sponsors will likely call upon investment advisors with ERISA experienced with the ins and outs of the Employee Retirement Income Security Act of 1974 to manage plan operation and fiduciary compliance. Investment advisors will need to do more than perform fund due diligence and provide fund recommendations. The marketplace will offer ever-expanding fiduciary service models, thus challenging investment advisors to expand their service deliverables for their 401(k) plan clients.

Fiduciary Duties 401(k) plan fiduciaries have been found to have breached their duties to plan participants and have been assessed significant damages for failing to monitor recordkeeping costs, negotiate rebates and prudently select and retain investment options. Many plan sponsors have relied upon non-fiduciary service providers for investment selection and fiduciary guidance in the absence of a fiduciaryoverlay service or discretionary vendor. Plan sponsor fiduciaries cannot rely upon a non-fiduciary service provider with a conflict of interest to accept responsibility for their service model and investment fund recommendations. Plan sponsors should become increasingly skeptical of non-fiduciary service providersâ&#x20AC;&#x2122; managing plan assets and plan administration. Investment advisors need to educate plan fiduciaries who may not recognize a conflict of interest.

Investment Advisor Qualifications There will be more claims against 401(k) plan fiduciaries who previously considered themselves immune based upon offering a broad selection of investment alternatives. It is critical for investment advisors to have the requisite skills and knowledge to uncover embedded fees, conflicts of interest, and contract limitations inherent in the retirement plan solutions they offer their 401(k) plan sponsor clients.. 22

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By CHARLES SIMS, JR.

Courts have emphasized the importance of implementing and adhering to a deliberative process and focusing on the merits of employer decisions affecting plan participants. ERISA fee litigation cases emphasize that employers must follow established processes and act in the best interests of the plan and for the exclusive benefit of plan participants. Accordingly, 401(k) plan sponsors rely on their investment advisors to establish these processes, to effect procedural prudence, to avoid conflicts and to document decisions. Investment advisors need to become experts qualified in fiduciary standards of care and assessment. Most firms providing retirement plan administration services do not guarantee the completeness or accuracy of their services â&#x20AC;&#x201D; they process the information plan sponsors provide to them. Most employers do not have the internal controls in place to ensure operational compliance with plan terms in order to satisfy ERISA. Consequences of noncompliance consume company staff time, increase legal costs and expose plan sponsors to liability and monetary sanctions. The current regulatory environment makes it difficult for an investment advisor to adequately represent plan sponsor interests unless the advisor is an ERISA fiduciary. The Investment Advisor should hold meetings with the employees including executives.

401k Fees The recently introduced quarterly disclosure forms are helping workers understand fees, but people need to pay attention to the fees they are charged by workplace plans and compare them with published expense ratios for the same funds offered to the public. "If it's more than 1 percent, they ought to be asking why that is especially if they work for a very large company," he says. "Warren Buffett doesn't pay retail prices for stocks, and neither should the employee of a billion-dollar 401(k) plan."

Plan Sponsors Responsibilities Recent case law imposes new responsibilities upon Plan Sponsors. A wave of fiduciary lawsuits is creating new plan best practices. Plan Sponsors must implement and maintain an objective strategy with predetermined procedures to remove subjectivity and comply with ERISA 's fiduciary requirement to act solely on behalf of participants.

Investment advisors need to implement and manage, among other best practices, the following plan fiduciary best practices to protect their 401(k) plan sponsor clients: 1. Revenue sharing and recordkeeping fees: Employers must monitor record-keeping fees and revenue sharing pursuant to a deliberative process demonstrating that committee decisions are in the best interest of plan participants. Service providers may not retain revenue sharing that far exceeds the market value of plan services. 2. Revenue sharing and fee offsets: Employers must negotiate revenue-sharing rebates with service providers to reduce the cost of providing administrative services to plan participants, if mutual fund expense ratios are excessive and unreasonable based upon a comparison in the marketplace. 3. Selection and de-selection of investments: Employers must document the process of evaluating the competitive market for comparable investment funds. Deleting a good performing fund or using alternative share classes to create more revenue sharing to offset fees violates investment policy statement criteria and the exclusive-benefit rule. Fund replacements must provide a reasonable investment advantage to participants.

Rhonda L. Benton

Receives Certification in Healthcare Human Resources

4. Subsidization of corporate services: Employers must avoid the payment of fees that exceed the market costs for plan services in order to subsidize corporate services, including payroll processing, welfare benefit plan and defined benefit plan services. 5. Float Income: Float, the income and interest earned when contributions and disbursements are held temporarily during the transfer process constitutes plan assets and therefore must be allocated only among 401(k) plan participant accounts. 6. Fiduciary monitoring criteria: Employers must review custody statements monthly, compare manager performance quarterly, evaluate service provider quality annually and scrutinize service provider contract capabilities, services and fees every three years. 7. Asset-based fees: It is imprudent to use asset-based fees to pay for administration services, as fees increase even though no additional services are provided. 8. Risk-sharing: It is imprudent to enable service providers to charge harddollar fees to replace lost revenue sharing resulting from declining plan asset values without determining the revenue-sharing amount, the market cost of comparable services and whether using revenue sharing to pay plan fees is in the participantâ&#x20AC;&#x2122;s best interest. 9. Investment policy statement: It is imprudent to maintain an investment policy statement without adhering to its fund replacement criteria and revenue-sharing application, as plan sponsors will be held liable for the failure to comply with same. 10. Automatic enrollment is recommended. In a 401(k) plan automatic enrollment doesn't mean workers give up rights or choices. It simply means that instead of asking workers to make a conscious effort to enroll in a retirement plan, they are opted in. Any worker in such a system can always choose to change contribution levels and/or the investment options for those funds, or cancel participation altogether.

Rhonda Langrell Benton, SPHR, SHRM-SCP, CHHR, CLRP, Director of Employee Relations with Arkansas Childrenâ&#x20AC;&#x2122;s Hospital (ACH), has received Certification as Healthcare Human Resources (CHHR) from the American Hospital Association/American Society for Healthcare Human Resources Administration (ASHHRA). She is the first Arkansan to obtain this professional designation. She has over twenty years of experience in human resources and began her career with ACH in 2006. Mrs. Benton earned her MBA and BBA from University of Arkansas at Little Rock. She holds continuous certification from HRCI as a Senior Professional in Human Resources since 1998 and as a Professional in Human Resources from 1992 to 1998; she is certified by SHRM as a Senior Certified Professional (2015 to present). and is also the first Arkansan recognized as a Certified Labor Relations Professional. Mrs. Benton is a member of the Leadership Greater Little Rock Class XXXI. She has been continuously certified as a Certified Mediator for the Arkansas Circuit Courts, Civil Division, from 2003.

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

Ergonomics… Because your mother said so?

By THERESA J. ALLEN

ouldn’t it be wonderful if research showed that there’s only one thing, one single thing, to making your employees happy? This one thing, if implemented by your company, will make your sales staff, your production line, and your heavy equipment operators more energetic, more loyal, more punctual, more everything as they whistle while they work. Unfortunately, there’s not a secret to making employees happy…at least not just one thing.

It’s a nice thought though isn’t it? But, we humans are just too complicated and multifaceted, which makes it impossible to hinge our happiness on just one thing. Fortunately, through science and years of research, employers now have an overabundance of how-to studies which include checklists, evaluations, bulletins and briefs providing insights into how to make their employees happy, which can possibly lead to higher performance levels. Employers now know that recognition and reward are at the top of the list when it comes to what motivates employees, followed by benefits, open communication, raises and bonuses. But what about their physical comfort? What about an employee’s area or workstation, which is where they spend the majority of their time while on the clock? For instance, do you as an employer take into consideration if your cubicle layout is comfortable for your employees? What about your warehouse or production line employees who use power tools or heavy equipment? Do you monitor their usage and allow for breaks from repetitive motion which could very likely cause discomfort or worse? Comfort for employees equates to ergonomics. Ergonomics is a word of Greek origin defined as the science of designing the workplace to accommodate the worker. It’s all about comfort and fitting jobs with people and applies knowledge to work design. Interestingly enough, before researchers identified and began delving into the development of the ergonomic theory, our mothers may have had grassroots insight into that theory. Think about it. How many times did you hear your mother say, “Sit up straight,” “Pick that up before someone trips on it” or “Don’t sit too close to the TV – it will ruin your eyes”? We’ve all been on the receiving end of those reprimands. Maybe the ergonomic scientists heeded their mother’s scolding more so than we did.

If you as an employer want your employees to routinely record high numbers on their performance evaluations, find a way to keep them comfortable and pain-free. The area of office ergonomics is a little easier to recognize than, say, the ergonomics of grocery store warehousing. We can equate office ergonomics to many aspects of our personal lives. Does the term “easy chair” come to mind? Workstations, if designed improperly, will cause physical stress and can cause the employee to suffer from neck, shoulder, wrist and elbow discomfort. I am sure Ford Motor Company takes the science of ergonomics into consideration when designing their vehicles. Auto manufacturers have all but created a sanctuary for the driver strictly in the name of comfort. Luxury features and auto-everything buttons are strategically positioned within arm’s length for the driver. They give just as much attention to detail in their sound system so that it is pleasing to the ear. And, what about that smell? Well, new car smell is legendary isn’t it? An assembly line employee’s comfort takes on a different form. Assemblers face repetitive motion work-related issues from unnatural or awkward postures and forceful exertions. Common disorders these employees face are more likely in the musculoskeletal family. The most prevalent conditions can include carpal tunnel syndrome, tendonitis, trigger finger, and bursitis. If you do your homework and take the steps necessary to mitigate workplace stress within your particular industry, chances are you will create a positive atmosphere promoting employee comfort. This atmosphere will prove higher levels of productivity and efficiency from your 24

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employees. The quality and accuracy of their work will also be impacted in a positive way because they are more comfortable. Concentrating on ergonomics and comfort will also decrease the costly components you face such as lost work days, turnover, and workers compensation claims. You should also experience fewer illness and injury incidents. Additionally, let ergonomics and comfort boosts morale. This can happen when the employee sees that the company is taking an interest in their safety and comfort. Make it a double morale booster by taking your project a step further and include the employee in your quest to improve working conditions. Since the employee is on the front line, they may recognize problem areas which may go unnoticed. Employee participation and feedback can stimulate thinking about problem solving and maintain an interest in safety and comfort. Ultimately, this approach will contribute to the employee’s long-term quality of life. Taking a proactive approach to ergonomics and comfort requires monitoring your employees for signs of discomfort. Be certain to monitor your employees on a consistent basis, though, not on a particular timeline like just once per year. If you have mostly office personnel, follow a checklist that covers all areas of their workstations, for instance, their chair positioning, the office lighting, and glare reduction from their computers. If you employ agricultural workers, you might want to concentrate on back and shoulder issues due to improper bending and lifting. Also, since this industry is outside and year-round, monitor the effects of hot and cold weather work conditions. Regardless of your industry, making your employees more comfortable by applying ergonomics to your workplace is very beneficial. I’ve read that a big misnomer about ergonomics is that it is expensive. However, I have also read that there are low-cost, simple, common sense solutions out there that work. In most cases, it is a simple matter of obtaining guidelines and compliance from OSHA or your industry association. For instance, you can find general ergonomic policies that define workplace modifications and best practices for assembly lines, general office, guidelines for nursing and residential care facilities, and even meat packing and catfish processing, simply through a Google search. Just keep in mind that comfort is the key and your end desire is to have happier and healthier employees. View your employees as long-term investments and convey it to them by going the extra mile. Weave your ergonomic and employee comfort theory into the fabric of your company. This will prove your commitment. And, if that isn’t enough, encouragement to do so…do it because your mother says so.

Theresa J. Allen Client Resource Team Coordinator Certified PPACA Professional Regions Insurance, Inc. theresa.allen@regions.com www.regions.com

Can we charge employees more if they are tobacco users?

I think so, but I’m not sure.

How would we verify if they quit?

Good question. Who can we call to find out?

Finding More Questions than Answers? When it comes to managing your employee beneﬁts program and the Affordable Care Act, it can seem like every answer only leads you to more questions. Let Regions Insurance’s ACA-trained professionals guide you down the right path – because it’s our business to run defense for your business. 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.

plans continues, with only 26 percent of organizations reporting that they now offer defined benefit pension plans that are open to all employees.

2015 SHRM

Employee Benefits Survey Employers Shift Resources Toward Wellness Benefits to Counter Increasing Health Care Costs With health care costs rising, employers are turning toward wellness programs to counter some of the financial strain, according to the 2015 SHRM Employee Benefits Survey report released June 29, 2015 by the Society for Human Resource Management (SHRM) at the annual conference in Las Vegas. In another recent study, SHRM found that 77 percent of organizations saw increases in their costs and, of those organizations, nearly one-quarter (24 percent) had an increase of 16 percent or more in their overall health care coverage costs. “Wellness benefits provide employers with a preventative approach that can reduce health care expenses for organizations over the long haul,” explained Evren Esen, director of SHRM’s survey programs. “Rising health care costs also remain a primary driver for how other benefit costs are allocated, as employers are still evaluating the impact of the Affordable Care Act.” The top wellness benefits offered to manage chronic diseases and other healthrelated issues include wellness resources and information (80 percent of respondents) and wellness programs (70 percent). Additionally, wellness benefits such as health and lifestyle coaching, smoking cessation programs, and premium discounts for getting an annual risk assessment have risen in the past five years. 26

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Five-year trends also show a slow shift of health care costs to employees. For example, consumer-directed health plans such as health savings accounts (HSAs) have risen by 8 percentage points, and employer contributions to HSAs have also increased by 10 percentage points. The report also shows five-year trend increases in the percentage of organizations offering mental health coverage, contraception coverage, vision insurance, short-term disability insurance, critical illness insurance and coverage for laser-based vision surgery. The survey of 463 randomly selected HR professionals examines more than 300 benefits. Among other findings: o The most common benefits were paid holidays (offered by 98 percent of respondents), dental insurance and prescription drug programs (both 96 percent), mental health coverage and professional memberships (both 91 percent), and organization-provided break room/kitchenette and traditional 401(k) or similar defined contribution retirement savings plan (both 90 percent). o The shift to defined contribution retirement savings plans and Roth 401(k) savings

o The most commonly offered women’s health benefit is contraceptive coverage (83 percent). o Three out of five (60 percent) organizations offered some form of telecommuting: 56 percent of respondents reported that their organizations offered telecommuting on an ad-hoc basis, 36 percent part of the time, and 22 percent on a full-time basis. o The three family-friendly benefits that have decreased over the last five years were bringing children into work in an emergency (22 percent), child care referral services (9 percent) and on-site parenting seminars (1 percent). o The percentage of organizations paying for certification/recertification fees in 2015 (78 percent) increased, compared to 71 percent in 2011. o New benefits added to this year’s report include egg freezing for nonmedical reasons (2 percent), paid surrogacy leave (5 percent), companyprovided fitness bands/ activity trackers (13 percent), companyorganized fitness competitions (34 percent), and company-provided student loan repayment (3 percent).

Evren Esen SHRM’s Director of Survey Programs

A Littler Event – Thursday, December 10, 2015 Navigating the Rising Legal Waters: An Update on Workforce Development Resources and the DOL’s New Interpretation of Independent Contractors Presented by: Steven Likens, Littler George Loveland, Littler Chuck Thompson, Tennessee Department of Labor

Breakfast Program Registration & Breakfast: 8:00 a.m. – 8:30 a.m. Program: 8:30 a.m. – 9:30 a.m. Location: Littler Memphis 3725 Champion Hills Drive, Suite 3000 Memphis, TN 38125

For direct registration, special accommodations and questions, please contact Claire Krummenacher at ckrummenacher@littler.com or 615.514.4187.

littler.com 3725 Champion Hills Drive, Suite 3000 | Memphis, TN 38125 | 901.795.6695 333 Commerce Street, Suite 1450 | Nashville, TN 37201 | 615.383.3033

Highlights from the HRO Partners Seminar SWEEPING OVERTIME RULE CHANGES September 30 at the Great Hall & Conference in Germantown

Jeremy Park, President of the Lipscomb & Pitts Breakfast Club; Cynthia Thompson, Editor of HR Professionals Magazine; and Austin Baker, President of HRO Partners.

Jonathan Hancock, Shareholder with Baker Donelson, was the keynote speaker.

Judy Bell, PHR, SHRM-CP, with HRO Partners was a moderator.

Over 100 HR professionals and business owners attended the event.

Mario Musarra, Compensation Manager with True Green; Whitney Harmon, labor and employment law attorney with Baker Donelson, and Cynthia Thompson were panelists.

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To learn more visit MLeeSmith.com/tnwc‐handbook

The Tennessee Workers’ CompensaƟon Handbook, 7th Edi�on, by Wimberly Lawson A�orney Fred Baker, is the comprehensive resource for anyone who interacts with the Tennessee Workers’ Compensa�on System. It is designed for HR personnel, a�orneys, paralegals, risk managers, claims adjusters, mediators, benet managers, claims analysts, and judges. Now fully updated and edited for 2016, the Tennessee Workers’ CompensaƟon Handbook, 7th Edi�on, gives clear, authorita�ve guidance that will help you navigate the challenges of the new Tennessee Workers’ Compensa�on landscape. Please call or email Brenda Copeland at (931) 372‐9123 or bcopeland@wimberlylawson.com for more informa�on and to order your copy. Packed with crucial compliance and prac�ce guidance to help you manage the sweeping changes to Tennessee workers’ comp laws. Your new edi�on will cover:

New 7th Edition!

 Penal�es. A brand new chapter outlines the various penal�es available under the law as well as the procedure for assessment.  Case Law. New cases from the Tennessee Supreme Court, Workers’ Compensa�on Panel, and new administra�ve court system.  Appeals Board Rules. Learn about the new appellate procedures outlined in the recently‐enacted regula�ons by the Workers’ Compensa�on Appeals Board.  Medical Panels. Recent rules clarify the �ming of medical panels, and the penal�es available for un�mely or noncompliant panels.  Workers’ Compensa�on Judges. Read about new powers granted by statute to judges in the Court of Workers’ Compensa�on Claims.  Statute of Limita�ons. In addi�on to the general 1‐year statute of limita�ons for claims, there is a new 2‐year statute of limita�ons that applies when the par�es fail to seek approval of PPD se�lements.  Retaliatory Failure‐To‐Hire. Learn about the Tennessee Supreme Court opinion declining to create a cause of ac�on under the Tennessee Workers’ Compensa�on Law for failure to hire a job applicant because that applicant had led, or is likely to le, a workers’ compensa�on claim against a previous employer.

www.wimberlylawson.com

FREDRICK R. BAKER is a Member in the Cookeville, Tennessee, oﬃce of Wimberly Lawson Wright Daves & Jones, PLLC, which he joined in 2001. His law prac�ce includes an emphasis in workers' compensa�on and employment discrimina�on, as well as ADA and FMLA compliance. Fred is the Editor of the Tennessee Workers' CompensaƟon Handbook, published by M. Lee Smith Publishers. He is also on the Advisory Board for the Tennessee Workers' Comp Reporter. Fred is Legisla�ve Co‐Chair of the Upper Cumberland Society of Human Resource Management. He is a member of the Mid‐South Workers' Compensa�on Associa�on. Fred is Tennessee's representa�ve for the Na�onal Workers' Compensa�on Defense Network. Fred has an AV Preeminent® Ra�ng ‐ which is the highest possible ra�ng given by Mar�ndale‐Hubbell, the leading independent a�orney ra�ng en�ty. He was selected as a Rising Star in 2012, 2013, and 2014 by Super Lawyers. Fred received his Bachelor of Arts degree in Philosophy, summa cum laude, from Transylvania University and his law degree, magna cum laude, from the University of Tennessee.

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New DOL Rule Limits Exempt Status for Home Healthcare Workers and Domestic Service Providers By GREG NORTHEN

The past year could easily be described as “tumultuous” for employers in the home healthcare and domestic service industry. Indeed, the pendulum of uncertainty has swung back and forth on whether the Department of Labor’s (DOL) new regulatory change is or is not the law. The sweeping changes to employee classifications and compensation requirements for these workforces will have a significant impact on the entire industry, and there is no better time than now to know exactly where this industry overhaul currently stands.

A Year In Review On October 13, 2013, the DOL issued new guidelines under the Fair Labor Standards Act (FLSA) intended to extend minimum wage and overtime protections to workers who provide companionship services and live-in domestic services (the Final Rule or Rule). The DOL claimed that the new Rule will protect as many as two million more employees from inequitable compensation plans than under the previous regulatory scheme. The Final Rule was originally scheduled to take effect on January 1, 2015, with enforcement actions beginning on June 30, 2015, yet staunch opposition from home healthcare associations and a protracted series of court battles delayed its implementation for more than seven months. In January, a federal judge in the District of Columbia initially struck down the Rule by finding that the DOL overstepped its authority to administratively change longstanding precedent under the FLSA. On appeal, following a reverse of that ruling by the D.C. Court of Appeals in August 2015, the Final Rule has been upheld and is back on the table. The Supreme Court ruled on October 6, 2015, that it will not issue an injunctive stay to the DOL’s efforts to move forward with the Final Rule’s implementation, which was the final effort to block its enactment by opponents to the Rule. The DOL announced Wednesday, October 7, 2015, that it will begin enforcing the Final Rule on November 12, 2015. The DOL will take into account employers’ good-faith efforts to comply with the Final Rule and exercise discretion when analyzing violations between now and the end of 2015. The Final Rule has three key components: (1) the tasks that comprise “companionship services” are more clearly defined; (2) the exemptions for companionship services are limited; and (3) recordkeeping requirements for the employers of live-in domestic service employees are revised. The new regulation also completely prohibits third-party employers, such as home healthcare agencies, from claiming the exemption. 30

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FLSA Exemption for Companionship Services Workers The DOL’s Final Rule changes the way certain companionship service workers and live-in domestic workers may claim exempt status under the FLSA. The Department’s stated purpose is to have more domestic service providers become eligible for overtime payment under the FLSA. Perhaps most importantly, and insightful as to the DOL’s reasoning, the Final Rule altogether prohibits third-party employers, such as home healthcare agencies and staffing firms, from claiming an exemption for these types of employees. Prior to this, the DOL had not made any significant changes to the domestic services regulations in 38 years. In 1974, the DOL extended minimum wage and overtime protections to certain types of “domestic workers,” but exempted workers who provided “companionship services” to elderly persons or persons with illnesses, injuries or disabilities. Congress also exempted live-in domestic workers only from the FLSA overtime requirement. Because in-home care is typically unsupervised, the types of services that these workers provide are often performed in a way that makes standard practices of timekeeping much more difficult. For example, there is no way to simply punch a time card when the employee starts and ends a shift. Instead, these types of employees were considered independent contractors and would generally negotiate a flat rate of pay per week or per month. The DOL notes that the new regulations are in response to a shifting trend away from institutional care towards in-home care and that employees performing the same work in an institutional setting do not qualify for the same exemption as in-home care providers.

Clarifications to Definition of “Companionship Services” The Final Rule redefines the duties that characterize “companionship services” for the purposes of this exemption. “Companionship services” means the provision of fellowship and protection for an elderly person or person with an illness, injury or disability who requires assistance in caring for him or herself. Essentially, this is a job that does not provide healthcare or other domestic services for the client. The definition also includes the provision of “care” but only if that care is provided attendant to and in conjunction with the provision

of fellowship and protection and if it does not exceed 20 percent of the total hours worked per person and per workweek. The Final Rule clarifies that the primary focus of “companionship services” should be fellowship and protection. Fellowship means to engage the person in social, physical and mental activities. Protection means to be present with the person in their home or to accompany the person when outside of the home to monitor the person’s safety and wellbeing. On the other hand, “care” is defined by the Final Rule as assistance with activities of daily living (dressing, grooming, feeding, bathing, etc.) and instrumental activities of daily living (e.g. meal preparation, light housework, arranging medical care, assisting with medications, etc.). If the worker spends more than 20 percent of his or her workweek performing duties classified as “care,” then the exemption does not apply and the employee is entitled to minimum wage and overtime for that workweek if necessary.

Limitations on Companionship Services Exemption An employee who primarily performs “companionship services” may still qualify for an exemption from the FLSA requirements provided certain criteria are met. The employee is eligible for an exemption if: (1) the employee is employed by an individual person requiring care or the family of a person who requires care; and (2) general household work is performed only for the person who requires care and does not exceed 20 percent of the total hours worked per employee per workweek. Furthermore, covered domestic service employees who reside in the household where they are employed are entitled to minimum wage but may be exempt from the FLSA overtime requirements (unless employed by a third-party agency).

should conduct a job-specific analysis in order to determine which employees, if any, may no longer be exempt from FLSA requirements. For those employees who are no longer exempt, employers must now develop accurate methods of keeping and recording all hours that its employees work. Additionally, any employees who no longer qualify for the FLSA exemption are now entitled to overtime pay for all hours worked. Undoubtedly, these new overtime requirements will necessitate a review of services provided and the hourly rates provided to such workers in order to minimize the impact on business operations and client costs. Third-party employers, such as home healthcare agencies, who employ live-in domestic service workers or companionship service providers may no longer claim an exemption from FLSA overtime requirements for these employees. These employers must now develop accurate methods of keeping and recording all hours that its employees work, including overtime. It is critical that third-party employers review their contracts with employees whose exemption status has likely changed under the Final Rule in order to ensure compliance with the new guidelines and limit any potential exposure to liability.

Greg Northen, Associate Cross, Gunter, Witherspoon & Galchus, P.C. gnorthen@cgwg.com www.cgwg.com

Revisions to Recordkeeping Requirements for Employers As can be seen, the Final Rule revises previous requirements regarding timekeeping and recordkeeping for live-in domestic service employees. Live-in domestic service workers who are solely or jointly employed by a third-party must now be paid at least the federal minimum wage and overtime pay for all hours worked. Thus, these employers must now keep an accurate record of all hours that its employees work in the home. Employers may require the live-in domestic worker to record his or her hours and submit a timesheet to the employer on a regular basis. Employers are free to enter into agreements with employees to exclude certain activities from compensable hours, such as bona fide sleep, meal and other periods of complete freedom from duties, subject to applicable rules and regulations. Notably, these requirements do not apply to live-in domestic service workers who are employed directly by an individual, family or household. Under this circumstance, however, the live-in domestic service worker may be exempt from the FLSA overtime requirements but is still entitled to at least the federal minimum wage for all hours worked.

ONE AREA OF PRACTICE. ONE FOCUS. The Kullman Firm has engaged in the practice of labor and employment law on behalf of management since 1946. ! Employment Discrimination Litigation ! OSHA ! Wrongful Discharge Litigation ! Collective Bargaining Negotiations ! Labor and ADR Arbitrations ! Union Representation Cases

! Wage and Hour Law ! OFCCP/Affirmative Action ! ERISA/Employee Benefits ! FMLA Compliance

Offices in Louisiana, Mississippi, Florida and Alabama.

Impact on Employers Going Forward In light of these new changes in the law, it is critical for employers to review their contracts with employees whose exemption status may have changed under the Final Rule in order to ensure compliance with the new guidelines and limit any potential exposure to liability. Employers

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Attorney responsible for content of this ad: Martin J. Regimbal www.HRProfessionalsMagazine.com

Wage and Hour Issues Continue For Hospitality Industry: Proposed FLSA Regulations and Beyond

By JENNIFER HAGERMAN

he Department of Labor’s targeting of the hospitality industry continues with the issuance of the recent proposed FLSA regulations. In 2014, the DOL recovered approximately twice as much in back wages for employees of restaurants than any other industry. The DOL has repeatedly cited the hospitality industry as an area where reclassification of employees should occur, mainly due to large numbers of managerial employees in lower-wage positions who are currently classified as exempt. The proposed regulations seek to accomplish precisely that goal by increasing the salary threshold from the current rate of $455 per week (or $23,660 per year) to $970 per week (or $50,440 per year), which is an amount equal to the 40th percentile of earnings (based on a nationwide average) for full-time salaried workers. The salary threshold would also automatically update annually through an established mechanism of either a fixed percentile of wages or the Consumer Price Index. While much of the criticism of the hospitality industry has involved “managerial” employees performing substantial amounts of non-managerial duties, the proposed regulations do not include any changes to the duties tests. The DOL, however, has posed questions and requested comments on the current duties tests, thereby implying that some changes to the tests could occur.

Impact of Proposed Regulations The proposed salary threshold increase, or even a somewhat lower but still significant increase, likely will require reclassification or substantial raises for numerous hospitality industry employees. Examples of potentially impacted positions include: general managers, assistant managers, kitchen managers, front office managers, banquet managers, catering managers, housekeeping managers, and sales managers or directors. As mentioned above, assistant managers in restaurants are frequently cited as examples of employees who should be reclassified due to their long hours, relatively low wages, and limited managerial duties. For example, an assistant manager who works 70 hours per week for 50 weeks per year and is paid a salary of $25,000 earns the equivalent of $7.14 per hour, which is below the current regular minimum wage and well below the overtime rate. The proposed regulations aim to require employers to increase the salary of the assistant manager to a wage that approximates the minimum and overtime wages the employee would receive if the employee were paid on an hourly basis. If that same assistant manager’s salary were increased to $50,000 (which is slightly below the proposed increase), then the manager would earn the equivalent of $14.28 per hour.

Options for Employers in Response to Proposed Regulations Businesses in the hospitality industry, and other industries affected by the new regulations, are strongly encouraged to begin reviewing their options should the proposed regulations be implemented. Employers are not required to increase impacted employees’ salaries to meet the new salary threshold, although that is one option and would allow the employee to remain classified as exempt. It is important to note that benefits and non-discretionary bonuses do not count toward satisfying the salary threshold. The DOL appears to be considering allowing non-discretionary bonuses to satisfy some percentage of the salary requirement. Most hospitality industry experts, however, view salary increases as an unrealistic alternative due to the costs involved. Other options include classifying employees as salaried non-exempt or hourly non-exempt; both of which also require that the employees receive overtime compensation for hours in excess of 40 hours per workweek. While employers may reduce the overall compensation of employees when reclassifying from exempt to non-exempt, such a reduction will likely result in reduced morale. Employers that elect to reclassify employees to non-exempt, instead of raising salaries, also must be sure that the employees record all time worked to comply with the FLSA’s recordkeeping requirements. 32

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The proposed regulations do not affect salaried or hourly non-exempt employees. Hospitality industry employers that elect to reclassify some positions to salaried non-exempt may want to consider using the “fluctuating workweek method.” That method provides for payment of a set salary to compensate the employee for all hours worked in each workweek and compensation for hours worked in excess of 40 hours (overtime) at a rate of one-half the employee’s regular pay rate. This method requires that: (1) the employee’s work hours fluctuate from week to week; (2) the employee is paid a fixed salary for all hours worked, whether more or less than 40 hours per week; (3) the fixed salary amount must compensate the employee for all hours worked at a rate not less than the minimum wage; (4) the employee must be paid an additional one-half of the regular rate for all overtime hours worked; and (5) the employer and employee must have a “clear mutual understanding” of the arrangement.

Proposed Regulations Should Not Impact Tipped Employees To the extent any employees impacted by the proposed regulations also receive tips, the regulations should not impact the current practices of employers with regard to such tips. Assuming the employee remains either salaried exempt or salaried non-exempt (meaning the tip credit is not an issue), then the employee would either be permitted retain all tips or required to participate in tip pooling/sharing. Interestingly, the Fourth Circuit in Trejo v. Ryman Hospitality Properties, Inc., 2015 WL 4548259 (4th Cir. July 29, 2015), recently held that the DOL’s tip pooling rules do not apply if the participating employees receive the full federal minimum wage. In other words, employers may elect to forego the federal tip credit and institute broader and more flexible tip pools. Employers should note, however, that the DOL strongly disagrees with this decision (the effect of which is limited to the states covered by the Fourth Circuit) and that many state wage statutes may be implicated by tip sharing/pooling arrangements.

In Conclusion The proposed regulations present another in a wide range of wage and hour challenges for the hospitality industry. While the hospitality industry has spoken out strongly against the proposed regulations as “bad for employees, bad for employers, and bad for the economy,” it appears highly probable that new regulations will be implemented. Predictions for the final versions of the regulations range from early to mid 2016, with compliance periods ranging from 60 to 120 days. Employers should take advantage of this opportunity to ensure that all positions are in compliance with the FLSA and prepare now for the changes to come.

Jennifer Hagerman, Attorney Burch, Porter & Johnson, PLLC jhagerman@bpjlaw.com www.bpjlaw.com

6th Annual

Human Resources & Employment Law Fall Conference Presented by: THE WEST TENNESSEE SOCIETY FOR HUMAN RESOURCE MANAGEMENT In coordination with: THE LAW FIRM OF RAINEY, KIZER, REVIERE & BELL, P.L.C.

Tuesday, November 3, 2015 Carl Grant Event Center, Union University 1050 Union University Dr., Jackson, TN 38305

Join us for an informative day where you will explore crucial HR compliance topics. Take advantage of our impressive showcase of HR-related exhibitors. Door prizes and more. Register Now!

PROGRAM: 7:30 am

Registration, Networking, and Visit Exhibitors

8:00 am

Welcome Dorothy and Toto too! We’re Not in Kansas Anymore! - FLSA/DOL Update Review of proposed new regulations affecting overtime and new independent contractor guidance which have the potential to greatly impact the workplace.

8:20 am

9:20 am 9:40 am

Flying Monkey’s Break and Visit Exhibitors Break Out Sessions A. There’s No Place Like Home: Employees In the Military Learn best practices when assisting employees in the military. B. Lions, Tigers, & Bears, Oh My! Union Avoidance Learn legal strategies to avoid unions in your workplace.

10:40 am 11:00 am

12:00 pm 12:50 pm

2:20 pm

Lollipop Guild Break and Visit Exhibitors Watch Out for Cyclones: Employment Law Update An informative review of recent federal and state legislation, regulations, and court rulings impacting HR that could blow you away. Munchkinland: Lunch and Visit Exhibitors Follow the Yellow Brick Road of Experience: Case Studies By applying employment laws to real life situations, using an interactive approach focused on case studies, you will learn to click your heels together and better apply legally defensible best practices in the workplace.

2:30 pm

Courage Break The Wonderful Wizard of HR “If I only had a brain!” Test your knowledge of general HR issues using the format of the Jeopardy television game show.

4:00 pm

Click Your Heels: Closing Remarks and Prize Drawings

www.HRProfessionalsMagazine.com

Meet Amy Dufrane Ed.D., SPHR, CAE, MBA

CEO of the HR Certification Institute Amy Schabacker Dufrane is CEO of the HR Certification

continues to grow and change. As a result, her vision

Institute (HRCI), where she focuses on developing

and goals for HRCI are focused on keeping pace with

collaborative long-term partnerships with individuals

the evolving industry and market demand.

and organizations looking to create and deliver change around human resources. HRCI’s portfolio of credentials

As the head of the organization that is the “engine”

for U.S. and global HR practitioners are respected and

behind the PHR® and SPHR® credentials, Amy has

recognized standards for HR mastery.

taken HR Certification Institute’s commitment to the delivery of best-in-class HR certifications, quality

Amy joined the HR Certification Institute in January

products and client relations to new levels. Connecting

2011 as Chief Operating Officer. In December 2012,

new certificants and professionals seeking recertifi-

she was named Interim Executive Director in addition to

cation with an expanded array of customizable, cost-

her role as COO. In 2013, she was appointed Executive

effective and interactive multi-media exam preparation

Director, and in September 2014 was promoted to

resources, publishing The Rise of HR e-book, releasing

CEO. Before joining HRCI in 2011, Amy spent more

the results of a large-scale value of HR certification

than two decades in human resource leadership roles

study, and paving the way for the certification of entire

at Municipal Securities Rulemaking Board, The Optical

workplaces through a global strategic partnership are

Society, and Marymount University.

just a few of the recent accomplishments.

As an undergraduate business management student,

Amy has been an adjunct faculty member at the

Amy happened to take a personnel management

Marymount University School of Business Administration

course and was required to do an internship. She chose

in Arlington, Virginia. She also serves on the advisory

to intern at Bloomingdale’s, where she worked in the

board of Columbia Lighthouse for the Blind and is a

executive office, public relations, visual productions

commissioner for the National Commission for Certifying

as well as a stint in personnel. She loved the impact

Agencies (NCCA). She is a recipient of the Leadership

that personnel had on the business so much that she

Non-Profit Award from HR Leadership Awards of

pursued and accepted a full-time position in Blooming-

Greater Washington. Dufrane holds the HR Certifi-

dale’s personnel department even though she was still

cation Institute designation of Senior Professional in

carrying a full course load as an undergraduate student.

Human Resources (SPHR®) and the Certified Association Executive (CAE) credential from the Center for

While there is a vast difference between what a

Association Leadership. Amy also holds a doctorate in

personnel department did 25 years ago and what the

education from George Washington University, an MBA

more mature, robust and complex HR function does

as well as a MA in human resources from Marymount

today, Amy is a strong believer that the profession

University, and a BA in management from Hood College.

www.HRProfessionalsMagazine.com

La b o r & E mp l oy men t Law S ec t i o n

Annual Seminar Friday, December 4 Holiday Inn University of Memphis

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Full day of prominent local and national speakers will get you up to speed on current issues in labor and employment law 7.5 Hours CLE 7.5 Hours HRCI 7.5 Hours SHRM Great networking opportunity Includes breakfast, lunch and cocktail hour

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H-1B Violations Costly to Healthcare Company By BRUCE E. BUCHANAN

aina Massey and Care Worldwide (hereinafter Raina Massey) has been found to have committed numerous violations related to two H-1B visa holders, according to a decision of an Administrative Law Judge (ALJ) of the Department of Labor (DOL). The ALJ ordered Raina Massey to pay a total of $291,000 to the two individuals.

Labor Condition Applications for Prospective H-1B Visa Holders In August and September 2009, Raina Massey offered to sponsor two job applicants, Wendolen Almonte and Rosalina Quilario, for H-1B visas for the positions of medical researcher and drug research associate, respectively. However, before Raina Massey would start the process for H-1B visas, it required Almonte and Quilario to pay an “immigration application fee” of $3,500 and $5,500, respectively. Thereafter, Raina Massey filed Labor Condition Applications (LCAs) offering to pay $49,000 to Almonte and $53,000 to Quilario. After the DOL approved the LCAs, the USCIS approved the H-1B petitions for the two individuals for about 2 years and nine months.

Raisa Massey’s Refusal to Work the H-1B Visa Holders Almonte and Quilario reported for work in February and March 2010, respectively, but both were not given the opportunity to start work. Instead, Raina Massey provided excuses at that time and thereafter on why they could not start employment. Even though, they never worked for Raina Massey, the company failed to terminate their employment or inform USCIS that they had been terminated and offered transportation home.

Basics of the Law Under the Immigration and Nationality Act (INA), in order to hire an employee for an H-1B visa, the employer must file a LCA with the DOL. The LCA must include that wages for H1-B visa holders are at least equal to the actual wage level paid by the employer to all other individuals with similar experience and qualifications, or the prevailing wage for the occupational classification in the area of employment, whichever is higher. An employer is required to pay an H-1B visa holder the required wage throughout the period stated in the LCA. The only two exceptions are: (1) when the H-1B employee is unavailable to work for reasons that are unrelated to his employment, such as leave taken at the request of the employee and not subject to payment under the employer’s benefit plan or a benefit statute; and (2) when the employer has effectuated a bona fide termination of the employment relationship. However, an employer must pay for nonproductive time - called “benching” - which can result from lack of available work or lack of the individual’s license or permit. In order to complete a bona fide termination under the H-1B program, the employer must notify USCIS that the employment relationship is terminated, and where appropriate, as in this case, provide the nonimmigrant employee with payment for transportation home. Under 8 C.F.R. §214.2(h)(4)(iii)(E), the employer is responsible 36

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for “reasonable costs of return transportation” to the employee’s last place of foreign residence, if the employee “is dismissed from employment by the employer” before the end of the LCA period.

ALJ’s Findings As previously stated, Raina Massey refused to put Almonte or Quilario to work after they reported for work. Thus, the employer engaged in benching and owes back pay for the period of the LCA. Furthermore, the employer never notified the USCIS of their termination nor offered to provide payment for transportation home. Both of these actions violated the law. Because they had no pay stubs from Raina Massey to prove their employment, they could not even extend their H-1B status. Additionally, Raina Massey violated H-1B regulations by forcing the employees to pay filing fees or “immigration application” fees totaling about $9,000.

Back Pay Owed The ALJ ordered Raina Massey to pay Almonte for the period of her LCA – mid-March 2010 to December 14, 2012. Thus, Almonte’s back pay equaled $134,750 plus pre-judgement compound interest and reimbursement of $3,500 in fees paid. Raina Massey owed Quilario for her LCA period of 2 years and nine and ½ months – totaling $147,958 plus pre-judgement compound interest. Finally, the employer must reimburse Quilario for $5,500 paid in application fees.

Takeaways This decision demonstrates a company should not file an H-1B petition for an employee unless there will be work available. If conditions change and no work is available, the employer should promptly terminate the employee and offer return transportation expenses. Finally, this decision reiterates an employer cannot charge filing fees to prospective H-1B visa holders.

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

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Reinventing HR: Educate. Motivate. Inspire. The Ever-changing Landscape of the Workforce

icture the workplace of years past. The room is filled with row upon row of desks. Employees are doing much the same work, processing documents and shuffling large amounts of paper. Now, picture today’s workplace. Technology has elimi-

nated the need for many people doing similar tasks. Work spaces are more open and collaborative. Employees work more in teams rather than individually. How the workforce is viewed now differs tremendously from that of the past. Employees are not viewed as an expense as they were when the economy was based upon agriculture and industry. Now, having progressed through the knowledge to the talent age, employees are viewed as assets to the organization. The evolving nature of the workplace requires adaptation of the HR professional.

The Evolution of the HR Profession Peter Cappelli, in Why We Love to Hate HR…and What HR Can Do About It (Harvard Business Review, 2015), provides the following overview of the evolution of HR. In the early 1900s, the HR function and profession was born. The need for workforce management (industrial and labor relations) became a necessity in the rapidly growing US economy. As the economy thrived in the 1920s, good workers were hard to come by and harder to keep, causing HR to induce supervisors to treat employees well. During the Great Depression years of the 1930s, HR became less critical and the profession lost some of its glamour. Supervisors favored the “drive” system of management, even to the point of threatening and hitting employees. HR was viewed more of a hindrance during this time. The image of HR changed after the Second World War, as the need to create new hiring and development programs became popular, and necessary. HR became a powerful component within organizations. However, many of the programs HR had developed in the 1950s were dropped in the 1970s as the economy slowed, and labor was plentiful. Even into the 1980s as the US was deep in a recession, workers were reluctant to leave their jobs, resulting in HR relegating hiring and development initiatives to managers. HR regained some of its glamour during the “dot com” boom of the late 1990s as the profession focused on hiring and retention of top talent. As the economy began to slow, and the effects of the Great Recession caused workers to not leave their jobs, HR once again began to lose its impact. Now, HR has to make a case for its existence, and fight to get a seat at the executive table. If anything, what the history of the evolution of HR as a profession indicates is that HR must constantly adapt to the ever-changing workplace. HR professionals simply cannot sit idly by and wait to see what impact the economy will have on the profession. The need for HR to move from a transactional-only part of an organization to that of a strategic advisor is well known. The ability of HR professionals to contribute at the executive level requires thinking beyond the transactional, and become more strategic in their contributions to the organization. 38

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By TRISH HOLLIDAY

Four Roles of the HR Strategic Advisor Becoming a strategic advisor within an organization requires attention to several key components. Trust is critical, but never easy to acquire and maintain. Certainly it begins with following up on commitments, being straightforward and honest, and showing integrity in all matters. The roles of HR strategic advisors can be presented briefly in four broad categories, each with its own specific responsibilities. The first category is that of a subject matter expert. This category requires in-depth experience and understanding of the human resource body of knowledge. Responsibilities pertaining to this category are providing timely, accurate, and consistent internal and external data on talent, the workforce at large, and external trends related to defined performance objectives. The ability to define standards to ensure consistency in practices across the organization, including communicating legal and cultural implications of practices that impact the workforce, require HR professionals to keep current in the legal and business arenas. The second category for HR strategic advisors is to be a problem solver. It is easy to point out the problems, but to be prepared to assist the organization by seeking solutions through an understanding of the organization as a systemic whole raises the trust factor for HR professionals. Important responsibilities in accomplishing this category are connecting data and practices to the organization’s goals, challenges and opportunities; explaining long-term impact

(including risks) of decisions and workplace practices; and actively listening to executive leadership to discern their real issues and concerns. A third category is to be an internal consultant. This role places HR professionals in a position to function as a consultant within the organization. Such a role requires that HR recommends strategies in the context of unique situations, not just “HR best practices.” HR professionals need to be able to put issues into perspective, looking at those issues from a fresh point of view. An internal consultant can act as a resource to the executive leadership regarding recommendations unique to the organization. A final category in HR becoming a strategic advisor is functioning as a partner within the organization. This function provides an opportunity for HR to intervene with others in the organization to collaborate and produce strategies designed to achieve stated goals. In this capacity, HR serves as an executive coach on human resource issues, working with others to identify management goals for the organization and collaborating with the executive leadership to ensure the success of initiatives. The categories discussed above require HR professionals to think more strategically about the organization and how HR can contribute to assisting in accomplishing the mission and goals. Understanding the organization’s business, not just HR business, helps build credibility with executive leadership. In a study reported in The Chief HR Officer: Defining the New Role of Human Resources Leaders (2011), where Chief Human Resource Officers spend their time was presented. The top four areas where their time was spent were as a functional leader, strategic function, talent architect and executive coach. These areas cover the transactional, talent acquisition, advising and coaching roles for HR professionals.

Reinventing HR

by truly understanding how the organization functions. Such business savvy goes beyond just knowing the organization’s culture, but understanding the business world that it operates in. As the HR profession has moved from serving only the transactional needs of an organization, and now becoming more of a strategic partner, the next step is to think seriously about how HR will reinvent itself. No longer can the profession simply respond reactively to the ever changing and volatile economy, HR professionals must be proactive in educating leadership and managers on the expertise they bring to the organization. HR truly owns the “people agenda” of an organization. HR can reinvent itself by motivating leadership by showing how it adds value to the organization. Collecting and analyzing the right data that indicates the impact HR has on the business. Finally, by becoming more business savvy about the organization, both internally and externally, HR demonstrates it is more than just there to make people decisions, but can make those decisions in reference to how the organization will be affected. Today there is a lot of talk about the future of HR. Some of it is encouraging, and some less so. Still, all organizations have people, and the one profession that is all about the people of the organization is HR. A reinventing of the profession provides an opportunity to once again show that not only is HR a critical strategic advisor and business partner to executive leadership, but a glamorous profession!

Trish Holliday, SPHR Assistant Commissioner and CLO State of Tennessee Department of Human Resources

HR professionals need to improve both the impact and the credibility of the HR function as a whole if it is to influence the executive level regarding the people agenda of the organization. HR can’t use an old map to find a new route – it must reinvent itself. The following are some changes Dave Millner in Show Some Resilience: We can and will change old perceptions of HR (HR.com, 2015) offers that can help make the reinventing process more transformational.

Educate One change is to educate leadership on effective people practices. HR has considerable thought leadership expertise and needs to educate leaders on which tools will ensure top talent is acquired and retained; initiate the most effective development programs; and identify the benefits packages that will motivate employees to higher performance. These all need to be based upon a foundation of clarity as to who owns the people agenda and the respective roles management and HR have to play.

Motivate Another change HR can consider is to motivate executive leadership to see the added value that HR brings to the organization. HR has always struggled to consistently demonstrate that it adds value to the organization and provides a real competitive advantage. This requires using the right data gathered from measuring the key elements that are seen to add value and return to the organization. HR can motivate executive leadership to see the critical role it has in the organization, and what the return on investment it can provide.

Inspire A final change is inspiring leaders to view HR as a thought leader on effective people practices. It is more than just changing what HR calls itself, but actually changing the way HR operates and contributes to the organization

PERFECT ALIGNMENT. Relationship. Reliability. Respect. At the center of our Employee Benefits and Labor & Employment practices.

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Easing the Employer’s SIMPLIFIED Cost, Quality Burden ANALYTICS: in Healthcare By HEATHER LAVOIE

After payroll, health care benefits are the single largest expense for most employers. The costs are staggering, and most employers largely fly blind in terms of knowing the detail behind the numbers and being able to effectuate change. Until now.

HEALTHCARE PREMIUM OVERLOAD In the decade leading up to 2014, Kaiser Family Foundation research revealed that the average premium for family coverage increased 69%. In 2014, average annual premiums for employer-sponsored family health coverage reached $16,834, and 20% of family plans were at least $20,201. More recently, the National Business Group on Health (NBGH) surveyed their membership of large employers and reported that their members expect a six percent increase in health benefit costs in 2016. Employers attribute rising costs to specialty pharmacy, specific diseases or conditions, and overall medical inflation. For 43% of employers, the number one cost driver is high cost claimants.

EMPLOYER SELF-FUNDED PLANS & THE COST CURVE Most large employers and increasing numbers of medium and smaller employers self-fund their health benefits. Traditional fully insured benefit plan membership dropped by more than 10% from September 2013 to September 2014, and today more than three in five companies are self-insured. Employers primarily choose self-funded plans - also known as administrative services only or ASO - because they are said to offer greater control over cost-containment. In contrast to their fully insured counterparts, self-funded employers have the flexibility to make benefit and plan design changes such as shifting employee cost-sharing arrangements, implementing incentivized wellness programs, identifying case and 40

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disease management intervention opportunities, and more. Typically they also have access to more reporting and claims detail to inform plan changes and strategies for mitigating cost increases. Yet as evidenced by the recent survey of NBGH members, even ASO employers have had limited success in impacting the cost curve. Not for lack of trying, however. Even for the largest employers - like Intel who led a multi-year effort to collaborate with physicians, hospitals, health plans, and other employers to reduce clinical and administrative costs by applying supply chain management best practices – health care information was primarily limited to claims expenses that hit as much as three to four months after the medical event. Until now.

REPORTING TO TRACK COST AND QUALITY The savviest employers and employer coalitions are just beginning to make full use of the same analytics and insight platforms that hospitals and physician practices are using to manage the quality and cost of their patients in accountable care organizations and other risk-based contacts. These robust reporting platforms integrate all of the information now available to hospitals and physicians – claims, utilization data, and clinical information and outcomes such as hospital admissions, lab results, and medications with benefit information and patient-generated data including Fitbit activity and consumer purchasing behavior - to create a near real-time holistic view of the employee. This view draws from the same information that informs the clinician perspective on the employee but is customized and appropriate to the role of employers and human resources personnel and presented in easy-to-understand dashboards. These leading-edge reporting platforms enable employers to participate more fully in improving the cost and quality of employee health. Employers now have the information necessary

to make informed decisions about the effectiveness of their health insurance plans for their employees as a whole – whether they are selffunded or fully insured – as well as measure the plan’s efficacy in managing the quality and cost of health care for specific employee populations such as diabetics and high cost claimants, who are thought to be one of the primary drivers in increasing health care costs. Far too often, the care for high cost claimants – those with more than $100,000 in claims expenses – lacks coordination and patient engagement; in many cases, these patients are ‘frequent fliers’ in terms of emergency room visits and hospital admissions but are not regularly seen by their primary care physician. Today’s analytics platforms cost-effectively yield this information as well as insights into which hospitals and physicians deliver the best quality and cost outcomes, and perhaps most importantly, present it in a way that existing staff, rather than analytics experts, can use the data. Employers empowered with this kind of information can more successfully partner with health plans, hospitals, and physicians to meet quality and cost goals, and also help employees navigate their way to improved health.

H EATHCARE COST IMPACT TO BOTH EMPLOYERS AND EMPLOYEES More than ever before, employees are looking to their employers for guidance. Like employers, they, too, are spending more money on health care. Premium contributions, deductibles, and co-insurance have all increased. In 2014, workers on average paid $4,823 annually toward premiums for family coverage and $1,081 toward the cost of worker-only coverage. Deductibles are also rising with the average deductible reaching $1,217, up 47% since 2009. To contend with increasing health costs, most employers have had little choice but to ask their workers to pay more – and that means that employees too need insights and information into how to maximize the effectiveness of their health care dollars and are a ready audience for the insights provided by today’s robust reporting platforms. It’s a fortuitous and exciting time. For the first time, innovative analytics and insights platforms are finally able to match employer and employee desire for the detailed information necessary to make timely, informed, and personalized health care quality and cost choices.

Heather Lavoie, COO Geneia HSLavoie@Geneia.com www.geneia.com

Presents the 6th Annual

H e a lt H c a r e Summit The Business of healThcare Cost • ManageMent • Planning

Presents the 6th Annual

a lt H c a r e Summit

~ Save the Date ~

t u e s d ay, O c t O b e r 13 , 2 0 15 8:00 am - 2:30 pm

e Business of healThcare 1

st • ManageMent • Planning

mississippi cOllege

Clinton Campus Anderson Hall

The Mississippi Healthcare Reform Summit brings together national healthcare experts and key state leaders in government and business to address the most pressing topics businesses face in managing healthcare programs and costs. Summit participants will hear directly from our state’s policy makers, medical leaders and corporate professionals on the leading edge of the changes Save the Date sweeping through our state’s healthcare system. ~ ~

e s d ay, O c t O b e r 13 ,4 2 0 15 8:00 am - 2:30 pm

mississippi cOllege

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ealthcare Reform Summit brings together national healthcare 7

tate leaders in government and business to address the most

1 Murray L. Harber, Executive Director of MSBGH; with Billy Sims, VP Human Resources at Southern Farm Bureau Life and President of MSBGH. 2 Marcelo 3 Chris Goff, CEO, & General Counsel, Employers Health, speakingfrom on “Using Data to policy Managemakers, Health and Wellness Programs.” 4 Kent Adkisson, Regional VP of Marketing, Product & Innovation with United ants will hear directly our state’s medical Healthcare spoke on “Consumer Engagement.” 5 Fantastic attendance at the 6th Annual MSBGH Healthcare Summit. Attendance has grown from 75 orporate professionals on the leading edge ofpanels the changes the first year to 240 in 2015! 6 Employer at the MSBGH. (L-R) Billy Sims VP HR Southern Farm Bureau Life Insurance; Lorie Larson, Sr. Manager of Benefits at Levi Strauss & Co.; Murray Harber, Executive Director of MSBGH; and Ed Hager, Manager of Compensation, Benefits, & HRIS at Ingalls weeping through our state’s healthcare system. Shipbuilding. 7 Timothy H. Moore, President & CEO of Mississippi Hospital Association, speaking on “The Future of Health Care in Mississippi. 8 Scott E. Conard, Corporate Healthcare Strategist with Converging Health, was a speaker on population health management. 9 Annette Low, MD, Medical Director of Transformations – A Comprehensive Weight Management, Metabolic and Bariatric Center. She spoke on Obesity: An Employer’s Concerns and Opportunity. 10 Gregg Harper, U. S. Representative for Mississippi’s 3rd Congressional District was the keynote luncheon speaker.

businesses face in managing healthcare programs and costs. Eduardo, PhD, Dean of Mississippi College School of Business welcomed attendees to the Summit.

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Audit Quality Study Signals Changes Ahead for Employee Benefit Plans By LINDA LAUER

early 4 in 10 employee benefit audits in the 2011 plan filing year failed to meet regulatory standards, a recent Department of Labor (DOL) study revealed. Employee benefit plans (EBPs) that receive a deficient audit run the risk of fines and penalties for noncompliance.

The fact that audit quality hasn’t improved during the past 20 years makes it likely that EBP audit quality will be a focal point for regulators moving forward. Organizations should examine the results of 2014 Study carefully to look for the areas that will be the key targets for modification.

The Department of Labor’s Employee Benefit Security Administration (EBSA) conducted the study as part of its ongoing monitoring of employee benefit plan audit quality for plans subject to the Employee Retirement Income Security Act of 1974 (ERISA). EBSA’s 2014 Study reflects a statistical analysis of 400 financial statement audits of benefit plans subject to ERISA. Plans in the 2014 Study received their EBP audits from 232 accounting firms. Approximately 39% of the 400 audits failed to meet at least one professional standard, and 17% of audits failed to comply with one or more ERISA reporting and disclosure requirements.

Most of the deficiencies uncovered by the study fell in EBP-specific reporting areas such as contributions, benefit payments, participant data and prohibited transactions.

Findings from the study indicate that EBP audit quality continues to be a challenge. The 2014 Study’s noncompliance rate is the highest it’s been since EBSA started conducting audit quality studies in 1988. In 2004, when a previous study was published, the noncompliance rate was 33%. 42

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Areas of Noncompliance

As part of its analysis, EBSA also examined how the size of the accounting firm performing the EBP audit affected audit quality. It broke the audits into stratum based on the number of EBP audits the accounting firm conducting the EBP audit performed each year. Firms that performed two or fewer EBP audits per year had the highest EBP audit deficiency rates at 76%. More than half of EBP audits in that stratum (56%) had five or more major generally accepted auditing standards (GAAS) deficiencies. Deficiency rates decreased as the number of audits increased. Firms that provided between 100 and 749 EBP audits per year had deficiency rates of 12%. One in three EBP audits had five or more deficiencies.

Member firms of the American Institute of Certified Public Accountants (AICPA)’s Employee Benefit Plan Audit Quality Center (EBPAQC) fared better in the 2014 Study than non-members. The audit deficiency rate for nonmembers was 82.3%. EBPAQC members had a 30% audit deficiency rate. On average, EBPAQC member firms also had fewer audits with multiple GAAS deficiencies.

scope audits in the 2014 Study contained audit deficiencies, and as a result, EBSA is recommending changes to the limited scope reporting process. Currently, CPAs do not issue an opinion on financial statements for assets held by regulated entities (often financial institutions) in a limited scope audit. In the 2014 Study, EBSA recommended a repeal of the limited scope exemption.

Changes Coming The 2014 Study has ramifications for everyone involved with benefit plan financial statements and will undoubtedly trigger changes to the EBP reporting process. Staying on top of these changes will be critical for your future benefit plan compliance.

Linda Lauer is a Lead Managing Director in the Memphis office of CBIZ & MHM, where she also serves as Co-Attest Practice Leader and the leader of EBP audit practice. Linda has more than 25 years of experience with accounting and employee benefit plan administration. She previously served as the Manager of Retirement Administration for FedEx where she oversaw plans for more than 200,000 participants.

Response from the Regulators EBSA recommends that in light of the 2014 findings, enforcement efforts should target CPA firms with small EBP audit practices that audit EBPs with large amounts of plan assets. Firms that performed between 25 and 99 audits per year had audited financial statements that accounted for roughly $317.1 billion of plan assets and had a 41% audit deficiency rate in the 2014 Study. The 2014 Study also proposes several changes be made to ERISA. One would be to expand the definition of qualified public accountant to include additional requirements EBP auditors must meet. EBSA would also like to have the power to establish accounting and auditing standards that are specific to EBPs or have a substantial effect on them. Currently, accounting standards for EBPs are established by the Financial Accounting Standards Board (FASB) and auditing standards for EBPs are established by the AICPA.

Implications for Plan Sponsors Responsibility falls to the plan sponsor to verify that both their plan reporting and the audited financial statement are complete and accurate. Plan sponsors can end up with fines if the DOL finds that work contains GAAS deficiencies. As accounting firms and regulators double down on their efforts to improve quality, plan sponsors should be evaluating the quality of their plan auditor. In addition to how well their accounting provider meets the indicators of EBP audit quality—high number of EBP audits performed per year, member of the EBPAQC, etc.—plan sponsors should also be considering the likely areas for DOL scrutiny. For example, accounting firms that handle large amounts of assets and perform fewer than 25 audits per year will likely be under the DOL’s magnifying glass in the coming years based on the recommendations EBSA made in its report. Plan sponsors may find if their auditor falls in that stratum, their EBP audit is more likely to be subject to review by the DOL.

Linda Lauer Lead Managing Director CBIZ & MHM llauer@cbiz.com www.cbiz.com

Real world solutions to your employee benefits needs. The world of employee benefits is COMPLEX. At Kiesewetter Law Firm, we understand this complexity. And we’re here to help. We are a boutique law firm that focuses on employee benefits, executive compensation and health care regulatory compliance law. From the day we opened our doors, our focus has been and will continue to be the same— to solve complicated legal issues in collaborative, comprehensive and creative ways while being client driven and cost-effective. Interested in working together? Give us a call.

Consideration should also be paid to the type of EBP audit received. If the plan currently elects to do a limited scope audit, now may be the time to consider doing a full scope audit. Close to 60% of the limited www.HRProfessionalsMagazine.com

people who have low self-esteem that they can easily control and manipulate. If they find they can’t control you, they will quickly lose interest and move on to easier pickings.

Toxic types to stay clear of at work By HARVEY DEUTSCHENDORF

“When dealing with people, remember you are not dealing with creatures of logic, but with creatures of emotion, creatures bristling with prejudice, and motivated by pride and vanity.” ~ Dale Carnegie ~ We would all love to surround ourselves with people who are supportive and inspire us to become the best that we can. Virtually every successful person will stress the importance of surrounding ourselves with these types of people. Unfortunately there are people out there who will have the opposite effect. These people have been called many things; toxic, energy vampires or worse. If we are fortunate or strong enough we have either managed to avoid them or have removed them from our lives. However, in the workplace we often have to work with people who we would otherwise give a wide berth to. While this is often unavoidable, our ability to recognize these people will help us minimize our time and interaction with them. Here are 7 types that you need to stay clear of or limit your time around:

Perpetual Victims These are people who are always blaming others for their problems and never take responsibility for their own actions. They contribute their lack of success to the fact that others, situations or events, have conspired against them. They see other’s success as a result of having opportunities and advantages that they never had. Being around these people can become a downer very quickly.

Chronic Complainers Complainers never seem to be satisfied unless they have a person, circumstance or situation to oppose. They have an innate ability to pick out the negative in any situation and have no hesitation pointing it out to you or anyone else that will listen. They love to hang out with other chronic complainers and if they don’t join them in their complaining efforts, they will quickly move on to find more fertile ground. These people will quickly drain the energy out of you if you aren’t able to get away from them.

Control Freaks Control freaks have a need to be in charge in every situation they are in. If they are not able to do so, they quickly lose interest and move on to environments where they can be in charge. They love to find needy 44

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Envious and Jealous Types These are the types of people that will quickly voice a negative opinion whenever the topic of anyone’s success comes up. Often frustrated by achieving what they feel is due in their own lives, the success of others bothers them as it points out their own inadequacies. If you are forced to be around these types due to work or family situations, never share your achievements or dreams with them as they are sure to want to rain on your parade.

Gossips Eleanor Roosevelt said, “Great minds discuss ideas, average ones discuss events, and small minds discuss people.” Gossips are the small minds that seem to be in their element and comfort zone discussing people. Often their talk is malicious and they seem to get great pleasure out of the misfortunes of others. These are not people that have passions or goals that they are striving for or have a broad range of interests in the world around them. They have a tendency to interact with others who also have limited interests in the big world around them. Gossips tend to make up information about people that they know little about that will not participate in their sessions. Don’t be surprised to hear things about you that have been fabricated. By ignoring them or laughing off what they say you will keep them from wasting any of your energy.

Seriously Judgmental Types We all have our preferences and judgements but seriously judgmental people take theirs to an extreme level. Judgmental types see the world as black and white, right or wrong. There is little room in their world for opinions and viewpoints that differ from their own. You are either on their side, or against them. They often lack or have a limited sense of humour. If they do use humour, it is often of the sarcastic and cutting type, aimed at those who differ in their opinions or outlook from them.

Arrogant Types In almost every workplace there is someone who feels they know more than you do, or can do everything better than you do. If there is something that you can do better they will view it as not as important as something that they are good at. Arrogance is quite different from self-confidence. Truly self-confident people are not threatened by the achievements of others and do not feel the need to belittle or put them down. Arrogance is a way to cover up feelings of lack of confidence and insecurities. Being around arrogant people will feel like a constant struggle as you will feel that everything you do will be judged as being less than good enough.

Harvey Deutschendorf is an emotional intelligence expert, author and speaker. To take the EI Quiz go to theotherkindofsmart.com. His book THE OTHER KIND OF SMART, Simple Ways to Boost Your Emotional Intelligence for Greater Personal Effectiveness and Success has been translated into 4 languages including Chinese. You can follow him on Twitter @theeiguy.

Employment Law FAQ: Best Practices and Strategic Leadership for 2015’s Hot Issues in HR The Association for Women Attorneys and HR Professionals Magazine are joining forces to present a half-day seminar inspired by some of the more frequently-asked HR questions that have come up a lot this year: Employment Law FAQ: Best Practices and Strategic Leadership for 2015’s Hot Issues in HR. The seminar will take place on Thursday, December 17, 2015, from 12:30-4:30 pm at the Crescent Club. Maureen Holland of Holland & Associates, P.C. represented three of the same-sex couples who were a part of the U.S. Supreme Court’s decision in Obergefell v. Hodges. Even before Obergefell, employers have been faced with tricky dilemmas regarding transgender employees, particularly with respect to workplace facilities. After Obergefell, those dilemmas remain, and the Supreme Court’s holding presents additional considerations with respect to discrimination on the basis of sex. On December 17, she will speak on the current laws with respect to the rights of transgender employees and best practices for employers in handling these issues. The Obergefell decision has also raised questions regarding religious accommodations in the workplace. James H. Stock, an experienced management-side attorney with Jackson Lewis, P.C., will discuss the extent to which employers are obligated to accommodate the religious beliefs of its employees. In addition, Mr. Stock will speak on the ethical considerations that attorneys may face in similar circumstances. John Russell of Lawrence & Russell, PLC will discuss employers’ duty to provide reasonable accommodations under the ADA. Additionally, Cynthia Thompson of the Thompson Firm, LLC will provide guidance on enhancing strategic leadership skills to help position HR professionals as effective strategic business partners in their organizations. The AWA is a bar association that is dedicated to supporting female attorneys through education, mentorship, leadership, and outreach—the Memphis chapter was founded in 1979. AWA is committed to the welfare of its members and the sustained presence of female leadership in the legal realm.

The AWA is a provider of continuing legal education with a particular focus on legal issues that relate to women or gender. For instance, earlier this year, the AWA provided a half-day seminar on employment law issues that relate to gender, such as pregnancy discrimination, marriage equality, and the science of implicit bias in employment law cases. The organization also provided a seminar on family law issues that affect women, with a particular focus on alimony. On November 19, 2015, the AWA will host a panel discussion on bridging the gap between being a lawyer and being a candidate, inspired by its mission to bolster the presence of female leadership in the community. The workplace continues to be an important battleground for women’s issues, and continuing legal education on gender issues in employment law is an important element in supporting women in the workplace and bolstering their careers. The upcoming Employment Law FAQ seminar is the first of what is sure to be more collaborations to create programming that provides valuable tips, strategies, and timely legal updates in employment law to both attorneys and human resources professionals to enhance their effectiveness in the workplace.

CLE Employment Law FAQ: Best Practices and Strategic Leadership for 2015’s Hot Issues in HR On June 26, 2015, the United States Supreme Court made history by holding that the fundamental right to marry is guaranteed to samesex couples. In the months since the decision, employers have had to grapple with new dilemmas in the workplace, such as the rights of transgender employees, and accommodations for employees’ religious beliefs and disabilities. Join us for an in-depth discussion of these issues as well as strategies for enhancing your strategic leadership skills as a human resources professional. Speakers: James H. Stock, Jackson Lewis, P.C. John M. Russell, Lawrence & Russell, PLC Maureen T. Holland, Holland & Associates, P.C. Cynthia Y. Thompson, SPHR

3.8 CLE general credits TN, MS, AR pending This seminar is being certified for SHRM and HRCI credit.

December 17, 2015 12:30 - 4:30 pm

cocktail reception following

The Crescent Club

6075 Poplar Ave #909 Memphis, TN 38119

$90 attorneys, $80 AWA $45 HR professionals

How to Succeed in HR Without Really Trying:

Going from New Professional to Pro BY CLIFFORD STEPHAN

Recently, I started thinking back to my first position and career choices that took me from entry level to founder of my own consulting firm, and I realized something…I shouldn’t be where I am today. You see, when I got my first position in HR about fifteen years ago, the typical career path for a young professional in HR was to keep your head down, put in at least a few years in one position, and slowly make your way up to the next “reasonable” position. Maybe within ten years, you might be a manager. The problem was, I was starting at the bottom, and I didn’t have the patience for the traditional path. Instead, I decided to take a lot of risks and move quickly. Thinking back now, I wondered, could anyone leverage a basic HR position into something bigger and better in just a few years? Absolutely. While my path isn’t the only (or the best) way to do it, I do think that there are a few ways that a young HR professional can accelerate his or her career, and have a lot of fun doing so.

Getting started in HR…even if you’re not sure where you’re going The great thing about HR is that there are multiple career paths and specialties available, even from a basic starting point. Especially for the millennial generation, this is good news. A Forbes article from August 14, 2012 [http://www. forbes.com/sites/jeannemeister/2012/08/14/job-hopping-is-the-new-normalfor-millennials-three-ways-to-prevent-a-human-resource-nightmare/] reported that younger generations of workers tend to stay in positions for about two years—in large part because they are motivated to find positions that are interesting to them. Especially if you’ve just landed in the HR industry, it’s a great place for someone who may not be sure of her or his dream job yet, but is excited by exposure to a lot of different aspects of an organization. Getting that first position in HR may seem like you’re low on the ladder, but it is a fine first step, and a great position to start identifying the aspects that are most interesting and fulfilling to you. For one, you’ve got a starting point, a place to get some exposure and learn how an organization works. But your greatest advantage is that you can (and should) meet everybody! Using your status as the “new kid” gives you a lot of excuses to ask questions, be curious, and learn a lot of different positions. Take the advantage to meet everyone on your team in the HR department, but think bigger than just HR. Being in HR means that you have easy access to people in other departments—for example, you’re going to find a lot of natural allies in finance and legal, just as a starter. The more people you meet, the easier it will be to quickly leverage yourself into the next position. Of course, you may be pigeon-holed and labeled because you’re just a “coordinator” or “assistant” or a “level 1 analyst,” and the longer you stay in this position, the harder it can be to break out of it. But achieving liftoff from there only takes a little time, strategy, and creativity to take your career to the next level. 46

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Bend and stretch: Anticipate the next move before it happens Bending and stretching is not just for the gym—it can do wonders for your career. Extending yourself beyond the day-to-day of your job can help you learn about new opportunities and can help you get ready faster for the next one. Push yourself to meet people within all levels of your HR organization, whether it’s compensation, recruiting, benefits, or HR systems. Every part can teach you something about how HR works, and where your best fit may be. The more people you meet, the more you’ll get to know your options, and the more you’ll learn how your skills and personality can be a great fit for different aspects of HR.

Get beyond your own job description One of my key pieces of advice for new HR professionals is “manufacture experience.” Everyone has a job description, but that doesn’t mean you can only do certain things. Getting a resume that’s going to help you get the next job means learning what happens at the next level, not just doing what’s required of your position. Learn to find those opportunities where you can learn more or get an inside look at a more advanced position. For example, you may ask to assist with an annual salary survey participation and help out with candidate interviews. See if you can sit in on meetings or presentations, “just to learn a little more.” With enough exposure, it’s perfectly reasonable to then say on your resume “assisted with job surveys…” or “experienced with job search process and on-boarding.” Just as soon as you start getting this new exposure and skillset, start looking for opportunities internally or externally to wash off that entry role and move on up to bigger challenges (and a bigger paycheck)! There’s no reason to think that you need to “do the time” if you’re a good fit for the next level. In the worst case, you won’t be hired, but getting to that next level will happen a lot faster the harder you push for it.

Above all, hone those people skills That’s right—hone those people skills. Getting ahead fast means being a likeable people-person, and I’m sure that’s not a surprise to you. Cliché as it may be, nothing’s going to be more helpful to you as you position yourself for those jobs that may be beyond your experience, but are within your reach because you are known and you are liked. Being open, eager, and friendly will get you mentors, allies, and raving fans. While there are lots of different ways to carve out your own path in HR, don’t hesitate to step on the gas pedal and push yourself. With a drive for new experiences and an eye on the next level, moving up the pay grade and onto an exciting career shouldn’t take too long at all.

Clifford Stephan, Principal One Compensation Clifford@onecompensation.com www.onecompensation.com

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