HR Professionals Magazine by HR Professionals of Greater Memphis Magazine

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Volume 1 : Issue 4

www.HRprosMemphis.com

2011MemphisArea

WAGE SURVEY

Preparing FOR THE RECOVERY

EMILY GREER Moves to the C-Suite

Crack Down on Employee Misclassifications DODD-FRANK ACT CEO COMPENSATION

LILLY LEDBETTER

FAIR PAY ACT

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From right here, one of the biggest on the job anywhere.

The largest law firm in the Mid-South that devotes its practice to representing management in all areas of labor relations, employment law and human resource consulting

Kiesewe er Wise Kaplan Prather, PLC 3725 Champion Hills Drive • Suite 3000 • Memphis, Tennessee • 38125 • 901-795-6695 • www.kiesewe erwise.com Cer fica on as a labor and employment specialist is not currently available in Tennessee.

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Contents

Human Resources & Management Expertise

3% AVERAGE BASE PAY INCREASE IN 2012 according to a Mercer survey

www.HRprosMemphis.com Editor Cynthia Y. Thompson, MBA, SPHR Publisher The Thompson Firm LLC

Features 4 5 6

Letter from the Editor Profile: Emily Greer HR Professionals as Compensation Managers

7 8 12 14

Employee Misclassification Wage and Hour Laws Apply to Holiday Workers 2011 Memphis Area Wage Survey the HR Scene and Events Calendar

HR Consulting and Employee Development

Art Direction Brantley Bowden & Co.

Contributing Writers Austin Baker Jennifer Blake Charles W. Cavagnaro, Jr. V. Latosha Dexter, SPHR John E. Gnuschke, PhD Jonathan C. Hancock Whitney M. Harmon Amber Isom-Thompson Lisa L. Leach Faye Lott Richard L. Reinhardt Keith Warren Contributing Photographer Creations Studios Photography and Videography Board of Advisors Austin Baker Jonathan C. Hancock Ross Harris, CFO, CFA Diane M. Heyman, SPHR John E. Megley III, PhD Terri Murphy Susan Nieman Robert Pipkin Michael R. Ryan, PhD

Contact HR Professionals of Greater Memphis: 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.HRprosMemphis.com. We do not accept unsolicited manuscripts or articles. All manuscripts and photos must be submitted by email to Cynthia@HRprosMemphis.com. Editorial content does not necessarily reflect the opinions of the publisher, nor can the publisher be held responsible for errors. HR Professionals Of Greater Memphis Magazine is published every month, 12 times a year by The Thompson 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 Of Greater Memphis Magazine, its contributors or advertisers within are not responsible for misinformation, misprints, omissions or typographical errors. © 2011 The Thompson Firm This publication is pledged to the spirit and letter of Equal Opportunity Law.

Compensatory Time Off

Departments

Columns

EEOC Update

Book Look

Compensation

SHRM-Memphis Bulletin

Leadership

20 21

NLRB Pro-Union Trend May End

Meet the WT SHRM Board Mid-South Compensation Association Who’s Who?

Small Biz Best Practices

Lilly Ledbetter: An Area of Uncertainty Preparing for Recovery Doug Stanton Speaks to L & P Breakfast Club

December 31

Advocacy

FLSA No Longer Relevant

Performance Management

Dodd-Frank Act

Employee Handbook Tips

& Its Impact on CEO Compensation

Digital Assassination by Mark Davis and Richard Torrenzano TN Educate and Employ Act

Meet the SHRM-Memphis Board

TN Workers’ Comp Update

Industry News 6

Breaking News TN, AR, MS

Next Issue Staffing and Recruiting

to the RSSFEED

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stay current Follow Us! www.HRprosMemphis.com

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a note from the Editor

Here we are approaching the end of another year. If you are like me, you are making lists and wondering what gifts to buy all the special people in your life. And maybe like me you are reflecting on the past year and wishing you had done some things differently. Perhaps there are friends or relatives you have neglected because you have simply been too busy with your work. Perhaps like me, you have lost loved ones that you wish you had spent more time with. There is something very positive you can do that will make a difference in someone’s life. For me and most HR professionals, the greatest joy in our profession is that we can absolutely make a positive difference in someone’s life every day – whether it is approving someone for hire, approving a much needed leave for an employee who is a caregiver for a loved one, or helping a manager resolve a disciplinary issue. But for everyone you have helped, there are probably others in your life you have overlooked or neglected. Why not take the time right now to make a donation to the SHRM Foundation in honor of that loved one who passed away, or that special person you wanted to help, but just never had the time? If you are a member of the Society for Human Resource Management, you know how important the SHRM Foundation is to our industry. The SHRM Foundation is the 501(c)(3) non-profit affiliate of SHRM. A leading funder of HR research grants, the Foundation produces publications and educational resources to advance the HR profession. Their work is made possible by your generous tax-deductible donations. Over the past three years, the SHRM Foundation has awarded more than $1.8 million in grants to fund rigorous, original academic research with practical implications for HR management practice. The SHRM Foundation also awards $170,000 annually in education and certification scholarships to professional and student SHRM members, and doctoral students. As an HR professional, we have all benefited from the work of the Foundation. Come on and join me in making a donation in honor of all those loved ones we neglected this year or in honor of someone who made a difference in your professional life. Here is a link that will show you the many ways you can donate: http://www.shrm.org/about/foundation/contributions/Pages/default.aspx. It’s the season to give back. Who knows, maybe someone will make a donation in your honor.

Cynthia Y. Thompson | Editor cynthia@HRprosMemphis

www.HRprosMemphis.com

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on the cover

EMILY

GREER Moves to the C-Suite

Emily with husband Jarvis who is the WMC TV Sports Anchor. Emily and Jarvis have two children. eir daughter McKenzie earned her degree in psychology om the University of Memphis in 2008, and their son Jarvis Junior “JJ” is a junior at the University of Memphis and plays on the soccer team.

Rick Shadyac, CEO of ALSAC, the fundraising organization of St. Jude Children’s Research Hospital, says Emily is a top professional in her field and is incredibly respected. During her 18 years at ALSAC, Emily helped build a team that has attracted the most talented fundraisers in the world to the organization, which is the second largest healthcare charity in the United States, according to the Chronicle of Philanthropy’s Philanthropy 400 list. It costs $1.7 million a day to operate St. Jude, and the ALSAC team raises 75% of the funds needed to run the hospital. Emily was named Chief of Staff at ALSAC in April 2010, building on her 25 years of experience in human resources, retail management and corporate administration. Prior to that promotion, Emily had served as Senior Vice President of Human Resources at ALSAC. As she emerged as a leader in the organization, Emily was challenged to get “outside her box” in human resources, which led her to obtain her MBA through the Executive MBA program at the University of Memphis in 2006. At the U of M, Emily received the Dean’s Award for Academic Excellence and was inducted into Phi Kappa Phi Honor Society. Emily also has a Bachelor of Science degree in marketing and management from Christian Brothers University and graduated cum laude. When asked about her greatest challenge as an HR Executive at ALSAC, Emily cited management training. However, following completion of her MBA, she was able to start an in-house comprehensive training program for managers that lasts anywhere from six months to a year and a half. As a result of this program, most of the managers hired at ALSAC have remained, and the program has become a great retention tool for the organization. Emily’s advice to HR professionals who aspire to grow as a top executive in your organization is to grow outside of human resources by getting involved with other projects such as representing your organization for external projects and interfacing with other organizations. Emily is grateful for the growth opportunity that Rick provided her and strives to be a good reflection of him as she represents ALSAC on the Board of Directors for the Ronald McDonald House, LeMoyne Owen College and the Memphis Medical Center. I

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HR Professionals as

COMPEN$ATION Managers SUBSCRIBE

to the RSSFEED

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ARKANSAS Court: Injury from Workplace Exposure Compensable Despite Pre-existing Condition October 20, 2011 The Arkansas Court of Appeals affirmed that a worker’s exposure to cobalt dust qualifies as a compensable injury, despite the worker’s pre-existing respiratory condition from smoking, because it aggravated that condition, (Qualserv Corp. v. Rich, Ark. Ct. App., No. CA11-311 (Sept. 21, 2011). “The evidence in the record regarding causation, taken as a whole, is sufficient to support the commission’s finding that appellant’s employment aggravated his pre-existing COPD,” the court ruled.

March 23, 2012 Deadline for Summary of Benefits and Coverage Requirements Delayed The federal agencies charged with implementing the requirements imposed by the 2010 Patient Protection and Affordable Care Act (PPACA) recently stated in a series of Frequently Asked Questions (FAQs) that when final regulations are issued, they will "include an applicability date that gives group health plans and health insurance issuers sufficient time to comply." The FAQs also state that until final regulations are issued and applicable, plans and issuers are not required to comply with the SBC and uniform glossary requirements of the PPACA, which previously imposed a March 23, 2012 deadline to comply.

Injured Tenn. Employee Resigns, Seeks Greater Workers’ Comp Benefits 10/14/2011 After taking a medical leave of absence, an employee resigned from her production line job because she feared that she could not handle the work because she had carpal tunnel syndrome. She sought additional workers’ compensation benefits. The trial court awarded additional benefits, saying the employee did not have a meaningful return to work and that she was eligible for reconsideration of her earlier settlement. It also awarded a 25 percent permanent partial disability rating to each upper extremity. Howell v. Nissan North America Inc., Tenn., No. M2009-02567SC-WCM-WC (Aug. 11, 2011). Professional Alert: Under state law, if an employee does not make a “meaningful return to work” after an injury, then he or she might be entitled to additional workers’ compensation benefits.

www.HRprosMemphis.com

The Compensation Manager or Analyst is the key resource for the company’s salary and bonus programs and supports all compensation programs including incentive programs, sales and commissions, and stock. The Compensation Analyst also manages projects such as survey participation and analysis, and compensation integration for mergers and acquisitions. They also communicate salary and bonus programs in new hire orientation and assist managers with compensation related issues.

Faye Lott Senior Compensation Analyst at Fed Ex Express

Faye Lott has recently become a Senior Compensation Analyst at FedEx Express. Her new role will allow her a unique opportunity to interact with other Express departments; such as Legal, Finance, and Operations, to learn and understand the business, and participate with other Compensation team members in the design, administration, communication and monitoring of Express US Domestic Compensation programs, including providing guidance on executive compensation and coaching FedEx management on all compensation-related matters. Some of Faye’s past experiences cover a myriad of industries, from government to high tech, and include time in the consultant arena. She is a member of the Society for Human Resource Management (SHRM) and is affiliated with SHRM-Memphis. Faye is also a member of WorldatWork Professional Compensation Association, and currently serves as VP of Surveys on the Board of the Mid-South Compensation Association. She also holds SPHR and CCP certifications.

Compensatory Time Off Compensatory time off or “comp time” as it is often referred to is time off in lieu of payment for extra time worked over a 40-hour work week. According to the Department of Labor, comp time for non-exempt (hourly) employees is illegal in the private sector. Comp time may be used in the public sector for employees such as police and fire, and a limited number of others. Comp time must be given to non-exempt (hourly) employees at the rate of one and one half time for the hours worked over a 40-hour week. Exempt (salaried) employees are paid “without regard to the number of days or hours worked”, so you can always provide additional time off without pay to an exempt employee without concern of violating a law. What you cannot do is negatively affect their salary. As long as exempt workers still receive their established salary, you can provide comp time to them for working longer hours or weekends.

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N ME OY PL EM TL AW

A United Front Prepares to Take on

EMPLOYEE

MIS-CLASSIFICATION B Y J O N AT H A N C . H A N C O C K AND WHITNEY M. HARMON

In September, Secretary of Labor, Hilda Solis signed a memorandum of understanding with the Internal Revenue Service ("IRS") to "improve departmental efforts to end the business practice of misclassifying employees in order to avoid providing employment protections." "We're here today to sign a series of agreements that together send a coordinated message: We're standing united to end the practice of misclassifying employees," said Secretary Solis. "We are taking important steps toward making sure that the American dream is still available for all employees and responsible employers alike." This memorandum of understanding enables the Department of Labor ("DOL") to share information with the IRS in an effort to crack down on independent contractor misclassification. In addition to the memorandum of understanding with the IRS, the DOL has signed or agreed to sign memoranda of understanding with officials in eleven states to coordinate similar efforts.

These memoranda of understanding arose as part of the DOL's Misclassification Initiative which focuses on preventing, detecting, and remedying employee misclassification. The DOL's goal with this initiative is to reduce the prevalence of employee misclassification and secure the protections and benefits of the applicable employment laws for those employees misclassified, using information sharing, aggressive enforcement, and focusing on those industries where misclassification is common. In support of this initiative, the DOL's Wage and Hour Division asked for a significant increase in funds and investigators in its 2012 budget request. Along with the additional funding and staffing, the Office of Federal Contract Compliance Programs ("OFCCP"), Office of the Solicitor, and the Occupational Safety and Health Administration ("OSHA") will support the Wage and Hour Division's efforts to increase its information sharing and coordination to enforce violations arising from misclassification.

Meanwhile, in the same month the IRS announced it has launched a new voluntary worker classification settlement program. This program allows businesses to reclassify workers and make a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit that could result in significant fines in the form of interest and penalties. Employers accepted into the program must, however, agree to an extended statute of limitations for the IRS to pursue payroll tax violations and this program does not excuse violations of other laws. Moreover, the IRS has not mentioned whether this program prevents the IRS from sharing information from this program with the DOL. Employers that qualify for relief under this program will likely find the reclassification process much more employer friendly and the expense will be more bearable. With the emphasis on information sharing, however, the employer must still consider the reaction of the DOL. www.HRprosMemphis.com

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EMPLOYMENT LAW

With the increased scrutiny by the DOL, IRS, and other federal and state agencies, employers who rely heavily on independent contractors to keep costs low are encouraged to ensure their workers are properly classified. At this time, the DOL is focusing its attention on certain industries that regularly rely on independent contractors, such as home builders. If an employer classifies a worker as an independent contractor the employer must be able to prove that the classification is warranted under all applicable laws. If that classification is found to be improper the implications can be crippling, especially for small businesses. Misclassification implicates not only the Fair Labor Standards Act, but also state wage and hour laws, workers' compensation statutes, unemployment insurance laws, and the state

and federal tax codes. For these reasons, employers relying heavily on independent contractors or considering this type of classification as a method for reducing costs are encouraged to audit these positions to ensure that the worker is actually an independent contractor under all applicable laws. Factors to consider when auditing your independent contractor workforce include, but are not limited to, whether the worker is paid by a regular paycheck or by job, whether the worker is temporary or works year-round, whether the worker controls the manner of production, and whether the worker relies on the employer for supplies, tools, and equipment. This analysis, while extremely fact intensive, can also differ depending on the law

in question. It is, therefore, imperative that employers are confident that their employees are correctly classified and that they can defend that classification when the united front led by the DOL comes calling. I

Whitney Harmon Baker Donelson Bearman Caldwell & Berkowitz, PC

Jonathan Hancock Baker Donelson Bearman Caldwell & Berkowitz, PC

Wage and Hour Laws Apply to Holiday Workers According to SHRM, managers often fail to treat temporary or seasonal employees like regular employees and erroneously think that holiday workers are not subject to the same laws as regular workers. Be aware that you need to treat temporary employees like regular employees. You cannot discriminate against these workers or have them work overtime without paying overtime pay. If you expect temporary employees to meet the same expectations as other employees with regard to attendance, punctuality, professional appearance and conduct, then be sure they receive an employee handbook, which provides your policies prohibiting unapproved overtime and workplace harassment. They also need to know the complaint procedures.

OUR JOB:

Know labor and employment law Listed by U.S. News - Best Lawyers “Best Law Firms” 2011 among the top tiers nationally in the areas of Employment Law - Management, Labor Law - Management, and Litigation - Labor & Employment Also listed in U.S. News & Best Lawyers 2011 for the most First-Tier Metro rankings in Tennessee in Employment Law - Management and Litigation - Labor & Employment

OUR GOAL:

Be a valued part of your business team In labor and employment issues, there is no one-size-fits-all solution. That’s why Baker Donelson’s L&E attorneys partner with clients to determine their specific goals and help them meet those goals. We know how important it is to operate with a focus on your most important asset, your employees. In 2010 and 2011 Baker Donelson was named by FORTUNE magazine as “100 Best Companies to Work For”. Clients know it’s not only what we do, but how we do it, that matters most. It’s how Baker Donelson has helped clients for more than 120 years.

E XPAND YOUR E XPECTATIONS ALABAMA GEORGIA LOUISIANA MISSISSIPPI TENNESSEE TEXAS WASHINGTON, DC

www.bakerdonelson.com

The Rules of Professional Conduct of the various states where our offices are located require the following language: THIS IS AN ADVERTISEMENT. Ben Adams is Chairman and CEO of Baker Donelson and is located in our Memphis office, 165 Madison Avenue, Suite 2000, Memphis, TN 38103. Phone 901.526.2000. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. FREE BACKGROUND INFORMATION AVAILABLE UPON REQUEST. © 2011 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

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EE OC UP DA TE

The “Paycheck Rule”its Statute of Limitations & Expanding definitions

LILLY LEDBETTER

FAIR PAY ACT: An Area of Uncertainty BY LATOSHA DEXTER

igned into law by President Obama, was one of his first acts in office. The Lilly Ledbetter Fair Pay Act greatly lengthened the statute of limitations for discriminatory pay claims and, in the process, rolled back a heavily criticized Supreme Court ruling issued in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007).

discriminatory compensation decision or other practice,” or (3) “when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.”

Plaintiff Lilly Ledbetter worked for Goodyear at its Gadsden, Alabama plant from 1979 until 1998. During much of this time, salaried employees at the plant were given or denied raises based on their supervisors' evaluations. By 1997, Ledbetter's male colleague's earned 15 to 40 percent more than Ledbetter earned. In July of 1998, Ledbetter filed a formal EEOC charge. After taking early retirement in November 1998, Ledbetter filed a discrimination action against Goodyear, asserting claims under Title VII and the Equal Pay Act. Goodyear contended that Ledbetter's pay discrimination claim was time-barred with respect to all pay decisions made prior to September 26, 1997, which was 180 days before the filing of her initial EEOC questionnaire. Goodyear further argued that no discriminatory act relating to Ledbetter's pay occurred after that date. The Supreme Court ultimately held that for victims of pay discrimination the statute of limitations for a Title VII discrimination claim begins to run on the date of the initial discriminatory pay decision. Therefore, claims where the initial decision setting the pay occurred outside the statutory window were foreclosed.

Under this "paycheck rule," the statute of limitations for filing a wage claim resets each time the employee receives a paycheck, benefits or other compensation. The Act also expands the definition of an unlawful employment practice to not only include discrete "decisions" regarding compensation, but to include any "other

In response to what many deemed to be a restrictive interpretation of Title VII, Congress enacted the Lilly Ledbetter Fair Pay Act of 2009, signed into law by President Obama on January 29, 2009. The Act, retroactive to May 28, 2007, does much more than just overturns the Supreme Court’s 2007 ruling. Specifically, it amends Title VII, the Americans with Disabilities Act, the Rehabilitation Act, and the Age Discrimination in Employment Act to specify that unlawful discrimination occurs when: (1) “a discriminatory compensation decision or other practice is adopted,” (2) “when an individual becomes subject to a

practice" that affects an employee’s compensation. The Act does not define the term “other practice” which, of course, leaves it open to judicial interpretation. www.HRprosMemphis.com

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As expected, the Act has generated judicial attention and increased focus by employee advocates. Plaintiffs have succeeded in proceeding with wage discrimination claims years after the alleged discriminatory acts occurred. In Gentry v. Jackson State Univ., 610 F.Supp.2d 564, 566-67 (S. D. Miss. 2009), the plaintiff was denied tenure in 2004 and filed her charge with the EEOC in 2006. The district court allowed her denial of tenure claim to proceed because plaintiff alleged it deprived her of an increase in salary. While stretching the limitations period, the court in effect construed a “discrete act” – the denial of tenure – to be a compensation decision because it denied the plaintiff a salary increase. Likewise, in Boaz v. Federal Express Corporation, 742 F.Supp.2d 925 (W.D. Tenn. 2010), the plaintiff alleged that she was being compensated less than a male employee for similar work that she performed from 2004 to 2008. During this time the plaintiff unsuccessfully attempted to be promoted to a higher pay grade. On June 12, 2008, she accepted a new position and thus the discrepancy in pay was eliminated. Thereafter, she filed a charge of discrimination April 8, 2009. The employer, characterizing her claim as a failure to promote, argued that only allegations of discriminatory conduct occurring after June 12, 2008 were timely under Title VII. The court disagreed deeming her claim to be an unequal pay claim because of the discrepancies in pay for similar work. Because she filed her claims within 300 days after receiving her last paycheck from her first position, her claims were considered timely.

Another area of uncertainty which is in a state of flux are the terms “compensation decision or other practice” and “other compensation”. In Bush v. Orange County Corr. Dep't, 597 F. Supp. 2d 1293 (M.D. Fla. 2009), the court held that plaintiffs' Title VII claims 10

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regarding demotions, alongside those involving pay reductions, were timely in light of the Act. In Mikula v. Allegheny County of PA, 583 F.3d 181 (3rd Cir. 2009), while finding the claim to be time-barred, the court determined that an employer’s failure to respond to an employee’s complaints about her failure to receive a raise was a compensation decision. In a 2011 case, Greenleaf v. DTG Operations, Inc., 2011 WL 883022 (S.D. Ohio Mar. 11, 2011), a district court in Ohio concluded that the term "other practice" in the Ledbetter Act covers "performance-based pay evaluation, business reassignments, and job classifications." In regard to “other compensation”, courts have reached varying conclusions as to what is included in this definition. Employers can be sure that plaintiffs’ lawyers will aggressively push the boundaries in this area of uncertainty.

The question most asked by employers is what can they do to mitigate their risks when they are not quite sure which acts will subject them to liability, when, or for how long.

Recommendations: Audit and regularly review your compensation policies and policies that may affect compensation such as classification policies, seniority policies, performance evaluation policies, benefits accrual policies and bonus accrual policies.

Analyze compensation data to determine if any statistical disparities exist across gender, race and ethnic lines and make any appropriate adjustments that eliminate unexplained disparities.

Ensure that there are clear, objective, nondiscriminatory reasons for differences in compensation.

Develop objective criteria for performance evaluations and compensation decisions.

4 5

Respond appropriately to all compensation-related complaints.

Train those responsible for administering performance evaluations or making any compensation related decisions.

Latosha Dexter, SPHR Attorney, Rainey Kizer Reviere & Bell, PLC

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BOOK LOOK

Representing employers in employment and labor-relations matters since 1959.

Digital Assassination: Protecting Your Reputation, Brand, or Business Against Online Attacks By Mark Davis and Richard Torrenzano Social media is a disruptive technology that is fast eroding the distinction between internal and external corporate communications—a reality that is still taking many corporate leaders by surprise. One of the biggest surprises, yet, for some in the boardroom is when the deepest and most painful cuts come from within. There is a growing tendency for current or disgruntled ex-employees to run down the reputation of their company, its products, and leaders. This is, to some extent, to be expected in firms with contentious relations between management and a unionized workforce. Where federal labor law and union rules are in place, social media attacks on employers can be direct and immune from corporate control. While tailored strategies are more complex, we generally counsel clients to start with a basic five-point plan.

Jeff Weintraub

Best Lawyers for 17 years Mid-South Super Lawyers 5 years MBQ Power Player in Employment Law 2010-2011 Top Attorneys in Mid-South Memphis Magazine 2011

First, use common Internet tools, like Boardtracker, Google Blog Search and SocialMention to track what is being said about your company on message boards and blog sites—and by whom. Second, have a policy. Even some large companies do not have a solid policy governing employee social media communications. Many seem unaware that their employees are putting up such posts about delicate internal matters in real time from the office through their mobile devices on Facebook, LinkedIn, Twitter and other platforms. Every employee should know that he or she is a representative of the company, on and off the clock, in the virtual world as well as the physical one. Third, don’t over-react. Separate the slightly incautious from the insanely indiscrete. Not every offense is a firing offense. Fourth, do react to real problems. Fifth, understand that monitoring and managing your social media profile is a multidisciplinary problem that summons HR to coordinate with legal, sales and communications. Companies need to formulate policies, make those policies clear in your hiring, constantly monitor what is being said about you, and have consultants at the ready to counter an inside or outside job by a digital assassin. Digital Assassination: Protecting Your Reputation, Brand, or Business Against Online Attacks was published October 25, 2011 by St. Martin’s Press and is available at Amazon.com. Richard Torrenzano is former head of communications and public policy for the NY Stock Exchange. Mark Davis is a former Whitehouse speechwriter and worked for former president George H.W. Bush and wrote several speeches for former president Ronald Reagan. I

2012

Today, legal problems and union

activities can impose an enormous financial strain on

a company. For this reason, The Weintraub Firm is strongly committed to preventative labor and employment relations and to providing the necessary knowledge and assistance to employers to allow them

to effectively operate in a highly regulated, litigious

business environment. However, when prevention doesn’t work, we fight to win the case. THE

WEINTRAUB FIRM

www.weintraubfirm.com Employment Discrimination Defense | Labor Relations | Employee Handbooks Management Training | Family Leave | Overtime & Benefits | ADA Immigration Law | Wrongful Discharge & Covenants/Unfair competition Litigation | Arbitration | Alternative Dispute Resolution No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers

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WAGE

SURVEY

2011MemphisArea

WAGE $urvey B Y J E N N I F E R B L A K E A N D FAY E L O T T

One of the most crucial areas of HR practice is maintaining a compensation plan that is competitive with the external market while preserving internal equity among employees. The challenge to find credible, local benchmarking data exists for large and small employers in all industries. The Mid-South Compensation Association (MSCA) and The Centre Group partner each year to produce a local wage survey for the greater Memphis area. The 2011 Memphis Area Wage Survey was published in June, and in July the Compensation & Benefits Career Emphasis Group (CEG) of SHRM-Memphis met to review and discuss the survey results. Jennifer Blake, Senior Consultant at The Centre Group, and Faye Lott, Vice President of Surveys for MSCA, presented the data and facilitated the discussion that followed. The purpose of the annual survey is to provide local employers with benchmarking data related to recent and projected hiring, turnover, compensation practices, and benefits. This year’s survey includes wage and benefits data for 52 participating employers from a variety of industries including manufacturing, distribution, healthcare, service, government, and education. When reporting wage data, only jobs reported by five or more companies are included. This year’s survey included wage data for 76 jobs. 12

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Participating companies are asked a series of questions related to how the current economic environment has influenced their HR policies and practices. This year’s survey provided encouraging news when compared to 2009 and 2010 responses especially when participants were asked, “How would you compare the overall health of your organization now compared to a year ago?” In 2009, only 13% of respondents answered “better than last year” compared to 44% in 2011. Additionally, when asked about HR budget cuts, the percentage of employers reporting cuts in specific areas was reduced considerably from 2009 to 2011.

% of Participants Reporting Budget Cuts: 2009-2011 80% 70% 60% 50% 40% 30% 20% 10% 0%

68%

51%

2009

43%

39%

29%

36% 32%

16%

22%

2010 16%

16% 10%

Business Travel

Morale Building Activities

Professional Development

Budget Items Cut

Recruitment Costs

2011

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Pay freezes, having become the norm in most industries over the last few years, seem to be â&#x20AC;&#x153;thawingâ&#x20AC;?, both nationally and locally. In three separate national surveys, the percentage of employers reporting pay freezes has continued to decline from 2009 (as high as 64%) to 2011 (between 3%-9%). Questions related to pay cuts or freezes in the Memphis survey were answered as follows:

! " " - ! # &

" ! # " & &

5:@

& & "!

The Memphis area survey queries participants about merit pay increases. Based on actual reported data for the past two years and projected data for 2011 and 2012, merit increase amounts have been consistent. Actual average merit increases in 2009 were 2.55% and 2.6% in 2010. Average merit increases projected for 2011 are 2.62% and 2.76% for 2012. These figures are just under projections reported in two national surveys by WorldatWork, 2.7%, and Culpepper & Associates at 3%. Exempt jobs reported most often in the Memphis survey have generally not shown much overall movement from 2009 to 2011. Controllers, accountants, HR managers, and computer managers experienced virtually no change in salary level from 2009 to 2011. However, purchasing managers and network administrators showed an overall increase of 12% and 7% respectively. Nonexempt jobs reported most often fared somewhat better from 2009 to 2011 with clerical jobs such as administrative assistants, customer service representatives, bookkeepers, and payroll clerks experiencing overall increases of 2%-4%. Maintenance workers, shipping & receiving clerks, and truck & tractor operators saw average increases in overall salaries of between 7% - 9%.

Some of the guidance and discussion at the July CEG meeting revolved around ways for HR managers to use survey data in managing compensation programs: Identify your companyâ&#x20AC;&#x2122;s recruitment market (which may be different for different jobs), search out industryspecific data, and consider geographic differentials. Also critical is y o u r organizationâ&#x20AC;&#x2122;s compensation philosophy. For example, your org an i zati on may decide as a market leader that it should be paying near the top of the market. In considering market data, you will want to set your pay rates to the 75th â&#x20AC;&#x201C; 90th percentile of the market. This means only 10% to 25% of the market is paying more than your company. A lively discussion arose during the CEG meeting regarding whether or not an organization should establish different philosophies for different job groups. Some audience members saw a place for distinguishing pay this way for jobs that are specialized and have specific recruitment and retention issues, while others maintained that a common philosophy for all jobs in an organization was important.

One of the benefits of the SHRM-Memphis CEG meetings that weâ&#x20AC;&#x2122;ve experienced is being together in a room with peers and being able to discuss real-life HR issues. In our experience, we usually go away with at least one new idea about how we can improve our own HR practice. We recommend you consider attending one of these groups geared to your specific area of practice such as compensation and benefits or hiring and staffing. To learn more about the SHRM-Memphis Career emphasis groups, go to http://www.shrmmemphis.org/ and click on Career Emphasis Groups under About Us. Compensation practitioners not currently members of the Mid-South Compensation Association, go to http://www.mscamemphis.org/ to learn more about the

networking and educational benefits of this high-quality membership organization. I

3% AVERAGE BASE PAY INCREASE IN 2012 according to a Mercer survey

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1 SHRM-Memphis CEG Leaders met at Jim's Place on October 24. (L front to back) Austin Baker, Cici

"Business is a cobweb of human relationships." â&#x20AC;&#x201C; Ross Perot

Ebersole, Paola High, Anne Terry. (R front to back) Nancy Crawford, Jennifer Blake, Melissa Calligari, Dhane Marques

2 John Norris

and David Jones, attorneys with Jackson Lewis LLP, sponsored the November

meeting

SHRM-

Memphis. 3 Susan Stephenson

and Chip Dudley, co-founders of Independent Bank, hosted the LP Breakfast on November 18. 4 Gary Shorb, CEO of Methodist Healthcare, speaking at the Methodist Healthcare Cancer Luncheon on November 4. 5 Joe Birch, WMTV-TV Channel 5 News Anchor was moderator with Keynote Speaker, Actor Michael Douglas, at the Methodist Healthcare Cancer Luncheon.

6 Jim Boswell, CEO of Baptist

Memorial Medical Group, spoke at the November 3 Greater Memphis Employee Benefits Meeting at the Crescent Club. His topic was Hospital & Physician Alignment Under Accountable Care. Why is Integration Critical to Success?

7 David Thornton, attorney with Bass, Berry, and Sims was a speaker at the SHRM-Memphis Comp & Benefits Meeting at the Holiday Inn at the University

of Memphis in October. 8 (L-R) George Hernandez, CEO of Campbell Clinic; Ken Beasley, CEO of OrthoMemphis, A Division of MSK Group, PC; Bill Griffin, VP of Corporate Finance for Baptist Memorial Health Care Corporation; and Angela Youngberg, attorney with Rainey, Kizer, Reviere, and Bell, PLC, were panelists for The Business of Health Care Seminar on November 10th at the Brooks Museum. The focus of the seminar was on healthcare as an economic driver in Memphis. 9 Joel Bishop with O.C. Tanner was the speaker at the November 16th SHRM meeting at the Holiday Inn at the University of Memphis. He spoke on The Carrot Principle.

8 14

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SCENE

10 Jennifer Kiesewetter with Kiesewetter Law firm and John Simmons

JANUARY 5 GMEBC Meeting 11:30 am to 1:00 pm The Crescent Club Speaker TBA www.gmebc.org

with Kiesewetter Wise Kaplan and Prather at the L & P Breakfast Club on November 17 held at the Botanic Garden.

CALENDAR of EVENTS

11 Robert Williams,

Shareholder with Baker Donelson spoke on the ADAAA at the Baker Donelson Breakfast Meeting on November 17. Williams will speak about Social Media at the Holiday Inn in Southaven on December 9. 12 (L-R) Susan Kenney, SVP Private Banking Manager with Independent Bank; Susan Scott, Personal Financial Manager Accounting and Bookkeeping Services; Linda Barnes,

SVP

Commercial

with

Lending

Independent Bank; and Stacey Hyde,

with

Independent

Wealth Management, LLC at the L & P Breakfast Club meeting on

JANUARY 12 NEA SHRM 11:30 am to 1:00 pm Baptist Memorial Hospital DeSoto The DeSoto Room Southaven, MS The topic will be Americans with Disabilities. The speakers will be Carla Paradine with the MS Department of Rehabilitation Services and Courtney L. Tomlinson, Attorney with Jones Walker. www.nwms.shrm.org

November 17. 13 Austin Baker and Guests at the HRO Partners table at the 19th Annual Alumni Day Luncheon at the University of Memphis on November 2.

14 Russell “Rusty” Reviere, attorney

with

Rainey,

JANUARY 11 NWMS SHRM 3:00 pm to 5:00 pm ASU Delta Center – 5501 Krueger Drive Jonesboro, AR The topic will be ESGR – Employer Support of the Guard and Reserve www.neashrm.org

Kizer,

Reviere, and Bell, PLC at The Business of Health Care Seminar on November 10th at the Brooks Museum. 15 (L-R) Allen Chapman, Vice President of Sales with Yuletide Office Solutions; and Robbin Childress Account Executive also with Yuletide Office Solutions at the L & P Breakfast Club Meeting. 16 (L-R) Lisa L. Leach and Amber IsomThompson spoke at the HR Bytes Luncheon at Kiesewetter Wise on November 9. 17 HR Professionals attending a Ford & Harrison Breakfast Briefing on October 27.

JANUARY 17 SHRM-Memphis 11:30 am to 1:00 pm Holiday Inn at the University of Memphis City of Memphis Mayor A.C. Wharton will speak on Human Capital in Cities “The new Currency of Economic Development”. www.shrm-memphis.org

JANUARY 17 WTSHRM 11:30 am to 1:00 pm Carl S. Grant Event Center Union University Jackson, TN The topic will be “HR Excellence: Strategies for Continuous Improvement” Presenter: Kellie Conn, VP of HR Services, The Paradigm Group, Nashville, TN www.wtshrm.org

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BULLETIN Prospective Legislative Policy Review:

TN Educate and Employ Act can reward you for offering Tuition Reimbursement to your Employees. BY AUSTIN BAKER, SHRM-MEMPHIS PRESIDENT

Over the past eight months, I have had the pleasure of working with a number of partners to craft a special piece of legislation that is designed to reward employers for helping educate their workforce. Increasing the percentage of people with a college degree is critical for individuals and businesses in Shelby County and across Tennessee. As compared to other major metropolitan areas, Memphis/Shelby County ranks 48 out of 51 in college attainment, and Tennessee does not rank much better by comparison with other states. We compete against these communities, as well as on a global scale, for industrial recruitment and retention. This statistic represents a significant limitation in attracting new industry, loss of talented workers in our community and lagging economic growth. The Educate and Employ Act is one means of realizing a greater percentage of college graduates in our community by incenting certain area employers that either reside in or have employees that reside in existing federally designated renewal zones with tax credits for tuition reimbursement programs.

An estimated 68% of all new jobs created between 2010 and 2018 will require a college degree. Unfortunately, portions of Shelby County are even further behind in college attainment numbers and thus less likely to partake in a majority of the new jobs created. Educate and Employ is designed to encourage businesses to make tuition investments in those individuals least likely to have the funds to pay for college themselves; specifically, those residing in federally designated renewal communities close the achievement gap. 16

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Currently Oregon, Rhode Island and Kentucky offer state level tax credits to employers for tuition reimbursement. Tennessee and Shelby County need an edge to catch up and compete with the rest of the country. The Educate and Employ Act would create a “carrot” for employers located in Shelby County to offer a tuition reimbursement program. Employers that offer tuition toward two or four-year degree completion for their employees who have not received tuition reimbursement in the past two years and who live or work in renewal communities will receive a state tax credit of 25% of the cost of the tuition. Currently we are proposing a $10 million pilot to study the effects of rewarding employers for offering tuition assistance. The legislation in its current form would allocate $5 million in tax credits over 4 years for both Memphis and Chattanooga, amounting to $1.25 Million per year per community. This would make it financially feasible for 13,200 students in Shelby and Hamilton County renewal communities (6600 in each county) to achieve college degrees. With a 25% state match, for every $700 invested by the state, the employers will invest $2800, meaning that the ROI for the state on $10 million is $37 million in tuition investments. This, of course, does not even factor the real return on the investment, the economic impact of 13,200 new college degrees added into the state’s economy.

According to the CEOs for Cities: National Talent Dividend Study, if we can move college attainment up by 1% for the Memphis area over the next five years, we can have a substantial economic impact.

This achievement would amount to over 8,200 degrees and would have a $1 billion dollar economic impact on the local economy. If Chattanooga increased its college attainment rate by 1% percent, the region would capture a $345 million Talent Dividend. That's just 3,400 additional grads. There are powerful data pointing to the potential impact of Educate and Employ on Tennessee’s college completion agenda. A 2010 study by Society for Human Resource Management and National Association of Independent Colleges and Universities that reviewed the results of employer-sponsored education assistance provided under Section 127 of the Internal Revenue Code demonstrated significant results including the following: • Average Section 127 Benefit received- $2,700 (25% = $675) • Average Age- 36 (These are the young professionals we need to keep.) • Top 4 Majors- Business (28%) STEMsciences, technology, engineering and math (17%) education (15%) and health (13%) (Definitely what Shelby County needs!) • Average Annual Comp of current 127 recipient- $42,711 (targets people who need financial help to get them through school)

The data suggest that such tuition reimbursement programs work too; that they are used by those who are least likely to be able to afford college on their own, and that the degrees they achieve are those that are very much needed to fill workforce gaps in Shelby County and Tennessee. According to his website, Governor Haslam, “has made college access and success a priority, and he is committed to helping every region raise educational attainment rates and enhance their workforce development efforts through innovative public/private partnerships.” This program is aligned with goals and objectives of the governor. It also aligns with the new state university funding matrix which is heavily weighted toward degree attainment. If this bill passes, we will need your help to show how we can use tuition reimbursement to advance our workforce in our respective communities. I

Special thanks to Blair Taylor with Memphis Fast Forward for her help in writing and editing this article.

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EN MP CO

SHRM-MEMPHISEXECUTIVE ROUNDTABLE

ON TI SA

PREPARING for the Recovery. BY LATOSHA DEXTER

“THE ECONOMY IS SLOWLY

gaining momentum - . . .” BY JENNIFER BLAKE AND FAYE LOT

EXECUTIVE RoundTable-TALK BY JOHN E. GNUSCHKE, P

All indications are that the economy is slowly gaining momentum – GDP is positive and increasing and some pricing power is beginning to show up in even the weakest sectors of the economy. Other factors like slowly declining unemployment rates and small increases in income are positive signs that the recovery is in fact sustainable. Traditional monetary and fiscal policy tools, typically sufficient to jump start the economy, have been fully employed and are working. Record low interest rates and the abundance of economic stimulus from monetary and fiscal tools should be sufficient to put a floor under the economy.

On thing is lacking in this recovery and that is private sector job growth. Employers are still reluctant to hire new employees because they remain unconvinced that the recovery is sustainable. Recovery from the great recession has been slow and painful, but employers should take advantage of the economic conditions and institute policies and practices that prepare them for the future. Even the most pessimistic economist and business leader must recognize that the recession will not last forever and that the recovery is going to take place. The global economy is not going to remain in a perpetual state of retrenchment and the outlook for the future is being put in place today. The prolonged recovery is both an advantage and a disadvantage for employers. It is an advantage because it allows employers to be highly selective in a weak labor market and

allows Human Resource professionals sufficient time to plan for the future. Unlike prior recessions where the economy recovered quickly, this recovery has been slow and drawn out. While the downside is the lack of growth and hiring, the upside is that employers have the time to be selective and institute policies that will set the stage for the long-term expansion of the business. Corporate profits are up and businesses are doing well so the stage is set for an expansion.

In prior recessions, market adjustments were notably predictable. In the initial stages of the downturn, employers faced with losing long-term investments in their workforce at first postponed using layoffs or terminations as an adjustment tool of choice. Because employer specific training is an expensive investment in the workforce, the reluctance of employers to write-off investments in recruitment, selection and training is understandable. After the recession was fully evident and the alternative use of other options exhausted, employers reduced their labor force through attrition, layoffs www.HRprosMemphis.com

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and terminations and simply took the loss in terms of investments in human capital. As the recovery gained strength, employers remained unconvinced and used their existing labor force more intensely as average hours of work and productivity increased. Employers got into the labor market in earnest until the recovery was well established and the need to hire new workers could no longer be postponed.

The predictability of those responses to the changing economic conditions caused employers to make adjustments that were totally incorrect. They failed to recognize the market opportunities that were presented during the early stages of recovery and failed to anticipate the impact of the downturn. It seems that employers don’t learn the lessons of history and the market – buy low and sell high. They keep employees far too long in the downturn and don’t take advantage of the opportunities presented by a weak labor market in the upturn. It is just this condition that presents it’s self now. Employers and Human Resource professionals have time to plan and set the stage for this expansion. First they have the opportunity to anticipate current and future strengths and weaknesses in their existing workforce. Training needs and again and health issues clearly impact the future viability of the business and can be addressed without the competing pressure to hire found during a typical expansion.

Anticipating a new mix of employees and preparing to meet their needs and the needs of the business can be done now better than at other 18

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times. Hiring high quality employees can be done selectively now and policies regarding retention, pay and promotion can be designed to reward those workers that well determine the future of the business.

Pictured above: (L-R) Charles L. Epperson, VP with Orgill Inc. and Past President of SHRM-Memphis, chatting with Dr. John Gnuschke following the SHRM-Memphis Executive Roundtable Meeting at the Crescent Club on November 3. Dr. Gnuschke is an economist with the Sparks Bureau of Business and Economic Research at the University of Memphis and was guest speaker. creative personnel policies and recruit with a vision of hiring the best and the brightest. The labor market is filled to the brim with high quality enthusiastic workers and this is the time to scoop them up. Don’t wait until the recovery is obvious to everyone or you will be caught up in the problem of going to the market at its peak. Anticipate the recovery and remain alert to the opportunities to hire that will determine the future path of your business.

So the message is clear, prepare for the good times because the recovery is underway. The demands of a strong recovery have been delayed for a short time. This is a rare opportunity to plan for the future, design

As most professionals know, working smarter always trumps working harder. The current recovery is a time to work smart, analyze and reanalyze the existing labor force, plan for the future and put in place a strategy that allows you to pick the very best from the pool of available workers. I

Send feedback to: feedback@HRprosMemphis.com

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LE AD ER SH IP

Author Doug Stanton Speaks

to the

Breakfast CLUB “I think I was successful because I tried to write about who they were when no one was looking. I tried to take extraordinary people and make them ordinary,” said Stanton.

mid a backdrop of American flags and an introduction by Susan Stephenson that was replete with authentic Indian headdress and Chip Dudley donning a Pilgrim top hat, the Lipscomb Pitts Breakfast Club welcomed best-selling author Doug Stanton as its guest speaker for November. “Doug is an amazing storyteller, and we are really excited to have him as our speaker this month. November features the combination of Veteran’s Day and Thanksgiving, and we wanted to recognize and show our gratitude for the extraordinarily heroic service of our military veterans,” said Susan Stephenson, co-founder of Independent Bank, this month’s event host. Stanton, who is currently a contributing editor at Men’s Journal, wrote the New York Times bestsellers “Horse Soldiers: The Extraordinary Story of a Band of U.S. Soldiers Who Rode to Victory in Afghanistan” and “In Harm’s Way: The Sinking of the USS Indianapolis and the Extraordinary Story of Its Survivors.” The secret mission of the U.S. troops in “Horse Soldiers” was to secure northern Afghanistan by advising and bringing together the warring tribal factions that formed the Northern Alliance. Stanton stressed that a major challenge for the country will be how to

reintegrate the troops into society once they return from service. “The next wave that we’re going to face in all of our communities is the returning veterans, and that’s really going to be a challenge,” Stanton said. “It’s going to take tons of heart and strategic municipal sense to absorb the needs and wants of a group of people [the troops] that most of us have very little contact with. Many of them are surviving injuries that would have killed someone in Vietnam. I feel thankful that I’ve gotten the chance to know some of them.” “Horse Soldiers” is in development to be made into a film by Hollywood producer Jerry Bruckheimer, and it could debut in 2012. “I think I was successful because I tried to write about who they were when no one was looking. I tried to take extraordinary people and make them ordinary,” said Stanton. I P H O T O G R A P H Y B Y C R E AT I V E S O L U T I O N S

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WEST TENNESSEE SHRM CHAPTER 1

2 3

î&#x201A;&#x160;e West Tennessee Chapter of SHRM has approximately 75 members and has been recognized by the Society for Human Resource Management as a Merit Award Chapter for excellence in operations and service to its members. WTSHRM meetings are held on the third Tuesday of the month at the Holiday Inn located at 541 Carriage House Drive in Jackson, TN. 1 John Carbonell, President 2 Lisa Kincade, VP/President-Elect

3 Janice Shipman, Past President 4 Donna Dickenson, Treasurer 5 Marilyn Gambill, Secretary 6 Amy West, VP Membership 7 Casey Smith At-Large Member/Community Outreach Chair

8 9

WT SHRM Human Resources & Employment Law 2011 Fall Conference 8 President John Carbonell welcomes members and guests to the annual conference held November 2 at the Carl Grant Event Center at Union University in Jackson. The morning session included a discussion on a legal guide to hiring, translating military experience to non-military experience, assessment topics, ADA and the hiring process. The afternoon sessions covered EEOC case studies on employment discrimination claims, a summary of new Workersâ&#x20AC;&#x2122; Comp

legislation, and behavioral interviewing. The conference was sponsored by Rainey Kizer Reviere & Bell PLC.

9 Latosha Dexter, SPHR; and Geoffrey Lindley led the discussion on legal hiring. 10 John Burleson also participated in the discussion.

11 Gregory Jordan was a speaker with the Rainey Kizer team.

12 The WT SHRM registration table. 13 WT SHRM members enjoying the conference.

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MID-SOUTH

COMPENSATION ASSOCIATION

2012COURSE The Mid-South Compensation Association (MSCA) is a member of WorldatWorkâ&#x20AC;&#x2122;s local network, an alliance of human resource organizations supporting excellence in the field of compensation, benefits and work-life. MSCA sponsors WorldatWork Certification Courses in Memphis.

OFFERINGS IN MEMPHIS February 29* - March 1, 2012 T4: Strategic Communications in Total Rewards

September 12 - 13 Are you working toward Certified Compensation Professional (CCP), Certified Benefits Professional (CBP) or Global Remuneration Professional (GRP) certification? MSCA sponsors WorldatWork Certification Courses in Memphis. By offering the course in Memphis, Mid-South compensation and benefits professionals can work on certification without the expense of traveling to a distant location. There is no time requirement for completion of the nine courses to become fully certified. More information on certification requirements is available on WorldatWork website.

T2: Accounting & Finance for the HR Professional To register, visit the Memphis WorldatWork Courses site Online: http://www.worldatworksociety.org

Phone: 877/951-9191 (6am - 4:30 pm MST) Fax: 480/483-8352, Toll-free 866/816-2962 MSCA meets quarterly at the Holiday Inn at the University of Memphis. Membership dues for a full membership for a professional member are $75 annually and $65 for each additional person from the same company. The cost of the quarterly meetings is $20 per member and $25 per non-member. Student members pay only $25 per person annually. Membership is open to individuals engaged in one or more activities in the field of compensation or human resources. Applications are available on the website and are approved by the local Board of Directors. For more information, contact Todd

Annette Taylor, President

Massey at midsouthcomp@gmail.com, or visit the website is www.MSCA-memphis.org.

Todd Massey, VP Communications

ADDITIONAL BOARD MEMBERS Krubah Sisuse, President Elect, Jessica Glatstein, VP Programs Sharon Williams, VP Membership Shirley Shelton, VP Finance

Traci Salzer, VP Professional Development Faye Lott, VP Surveys Debbie Young, President Emeritus Melissa Hoeschen, President Emeritus www.HRprosMemphis.com

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LABOR LAW

Historically, the Board has always been highly political, depending upon which political party constitutes the majority of the Board’s members. The fact is that Republican presidents have generally appointed pro-employer leaning Board members and Democratic presidents have generally appointed pro-labor leaning members. The current Board has three members (Pearce (D), Hayes (R) and Becker (D)) with two existing vacancies. In August 2011, Pearce (D) was named chairman to replace former chair and prolabor leaning Wilma Lieberman (D) whose term had expired. Becker’s term as a recess appointee will end on December 31, 2011 at which time the Board would only be operating with two members. With the expected loss of a quorum, the Board can’t issue any decisions and that might well provide good news, albeit temporary, for employers and the business community alike.

New NLRB Standard Favoring Smaller Bargaining Units

RECENT

PRO-UnionTrend MAY END DECEMBER 31

BY RICHARD L. REINHARDT & KEITH WARREN

National Labor Relations Board (NLRB) members appointed by President Obama have issued recent decisions and are currently proposing rulemaking changes demonstrating a clear pro-union trend, which may result in many of the changes proposed by the Employee Free Choice Act (EFCA). Fortunately, for employers and employees alike, the EFCA was not passed. The NLRB And Its Members: The NLRB is an independent U.S. government agency charged with conducting elections for labor union representation and with investigating and remedying unfair labor practices. The NLRB is governed by a five-person board and a general counsel, all of whom are appointed by the President with the consent of the Senate. Board members are appointed to five-year terms and the general counsel is appointed to a four-year term. The general counsel acts as a prosecutor and the Board acts as an appellate judicial body from decisions of its administrative law judges. To gain an understanding of the Board’s most recent pro-union trends, one largely only need look at the recent majority composition of its members – within the last two years pro-labor Democrat appointees have held the Board’s majority, the first time that has occurred in nearly a decade. 22

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Overruling 20 years of precedence, the Board recently established a new standard for determining an appropriate bargaining unit. The Board held that an employer who challenges a union’s proposed bargaining unit as improperly excluding employees must then show that the excluded employees share an “overwhelming” community of interest with the petitionedfor employees. The Board’s decision will make it easier for unions to organize smaller units of employees, such as one department or even one job classification. According to dissenting Member Hayes, this decision “fundamentally changes the standard for determining whether a petitioned-for unit is appropriate in any industry subject to the Board’s jurisdiction.” Member Hays, in dissenting from this decision, stated that the majority made their conclusions “for the purely ideological purpose of reversing the decades-old decline in union density in the private American work force.” Member Hayes also warned that the bargaining unit test adopted by the majority “obviously encourages unions to engage in incremental organizing in the smallest units possible.”

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ADVOCACY

Boeing’s Unfair Labor Practice Trial The Board’s recent unfair labor practice complaint, after a yearlong investigation against the Boeing Company, is unique. The complaint, based on a charge filed by the International Association of Machinists (IAMAW) claims the company’s decision to locate a second assembly line for its 787 Dreamliner in South Carolina instead of Puget Sound, as well as certain comments made by company officials violated §§ 8 (a) (1) and 8(a)(3) of the Act. It seeks, as a remedy, an order directing the company to add a second line for production of its 787 Dreamliner in Washington State. This case is unusual in that Boeing didn’t close a unionized facility to open the non-union one in South Carolina. Boeing is not really moving existing work that the IAM union members are doing. They’re only starting a new line. Boeing has publicly stated it has added 2,000 unionized workers in Washington State since announcing the decision to open the South Carolina facility, plus about 1,000 workers so far in South Carolina. The dispute arises over whether Boeing built an assembly plant in South Carolina in retaliation against its strike-prone Machinists union to coercively discourage potential future strikes. In filing the complaint against Boeing, the NLRB noted that the Machinists struck the company five times since 1977, most recently in 2008. Boeing’s chairman, vice president and numerous other executives, the complaint alleges, publicly referred to that history of labor strife in explaining its decision to build a final-assembly outside of Washington State for the first time. If Boeing is found at fault, the NLRB’s General Counsel is proposing that Boeing be required to operate its second 787 production line in Everett, Washington, not in South Carolina.

Conclusion American business always faces uncertainty and risk in the marketplace. However, the NLRB has made recent decisions that will adversely affect the day-to-day relationship between management and employees throughout the U.S. This brief article does not tell the full story. Companies are also preparing to post on January 31, 2012 the NLRB’s “Employee Rights” notice. In addition, they are anticipating an internal agency rule making decision that may result in “quickie” union representation elections. All of these employee relations matters only exacerbate the uncertainties faced by American businesses today. I

HR ALERT Order to Allow NLRB to Continue Acting Without Quorum!! Effective November 3, 2011 Anticipating that the National Labor Relations Board may be left with only two sitting members come January, the agency has issued an order temporarily granting the General Counsel full authority over litigation matters that would otherwise require Board authorization and the ability to certify the results of any secret ballot election conducted under the National Emergency provisions of the Labor Management Relations Act (LMRA). I

THE FAIR LABOR STANDARDS ACT

No Longer Relevant to Today’s Workforce The HR Policy Association released a report in November based on a survey they conducted on The Fair Labor Standards Act’s (FLSA) stating that the policies are overly restrictive and out of step with modern work habits. The survey, to which 155 top HR executives responded, found that companies implemented a number of restrictions on nonexempt employees because of the law, such as restrictions on: • • • •

Overtime hours (85.6 percent). The use of personal digital assistants (55.6 percent). Flexible working hours (44.4 percent). Telecommuting (32.2 percent).

According to 51 percent of respondents, more employees were not pleased with reclassification (32 percent) than were pleased with it (18 percent). They resent being reclassified to nonexempt status because they believe that the reclassification diminishes their status among co-workers (94 percent), results in the loss of workplace flexibility (62 percent) and results in restrictions on working beyond normal working hours (52 percent). The FLSA law was intended to protect low-paid and lowskilled workers. However, 62 percent of those surveyed were cases where the company settled a wage and hour claim in the pay range employees making $50,001 to $100,000. Almost 25 percent of companies that reclassified employees adjusted their base pay to offset the anticipated overtime premium, and nearly 86 percent placed restrictions on the amount of overtime hours nonexempt employees can work. Fifty six percent of surveyed employers had been sued within the past 10 years for alleged FLSA violations, and 27 percent had been sued more than once. Most survey respondents who had been sued indicated that they were sued in large and expensive class-action cases, and 38 percent of the respondents said those class actions had involved more than 1,000 people. Daniel Yager, general counsel and chief policy officer of the HR Policy Association, said, “These survey results underscore that, for both employers’ and employees’ sake, this 70-year-old law should be modernized, clarified and made relevant for today’s economic realities.” The HR Policy Association is a corporate member organization of chief human resource officers from companies who employ at least 1000 employees and have revenues in excess of $1 billion per year. It is headquartered in Washington, DC. The organization brings together the top HR executives from primarily fortune 500 companies.

SHRM’s perspective is that although the FLSA has been a foundation of labor law for decades, today it prevents employers from meeting the worklife needs of many of their employees. Giving employees some control over how, when and where work gets done raises compliance concerns with the FLSA and inhibits employers from providing workplace flexibility to non-exempt (hourly) employees. I

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RECOGNIZED FOR OUTSTANDING CONTRIBUTIONS TO MILITARY EDUCATION AROUND THE WORLD Council of College and Military Education

For nearly 30 years, Webster University has been an Academic leader with the military. With facilities at 55 bases and military installations coast to coast, Webster oﬀers you unparalleled opportunities to pursue a highly respected graduate program to advance your career.

One of the top Midwest Universities for Master’s Degree Programs • Master of Business Administration (MBA) • MA in Information Technology Management

• MA in Human Resources Management • MA in Management and Leadership

SHRM

MEMPHIS WHO'S who

SHRM-Memphis

WHO’S who? Jennifer Blake, Co-Chair

Jennifer Blake Leads the Comp & Benefits Career Emphasis Group Jennifer Blake has co-chaired the SHRM-Memphis Career Emphasis Group (CEG) on Comp & Benefits since 2009 when it began. She and co-chair John Wallace coordinate meetings bi-monthly for HR professionals interested in the compensation and benefits function of the human resource profession. The meetings are somewhat less formal than the typical monthly SHRMMemphis meetings, which give everyone an opportunity to network and get to know each other a little better. SHRM-Memphis is seeking an HR Benefits professional to assist with the CEG during 2012. If you are interested, please contact Austin Baker or Jennifer Blake. Their contact information is available on the website at www.shrm-memphis.org. The next meeting is scheduled for January and will be posted on the website also.

Congratulations V. Latosha Dexter, SPHR On being named to the Memphis Business Journal’s Top 40 Under 40 Class of 2011 for your professional achievement and community involvement. Latosha is an attorney at Rainey Kizer in the Employment Law and Civil Rights Practice Group.

Be sure to read the article on the 2011 Memphis Area Wage and Salary Survey Jennifer co-authored with Faye Lott on page 12 of this issue. M E M P H I S / J A C K S O N / w w w. r a i n e y k i z e r. c o m

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SMALL

BizBEST PRACTICES

UPDATE WORKERS’ COMPENSATION LAW

The TN General Assembly made several revisions to Tennessee workers’ compensation law in their last session which

COULD IMPACT SMALL BUSINESSES. B Y C H A R L E S W. C AVA G N A R O , J R .

Public Chapter 416 (HB1503/SB0932) now allows an employer and injured Public Chapter 416 (HB1503/SB0932) and employee to settle future medical benefits at Public Chapter 422 (HB2030/SB1550) any time so long as the settlement is approved by a court or the Tennessee Department of Labor (TDOL). Under previous law, the parties could not settle future medicals until 3 years had passed from the date of settlement or judgment. Parties still cannot settle future medicals when the employee is permanently and totally disabled. Also, if the parties have a dispute over whether a workers’ compensation claim is compensable or a dispute over the amount of compensation due, the parties can settle the claim without regard to whether the employee is receiving substantially the benefits provided by law. This settlement must be approved by a court or the TDOL who must determine that the settlement is in the best interests of the employee. The revisions also removed the monetary cap for disputed claim settlements allowing the parties to settle such claims for whatever amount is agreed upon.

•AMENDED LAW•

Changes were also made to an employer’s ability to communicate with an employee’s treating physician. You may recall in 2008, the Tennessee Supreme Court held in Overstreet v. TRW Commercial Steering Div., that an injured employee had an implied covenant of `confidentiality with the medical provider supplied by the employer. The Court ruled that an employer could receive only medical reports, prognosis reports, and bills from the provider without the

employee’s consent. The Tennessee General Assembly overturned this decision in 2009, removing this implied covenant of confidentiality and allowing an employer to communicate with a medical provider but under certain circumstances and if certain procedures were followed. The latest amendments removed most of those procedures and now an employer may communicate directly with any medical provider that the employer has authorized. The medical provider must also honor an employer’s request for medical information, medical records or reports, or professional opinions pertaining to the employee’s onthe-job injury. The employer may communicate with the medical provider in writing, in person, or by phone. An injured employee seeking workers’ compensation benefits must sign a medical authorization allowing the release of such information. These changes make it much easier for an employer to manage a workers’ compensation claim and return the employee to work. Employers can ask a medical provider for an opinion on whether the employee can perform certain jobs or about the extent of an injured employee’s restrictions.

The General Assembly addressed gradual injury claims as well. A workers’ compensation injury will not include cumulative trauma conditions, such as hearing loss, carpel tunnel syndrome or other repetitive motion injuries, unless the condition arose primarily out of and in the course and scope of employment. This applies to all injuries occurring after June 6, 2011. The opinion of the treating physician, who is selected by the employee from the panel provided by the employer, shall be presumed correct on the issue of causation but can be rebutted by a preponderance of the evidence. This change will make it more difficult for an employee to claim that a repetitive motion injury like carpal tunnel is work-related. Under previous law, if work aggravated a pre-existing condition, such as arthritis or degenerative disc disease, the aggravation would be compensable. Now, the injury will be covered by workers’ compensation only if the condition was primarily caused by work. www.HRprosMemphis.com

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SMALL BIZ BEST PRACTICES

Employee

HANDBOOKS Just as you spend time developing business forecasts, researching various marketing strategies, and producing financial reports, you should also spend time and energy focusing on your company’s employee handbook and policies. While often overlooked or considered of secondary importance in a business, employee handbooks that are comprehensive, current and user-friendly can enhance positive employer-employee relations and provide your leadership team with a blueprint for managing employee expectations, employee performance, and employee conduct. Public Chapter 422 (HB2030/SB1550) clarified and expanded last year’s law which required persons in the construction industry to carry workers’ compensation insurance on themselves.

Effective October 1, 2011, family-owned construction businesses may exempt up to five owners from workers’ compensation coverage and up to five officers from a corporation may be exempt from coverage as well. Members of a limited liability company or partnership with at least a 20% ownership interest are also eligible for the exemption. A general contractor on a commercial construction project also may select three service providers who are performing actual labor on the project to be exempt from coverage. The general contractor must notify the three providers who have been selected and keep records identifying the exempt providers. More information on the construction industry exemptions can be found on the Secretary of State’s Workers’ Compensation Exemption Registry website at http://tnbear.tn.gov/wc. I

Charles W. Cavagnaro, Jr Attorney with Evans | Petree, P. C.

Here are some

PRACTICAL TIPS

to consider for your employee handbook: 1

Customize your handbook to your business and your specific location. Seek input

Make sure you are aware of the different state and local legal requirements of

and “buy-in” from management when creating or updating your employee handbook.

each location in which you operate. Without a comprehensive review of state and local laws, your handbook is likely to be deficient --- and possibly even unlawful.

Ensure your handbook is not a contract. Prominently include the following: • Employment is at-will and for no specific duration • The handbook is not a contract and is intended as a guide for the

policies, benefits, and general information of the employer • The employer reserves the right to make changes to the guidelines, policies, and benefits contained in the handbook, as the employer deems appropriate, with or without notice

Additional provisions to consider including in your handbook: • Introduction to your company • Equal employment opportunity policy • Workplace harassment policy • ADA reasonable accommodation policy • Compliance with all applicable laws • Information about pay, benefits, and leave • Information about employer expectations and standards of conduct • Provisions required by specific state or federal laws, if applicable • Acknowledgement of receipt of handbook

Conduct periodic reviews of your handbook to ensure compliance with any

changes in the law or business policies and practices. Remember this rule: Ensure that your employee handbook is not a legally binding contract . . . but live by the principle that it is. Employers should take steps to ensure that management is trained on the policies contained in the handbook and that the policies are applied fairly and consistently.

Lisa Lichterman Leach and Amber Isom-Thompson presented “Employee Handbooks: Issues and Considerations” during the HR Bytes Luncheon at the offices of Kiesewetter Wise on November 9. The luncheon is a community event sponsored by the Lipscomb & Pitts Breakfast Club for HR professionals. 26

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EN MP CO

ITS IMPACT ONCEO

COMPENSATION B Y C Y N T H I A Y. T H O M P S O N

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) became the law of the land on July 10, 2010. Section 21F of the Act took effect August 12, 2011, which forever changed how publicly traded companies handle whistleblowers. Whistleblowers are now eligible for up to 30 percent of the monetary damages from a successful enforcement case if they report their findings to the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission. But wait! There’s more! Other provisions impact the Commission’s authority regarding executive compensation. There are some policies that are being implemented that will not only give more transparency to CEO pay, but it will actually tie pay to performance. Corporate boards already have full accountability for CEO compensation decisions. However, if shareholders feel as though the Board is not doing a good job in setting CEO pay, they now have a more direct vehicle for voicing their dissatisfaction, which is called, Say-on-Pay. With the passage of Dodd-Frank, companies will now be mandated to describe how they are aligning performance and pay and provide a clear description in their proxies of how pay is aligned with performance. The role of the SEC is to ensure that investors receive the information they need in order to make the most

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ON TI SA

THE DODD-FRANK ACT AND

informed investment decisions, and the intent of Dodd-Frank is to encourage better communication between companies and investors. Here are the four executive compensation topics required to be included in proxies. Pay versus Performance Disclosure – Companies will be required to disclose pay versus performance information in proxy statements for annual meetings, including the relationship between executive compensation actually paid and the financial performance of the company. CEO Pay Comparison -Companies will have to disclose: (a) the median annual total compensation of all employees of the company, excluding the CEO; (b) the annual total compensation of the CEO; and (c) the ratio of the amounts in (a) and (b). “Total compensation” is determined under the same rules as for determining total compensation shown in the Summary Compensation Table of the proxy statement. Most companies do not have systems currently in place to measure compensation for all employees on the same basis as the Summary Compensation Table. Compensation Clawback Policies Required - Companies will have to disclose the company’s policy on executive incentive compensation based on reported financial information. SEC listed companies must develop and implement policies providing for recovery (“clawback”) from current or former executive officers of “erroneously awarded” incentive compensation in the event of an accounting restatement required due to material noncompliance with financial reporting requirements under the securities laws. The adoption dates for rules on the above topics were moved to the January-June 2012 period. This delay means that these rules will not be in place for the 2012 proxy season. Disclosure of Hedging Policies – SEC listed companies will be required to disclose in proxy statements for annual meetings whether any employee, director or designee may hedge ownership of the issuer’s equity securities through the purchase of financial instruments, such as prepaid variable formal contracts, equity swaps, collars and exchange funds. The disclosure applies to hedging by executives or directors with respect to company stock received as compensation or stock they otherwise hold directly or indirectly. The rules will not require a company to have a hedging policy but the likely effect of the disclosure will be adoption of a policy by most companies and a tightening of many policies. The two remaining pieces of the Dodd-Frank Act rules affecting executive compensation are expected by the end of 2011. The first is the rules regarding disclosure by institutional investment managers of how they voted on say-on-pay and say-on-frequency proposals. The second is the rules providing the guidelines for the adoption of new listing standards addressing compensation committee independence and factors affecting compensation adviser independence along with disclosure rules regarding compensation consultant conflicts. This is simply a preview of things to come and certainly not meant to be an all-inclusive discussion of the Dodd-Frank Act as it relates to CEO and executive pay. If you work for a publicly traded company and you are working on your “To Do” list for 2012, don’t forget to add, “Contact my attorney about the Dodd-Frank Act.” I

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