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A supplement to BLR publications
Top 10 Best Practices in HR Management For 2009
Prepared for the HR Daily Advisor
A supplement to BLR publications
Top 10 Best Practices in HR Management For 2009
MA 01923. Downie Layout and Production: Sheryl Boutin This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. Editor in Chief: Margaret A. For those organizations that have been granted a photocopy license by CCC.com Top 10 Best Practices in HR Management for 2009 . If legal advice or other expert assistance is required.50 per copy. a separate system of payment has been arranged. Carter-Ward Managing Editor: Catherine Moreton Gray.D. USA. accounting.50. Inc. Smith Graphic Design: Catherine A. INC. This book may not be reproduced in part or in whole by any process without written permission from the publisher.D. It is sold with the understanding that the publisher is not engaged in rendering legal.Executive Publisher: Robert L.) © 2006–2009 BUSINESS & LEGAL REPORTS. The fee code for users of the Transactional Reporting Service is 1-55645-317-5/06/$.50+$. is paid directly to Copyright Clearance Center. Inc.. CT 06475-6001 860-510-0100 860-510-7224 (fax) http://www.O. $0. plus U. J.blr. Authorization to photocopy items for internal or personal use or the internal or personal use of specific clients is granted by Business & Legal Reports. or other professional services. the services of a competent professional should be sought. provided that the base fee of U. ISBN 1-55645-317-5 Printed in the United States of America Questions or comments about this publication? Contact: Business & Legal Reports. J. 222 Rosewood Drive. (From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers. All rights reserved.D.S. Editor: Elaine V. Quayle Production Supervisor: Isabelle B. Brady. $0.50 per page. J.S. Old Saybrook. 141 Mill Rock Road East P Box 6001 . Prince. Danvers. Legal Editor: Susan E.
21 Integrating a Multigenerational Workforce . . . . . . . . . . .17 Survey: Few Employers Capture Boomer Know-How . . . . . . . .1 FMLA Changes Are Here . . . . . .1 How the Updated ADA Affects You . . . . . . . . . . .1 #1 Compliance Focus: ADAAA and FMLA . . . . . . . . . . . . . . . . . . . . . .22 Best Practice: Mandatory Vacations at HP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Money . . . . . . .9 Preventing Discriminatory Layoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 Best Practice: Cancer Screening Saves Lives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Best Practice:Teach Workers Economics 101 . . . . . . . . . . . . . . . . .20 Persuading Older Workers to Stay: Is It the Money that Matters? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 No-Match Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 #4 Retirement of Baby Boomers . . . . . . . 30610800 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Cutting Healthcare Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Predicting the Future of Retiree Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Mental Health Parity Legislation Becomes Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 President Obama’s Future Plans on Health Care . . . . . . . . . . . . . . . . . . . . . . . .27 SSA No-Match Letter . . . . . . . . . . . . .22 #5 Recession Help . . . . . . . . . . . . . .20 Succession Planning to Fill the Baby Boomer Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Outplacement Services . .30 ©Business & Legal Reports. . . . . . . . . . . . . . . . . . . . . .25 Benefits and Retention Strategies in a Recession . . . . . . . . . . . . . . .13 Best Practice: Improve Employee Benefits Communication . . . . . . . . . . . . . . . . . . . . . . . . . .18 Transitioning into Retirement . . . . . . .9 Best Practice: Preserving Employee Morale . . . . . . . . . . . . .10 Training . . . . . . . . .3 #2 Layoffs/Reductions in Force . . . . . . . . . . . . . . . . . . .11 #3 Health Care in 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 #6 Immigration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 DHS No-Match Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Older Workers Benefits Protection Act (OWBPA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Worker Adjustment and Retraining Notification (WARN) Act . . . . . . . . . . . .9 Alternatives to Layoffs . . . . . . . . . . . . . . . . . . . . .16 Wellness Programs . . . . . . . . . . . . . . . . . . . . . Inc. . . . . . . . . . . . . . . . . . . .11 2009 Healthcare Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Table of Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . .31 Federal Contractors Must Now Use E-Verify . . . .35 Identity Theft . . . . . .44 What to Measure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Antidiscrimination Guidance for Employers Following the No-Match Letter Safe Harbor Procedure . . . . . . . . . . . . . . . . . . . . . .47 Measuring Your Results . . . . . . . . . . . . . .48 Tools for Better Communicating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 #9 HR Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Top 10 Best Practices in HR Management for 2009 .39 Corporate Social Responsibility and Ethics . . . . . . . . . . . . . . . . . . . . . . . .34 New Federal Privacy Law Barring Genetic Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 #10 Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 Types of Metrics Available to HR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 Organizational Success Through Honest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 #7 Privacy and Identity Theft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ethical Communication . . . . . . . . . . . .39 Commuter Benefits Bring Financial and Environmental Relief . . . . . . . . . . . .35 Employer Procedures for Handling Address Discrepancies on Consumer Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Strategic Alignment . . . . . . . . . . . . . . . . . .50 Best Practice: Ethical Culture at All Levels of Organization . .37 #8 The Green Movement and Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 Most Workers Trust that Employers Protect Personal Info . . . . . . .34 Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
passed by the House and Senate in September. This special report will discuss the top 10 best practices in HR management for 2009—in other words. 30610800 1 . Historically.S. The positive result of these changes is that HR professionals have the opportunity to play a more strategic role in the business. The challenge for HR managers is to keep up to date with the latest HR innovations—technological. was signed by President Bush on September 25. The stated intent of the ADAAA is to restore the ADA’s definition of disability and to ensure that the amended ADA provides a“broad scope of protection. Supreme Court decisions. The ADA defines a disability as: N A physical or mental impairment that substantially limits one or more major life activities N A record of such an impairment N Being regarded as having such an impairment The Court narrowed the definition with strict interpretations of the terms that determine whether an individual has a disability. the definition of disability has been narrowed through a series of U. how HR managers can anticipate and address some of the most challenging HR issues this year.S. Supreme Court’s interpretations of the terms“substantially limits”and“major ©Business & Legal Reports. The changes enacted by the ADAAA affect the core of the Americans with Disabilities Act (ADA) by expanding the definition of disability. and otherwise.Introduction The role of Human Resources is changing as fast as technology and the global marketplace. Those times have changed. This report will give you the information you need to know about these current HR challenges and how to most effectively manage them in your workplace. The ADAAA expressly rejects the U. kept personnel files and other records. legal. the HR Department was viewed as administrative overhead. handled benefits administration. and provided other administrative support to the business. managed the hiring process. How the Updated ADA Affects You The ADA Amendments Act of 2008 (ADAAA). HR processed payroll. Inc.” Since the ADA’s enactment in 1990. #1 Compliance Focus: ADAAA and FMLA The recent issuance of the ADA Amendments Act of 2008 and new regulations covering the Family and Medical Leave Act (FMLA) can affect your company in 2009.
the Court held that mitigating measures must be considered in determining whether an individual has a disability. In Toyota Motor Manufacturing v. a major life activity also now includes the operation of a major bodily function.life activity. bending. Significantly. an impairment that is episodic or in remission is a disability if the impairment would substantially limit a major life activity when active. Under the ADAAA. and using the Sutton analysis. 681 (2002)). Under the ADAAA. reasonable accommodations.” This will likely result in a sharp increase in the number of individuals found to have a covered disability. Episodic impairments. the employers may no longer take into account an individual’s use of 2 Top 10 Best Practices in HR Management for 2009 . the definition of disability is to be construed“in favor of broad coverage of individuals under this Act. In addition.. The ADAAA calls this interpretation“an inappropriately high level of limitation”and mandates an interpretation of the term“substantially limits”in a manner consistent with the findings and purposes of the ADAAA (i.” rather than simply restricting the individual’s ability to perform tasks in a particular job. Kirkingburg (119 S. respiratory. 2139 (1999)). the Court ruled that the employee did not have a disability under the ADA. sleeping. auxiliary aids and services (such as qualified interpreters for individuals with hearing impairments). and communicating. to reinstate a broad scope of protection under the ADA). the ADAAA broadens the definition of“regarded as having an impairment” and allows an episodic impairment to be considered a disability under certain circumstances. Under the ADAAA. v. circulatory. digestive. Ct. normal cell growth. endocrine. The ADAAA excludes ordinary eyeglasses and contact lenses from the list of mitigating measures.) The ADAAA expands the term“major life activity”by adding activities to those already enumerated in EEOC regulations. and“learned behavioral or adaptive neurological modifications. bladder. disability determination is made without regard to ameliorative effects of mitigating measures including hearing aids. including functions of the immune system. Williams (122 S. neurological. and reproductive systems. and employers will need to make sure they engage in the interactive process and provide reasonable accommodation to qualified individuals.” (Note: The ADAAA also gives the EEOC authority to issue binding regulations consistent with the purpose of the amended ADA. where the employee’s brain subconsciously learned to compensate for his monocular vision. The ADAAA expressly seeks to shift the focus from whether individuals have a disability to“whether covered entities have complied with their obligations. Ct. reading. United Air Lines (119 S. thinking. standing. concentrating. The new activities include eating. That compensation was found by the Court to be a mitigating measure. lifting. Ct. In Sutton v. Under the ADAAA.e. medical supplies. Inc. Substantially limits a major life activity. 2162 (1999)). medication.” It is likely that this last measure is intended to address the Court’s ruling in Albertsons. many more employees will be deemed to have a protected disability. to the maximum extent permitted by [its] terms. Mitigating measures. brain.” It also rejects the standard set by the Court that required the consideration of the effect of“mitigating measures”in the analysis of a qualifying disability. Definition of disability. the Court held that an impairment must“prevent or severely restrict”an individual in tasks that are of“central importance to most people’s daily lives. bowel.” Under the amended ADA. The ADAAA also rejects the EEOC’s definition of“substantially limits”as“significantly restricted.
When the need for leave is not foreseeable. The threshold issue of whether an individual has an ADA disability will no longer be the focus of most litigation. 30610800 3 . it defines“periodic visits to a healthcare provider”for chronic serious health conditions as at least two visits to a healthcare provider per year. A“transitory impairment”has an actual or expected duration of 6 months or less.mitigating measures when considering whether an impairment substantially limits a major life activity. it clarifies that if an employee is taking leave involving more than 3 consecutive calendar days of incapacity plus two visits to a healthcare provider. Intermittent leave. the two visits must occur within 30 days of the period of incapacity. Gaps in service. While the rule retains the six individual definitions of “serious health condition. Inc. Instead. the employee meets the requirement of being regarded as having a disability under the ADAAA. The final rule states that when an employee becomes aware of a need for FMLA leave less than 30 days in advance.” In other words.” it adds guidance on some regulatory matters. not just the job in question. with employees claiming an adverse employment action was based on an employer-perceived impairment. Serious health condition.” Sutton also held that“regarded as”means an individual was regarded as being unable to perform a broad range of jobs. an individual meets the requirement of being“regarded as” having a disability if he or she has been subjected to an unlawful employment action because of“an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.S. Here are summaries of some of the significant revisions included in the final rules. The final rule clarifies that employees who take intermittent FMLA leave have a statutory obligation to make a“reasonable effort”to schedule such leave so as not to unduly disrupt the employer’s operations. In addition. “Regarded as. it is likely that the focus will be on the individual’s ability to perform the essential functions of a job and whether the employer has met its obligations to engage in the interactive process and provide a reasonable accommodation. absent unusual circumstances. Second. The final rule adds a new paragraph that addresses the requirement that employees are eligible to take FMLA leave only if they have been employed by the employer for at least 12 months and have at least 1. The final rule states that ©Business & Legal Reports.250 hours of service in the 12-month period preceding the leave. Employee notice. First. Under the ADAAA. The first visit must occur within 7 days of the onset of incapacity. there will probably be an increase in“regarded as”litigation. An impairment that is“transitory and minor”is not covered. if an employee is fired because he or she is perceived to have an impairment. it should be practicable for the employee to provide notice of the need for leave either the same day or the next business day. an employee must comply with the employer’s usual and customary notice and procedural requirements for requesting leave. FMLA Changes Are Here The U. Department of Labor’s (DOL) new regulations covering the FMLA and addressing new military family leave entitlements for employees were designed to clarify the requirements that the FMLA imposes on both employees and employers and to improve the communication between employers and employees.
Light duty. DOL adopted a change that allows employers to contact the employee’s healthcare provider directly. Military caregiver leave. (5) counseling. the employer must provide the employee with a list of those essential job functions no later than the“designation notice”and specify in the designation notice that the fitness-for-duty certification must address the employee’s ability to perform those essential functions. However. (3) childcare and school activities. However. In the final rule. but in no case may it be the employee’s direct supervisor. However.although the 12 months of employment need not be consecutive. (2) military events and related activities. The law allows families of National Guard and Reserve personnel on active duty to take FMLA job-protected leave to manage their affairs—“qualifying exigencies. 4 Top 10 Best Practices in HR Management for 2009 . An employer may contact the employee’s healthcare provider for two purposes only: clarification and authentication of the medical certification. The employer may request no additional information beyond that included in the certification form. he or she is not on FMLA leave. time spent in“light duty”work does not count against an employee’s FMLA leave entitlement. Under the final rule. In response to privacy concerns expressed by employees. (6) rest and recuperation. (4) financial and legal arrangements. DOL added a requirement to the final rule that specifies the employer’s representative contacting the employee’s healthcare provider must be a human resources professional.” The rule defines“qualifying exigencies”as: (1) short-notice deployment. employment before a continuous break in service of 7 years or more need not be counted. if the employee denies the employer permission and doesn’t otherwise clarify an unclear certification. or a management official. The revision also specifies that the employee is not required to permit his or her healthcare provider to communicate with the employer. the employer may deny the designation of FMLA leave. Perfect attendance awards. before making any contact with the healthcare provider. Medical certification. if the employer does have such a requirement. The final regulation also clarifies that employers may require a fitness-for-duty certification to address an employee’s ability to perform essential job functions. Leave for qualifying exigencies for families of National Guard and reserves members. If an employee is voluntarily doing light duty work. the employer must first provide the employee an opportunity to resolve any deficiencies in the certification. Fitness-for-duty certification. a leave administrator. The regulation implements the requirement to expand FMLA protections for family members caring for a covered service member with a serious injury or illness incurred in the line of duty on active duty. These family members are able to take up to 26 workweeks of leave in a 12-month period. and the employee’s right to job restoration is held in abeyance during the light duty period. The final rule changes how perfect attendance awards are treated to allow employers to deny a“perfect attendance”award to an employee who does not have perfect attendance because he or she took FMLA leave—but only if the employer treats employees taking non-FMLA leave in an identical way.
the time frame for an employer to respond to an employee’s request for leave is extended from 2 business days to 5 business days of the employee’s request for leave or of the employer acquiring knowledge that the leave may be FMLA qualified.g. employees who take intermittent leave for planned medical treatment have an obligation to make a reasonable effort to schedule such treatment so as to not unduly disrupt the employer’s operations. The rules clarify that temporary transfers are allowed for employees taking only planned intermittent leave (the Department declined to expand temporary transfers to unplanned. The new rules prohibit employers from charging employees for the period of time that they are working (e. Employers. The old regulations said that the employee had only to“attempt”to do so. Similarly. employers may choose to waive procedural requirements even in the absence of an employee request to do so. the normal procedural rules subject to which the leave was accrued apply—unless waived by the employer—regardless of the type of paid leave substituted.g. or family leave to those situations for which the employer would normally provide such paid leave (e. ©Business & Legal Reports. or unforeseeable intermittent leave). unscheduled.. if an employer’s paid sick leave policy prohibits the use of sick leave in less than full day increments. N Absent extenuating circumstances. Inc. such policies may restrict the use of paid leave only to the employee’s own health condition or to specific family members). Additionally.. 30610800 5 . If an employer has no handbook or other written materials. however. but rather in the smallest increments the employer accounts for in other types of leave. N The new regulations contain a new general notice prototype. cannot be charged for 1 hour of leave). Intermittent leave. The final rule consolidates all employer notice requirements into a“one-stop”section of the regulations to clear up some conflicting provisions and time periods. an employee seeking to substitute paid personal leave for unpaid FMLA leave would need to provide 2 days’ notice. personal leave. This is a change from the old regulations. stop working ½ hour before end of shift. provided it is not greater than one hour. or“paid time off”for any situation covered by the FMLA. it must provide the general notice to new employees when they are hired. but they are not required to do so. For example.(7) postdeployment activities. As previously mentioned. medical. Substitution of paid leave. The final rule also clarified that accounting for leave need not be in the smallest increments that the employer’s timekeeping system can handle. In all cases. and (8) additional activities where the employer and employee agree to the leave. An employer may limit substitution of paid sick. may choose to waive such procedural rules and allow an employee’s request to substitute paid leave in these situations. employees would have no right to use less than a full day of paid sick leave regardless of whether the sick leave was being substituted for unpaid FMLA leave. of course. Employer notice requirements. as long as those terms are nondiscriminatory. This is a change from proposed regulations. if an employer’s paid personal leave policy requires 2 days’ notice for the use of personal leave. Employers must allow substitution of paid vacation. The rules clarify that an employee’s right to substitute accrued paid leave is limited by the terms and conditions pursuant to which the applicable leave is accrued.
when unforeseeable intermittent leave will be needed). the employer may be liable. for caregiver leave. (4) financial and legal arrangements. or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the armed forces in support of a contingency operation.N A list of essential job functions must be provided with the designation notice if the employer will require that the fitness-for-duty certification addresses the employee’s ability to perform the essential functions of the position. and (8) additional activities where the employer and employee agree to the leave.” The rule defines“qualifying exigencies”as: (1) shortnotice deployment. regardless of whether the leave is taken as a continuous block of leave or on an intermittent or reduced leave schedule basis. In the new regulations. Employer failure to provide notice. (2) military events and related activities. (7) postdeployment activities. Military family and caregiver leave. Wolverine World Wide Inc. a qualifying exigency leave is limited to service members called up to duty in National Guard and/or reserves.. It mimics the leave provision in 10 USC 101(13)(B)’s definition of“active duty. the employer is to inform the employee of the number of hours counted against the FMLA leave entitlement only upon employee request and no more often than every 30 days if FMLA leave was taken during that period.S. N Only one designation notice is required for each FMLA-qualifying reason per leave year. In light of the Court’s decision in Ragsdale. (3) childcare and school activities. President Bush signed a law that allows employees to take leave because of any qualifying exigency arising out of the fact that the spouse. The new law also allows eligible employees to take up to 26 workweeks for leave during a single 12-month period if the employee is the spouse. or next of kin caring for a military service member recovering from an injury or illness suffered while on active duty in the armed forces. The rule clarifies that if an employee suffers individual harm because the employer fails to follow the notification rules. The updated rule contains technical changes to be consistent with the U. (6) rest and recuperation. Under the new regulations for military caregiver leave. the term“active duty”is more expansive than for exigency leave. and certain retired members of service (not regular career service or state). N The employer may notify the employee of the hours counted against the FMLA leave entitlement orally and follow up with written notification on a pay stub at the next payday (unless the next payday is in less than 1 week. daughter. in which case the notice must be no later than the subsequent payday). son. 6 Top 10 Best Practices in HR Management for 2009 . the Department stated that an employee isn’t automatically FMLA-eligible just because the employer fails to provide the required eligibility notices to employees or provides incorrect information. the term“active duty”includes members of the regular armed forces (not just Guard/reserves)—this differs for exigency leave.g. daughter. Similarly. In January 2008. (5) counseling. Supreme Court’s decision in Ragsdale v. parent. N In situations in which the amount of leave to be taken is not known at the designation stage (e. son. Whether or not an injury or illness arose from active duty is a determination to be made by the treating healthcare professional as part of certification.
e. The law requires covered employers to give their affected employees 60 days’ notice of a“mass layoff”or a“plant closing”that is expected to last 6 months or longer. Who must comply with the WARN Act? Employers must comply with the WARN Act if they have: N 100 or more full-time employees. Workers on temporary layoff who have a reasonable expectation of recall are counted as employees. and to give state dislocated-worker units adequate preparation to assist affected workers. to seek retraining in a new occupation. that his or her employment has been temporarily interrupted and that he or she will be recalled to the same or a similar job. or N 100 or more employees. or insertion of a notice into pay envelopes.g. first-class mail. an employer may have several sites of employment under common ownership or control. Worker Adjustment and Retraining Notification (WARN) Act The WARN Act imposes restrictions on the way layoffs are handled. changes in market conditions. Employers must always notify the state. The Act defines part-time employees as those who work 20 or fewer hours per week and temporary employees as those hired with the understanding that their jobs will end when a specific project ends. In addition. When all employees are not terminated on the same date. yet there is only one“employer”for purposes of the Act. Employers must also notify local government officials and their state dislocated-worker unit. or new technology. through notification or industry practice. personal delivery. It is designed to give employees advance notice of the layoff in order to find another job. exclusive of overtime. The first and each subsequent group of affected employees are entitled to a full 60 days’ notice.#2 Layoffs/Reductions in Force A layoff is a termination of employment at the will of the employer. Employers must provide different types of information to employees depending upon whether they are unionized. including part-time employees who regularly work a total of 4. A worker’s last day of employment is considered the date of that worker’s layoff. The point in time at which the number of employees is to be measured for purposes of determining coverage under the Act is the date on which the first notice is required to be given. ©Business & Legal Reports. Notice may be sent by any method designed to ensure receipt at least 60 days before separation. Inc. 60 days’ notice. 30610800 7 . including downsizing. It may be temporary or permanent and can occur for a number of reasons. the date of the first individual termination within the statutory 30-day or 90-day period triggers the 60-day notice requirement.. An employee has a reasonable expectation of recall when he or she understands.000 hours per week.
N A statement as to whether the planned action is expected to be permanent or temporary and whether the entire plant is to be closed. and the name and telephone number of a company official to contact for further information. The notice must include: N A statement as to whether the planned action is expected to be permanent or temporary and whether the entire plant is to be closed. N The job titles of positions to be affected and the number of employees in each job classification. N The expected date of the first separation and the anticipated schedule for making separations.Union employees. N The nature of the planned action including whether it is a plant closing or a mass layoff. and N The name and telephone number of a company official to contact for further information. 8 Top 10 Best Practices in HR Management for 2009 . and N The job titles of positions to be affected and the names of workers currently holding these jobs. The notice must contain: N The name and address of the employment site where the plant closing or mass layoff will occur. these workers must get a notice if they will experience an employment loss. only the chief elected union representative must be given notice. If employees are unionized. While part-time employees are not counted in determining if a plant closing or mass layoff had occurred. N An indication of whether bumping rights exist. and N The name of each union representing affected employees and the name and address of the chief elected officer of each union. State notification. N An indication of whether bumping rights exist. N The expected date of the first separation and the anticipated schedule for making separations. Employees who may reasonably be expected to experience an employment loss and who are not represented by a union must be notified individually in writing. N The name and telephone number of a company official to contact for further information. The notice must include: N The name and address of the employment site where the plant closing or mass layoff will occur. and whether it is expected to be permanent or temporary. Nonunion employees. N The expected date when the plant closing or mass layoff will begin and the expected date when the individual employee will be separated. Employers must always notify the state dislocated-worker unit and the chief elected official of the local government unit within which the closing or layoff will occur.
Employers should consider providing outplacement services if employees have been working at the same company for a long period of time and may not have the tools necessary to successfully find another job. Work sharing allows employees to share the work that remains after some jobs are lost due to adverse economic conditions. and providing pre-layoff employment service registration. The advantage of retirement incentives is that they allow employers to cut costs without requiring employees to leave their jobs involuntarily. employees may work a reduced week or work every other week. prohibits age-based distinctions in the structure and administration of employee benefit plans. business-related criteria and be well-documented. but reflects the reduced hours. Reduced pay. Outplacement Services As a matter of goodwill. In some states. It may be acceptable to employees if their unemployment benefits during a period of layoff would be less than the reduced pay. Early retirement. some companies provide outplacement services to laidoff employees. a 1990 amendment to the Age Discrimination in Employment Act (ADEA). Outplacement services include assistance in rewriting résumés.Older Workers Benefits Protection Act (OWBPA) OWBPA. whereas smaller organizations may hire a single counselor or use existing resources to assist employees. to lend assistance in providing outside resources. The law protects individuals over the age of 40. Preventing Discriminatory Layoffs Employers should always avoid unlawful discrimination when considering layoffs. and separation agreements including in cases of layoffs. Alternatives to Layoffs There are alternatives to layoffs that employers can consider: Work sharing. the unemployment compensation laws allow employees to collect partial unemployment benefits during a work-sharing period. Some employers reduce their workforce by offering attractive incentives to employees who are about to reach retirement age. A reduction in pay works best if it is shared by all employees. to receive training. and to help employees cope with the stress of leaving the company. conducting employee skill surveys. Their hourly pay remains the same. including management. However. ©Business & Legal Reports. Outplacement counseling is designed to help terminated employees prepare themselves for a new job or a new career. severance packages. Under a work-sharing arrangement. job placements. the employer may lose some employees it would prefer to keep. Inc. Layoffs following seniority are generally not discriminatory under the federal Civil Rights Act. Each layoff decision should be made according to objective. career counseling. Larger organizations may hire outplacement services to assist employees. 30610800 9 .
need to prevail when laying people off. and unfortunately for many businesses. and thank the employee for those contributions. including any outplacement services that are appropriate for the level of the employee. and make certain that you have clarified the separation date to make sure the news sinks in. Employers“need to make sure they get information to the survivors about how they are supporting their colleagues who have departed. such as: N Giving as much warning as possible for mass layoffs. Explain to employees the type of services you have available for them. and get them involved early on. N Treat people with respect. benefits. “You need to take time to plan the layoff carefully and to meet with and prepare your managers for the process. outplacement. Berg suggests that after you have put together your plan of action. Then they need to stay very close to these employees in the weeks 10 Top 10 Best Practices in HR Management for 2009 . however.” Berg and PDI have suggestions for handling the process well. general manager for the Career Management Services division of Personnel Decisions International (PDI).” she notes. N Use good listening skills and acknowledge employees’ reactions. though that doesn’t always work. It’s smart to hire a good outplacement service or career transition firm to help you through the process. “Survivors. the next step is to talk with employees. in a private office.” says Berg. The first is to provide notification training for your managers because this is such a difficult talk. N Conducting a threat assessment to ensure the safety and security of all employees. Acknowledge the employee’s contributions to the company. Explain to the employees the logistics of leaving the company. No one enjoys the prospect of having to tell employees that the company is going to have to let them go. “You want your meetings to be one-on-one as much as possible. that means having to lay off employees. or other information that will be important to them.” “You need to be as aware of the people remaining as you are about the people you are letting go.” says Patricia Berg. Clear heads. and N Having information prepared in advance to give to employees regarding their severance. You should also provide references for them.Best Practice: Preserving Employee Morale There’s no escaping that the country is officially in a recession. A few other general pieces of advice from Berg include: N Inform employees at the beginning of the workday. You also need to allow adequate time to prepare for all the necessary contingencies. The best idea is to sit down face-to-face. says Berg. If possible. but it is important to stay well focused at a time like this and make certain that you handle the situation the best way you can. have your outplacement company or career transition firm on-site to meet with employees. rather than at the end of the day. with the individual and a Human Resources professional. if applicable. “This is such a tough job for managers to deal with.
that ensue in terms of focusing on the redistribution of work and redefining roles and responsibilities. They also need to be there to answer questions and to absorb some of the emotional impact the employees are feeling.” The survivors are wondering if there will be another round of layoffs and will their jobs be the next ones cut. Berg points out that“managers need to be prepared to deal with those questions without making any guarantees. Being there to answer questions, support the employees, and absorb some of the emotional impact really helps the survivors work through the process as well.”
The Workforce Investment Act of 1998 (WIA) reformed the federal job training system by consolidating about 70 federal programs into an integrated whole. The reformed system is intended to be customer-focused in order to help workers access the tools they need to manage their careers and to help employers find skilled workers. While WIA is a federal program, it will differ in how it is implemented by each state. The cornerstone of the WIA is the“One-Stop”service delivery system, which is designed to make information about and access to a wide array of job training, education, and employment services available for workers and employers at a single neighborhood location. “Core services”are provided at each One-Stop location and include: N Intake and orientation to the One-Stop approach N An eligibility determination N Initial assessment of skills and abilities N Access to job vacancy listings and job search and placement assistance N Information on providers of vocational rehabilitation activities and access to eligible training providers N Information on filing for unemployment insurance and availability of supportive services Through the One-Stop approach, employers have a single point of contact to provide information about current and future skills their workers need to possess and to list job openings.
#3 Health Care in 2009
The American economy is in trouble, and many people can’t afford health care. Employers are worried about their ability to compete on the global market when health care is costing them so much. Even before the fall, when some major banks failed or were bought and the stock market experienced dramatic downswings, a majority of American workers expressed concern about their financial situations and economic futures, according to the Rockefeller Foundation/TIME survey, Campaign for American Workers Survey.
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Some survey results. When comparing survey results from 2008 to 2007, several categories illustrated increased problems for workers who participated in the survey: N 25% did not go to a doctor because of cost (18% in 2007). N 23% went without health insurance (20% in 2007). N 23% did not fill a medical prescription because of the cost (17% in 2007). For Generation Y (survey respondents between the ages of 19 and 29), the future seems even more problematic. Of this group, 49 percent said that America was a better place to live in the 1990s, and 56 percent were worried about their own personal economic security. Also, 79 percent agreed that America was a lot less secure or somewhat less secure today than 10 years ago. “Americans want to work hard and improve their financial situations; 80 percent believe they are responsible for their own financial security,” according to the executive summary. Some solutions that survey respondents thought would help them secure their economic future include: N The government and employers providing basic necessities such as healthcare or retirement programs (70%) N New policies and programs that will create jobs (82%) N Initiatives to provide more access to family health care (77%) N Support to make it easier for people to work such as more paid family leave (68%) and government-funded child care (66%)
2009 Healthcare Trends
In the words of Samuel H. Fleet, president and CEO of AmWINS Group Benefits, in an article that he wrote for BLR, the country’s job-based system for health insurance is too entrenched to disappear. The healthcare industry generates about $2 trillion— that’s trillion, with a“T”—in economic activity annually, which means it has a strong interest in preserving the status quo. That means employers will be forced to continue down the path of using consumer-directed strategies and cost-sharing plans to escape the expensive, anticompetitive burden that health benefits have become. Expect continued pressure on healthcare providers to make their charges more transparent so that consumers can make choices based on real-cost comparisons. In addition, Medicare’s recent decision to force hospitals to absorb the cost of opportunistic infections, caused by pathogens at the hospital that compromise an unhealthy immune system, should raise consumer awareness of quality-of-care issues. The bottom line is that one-size-fits-all healthcare plans are a luxury of the past. Employer-provided health benefits will continue to become more customized as companies struggle to balance the competitive advantage of offering employees good, affordable health care with the increasing drag on their bottom line. Now, more than ever before, benefits professionals will have to become careful, discriminating shoppers who can sort through sales pitches to identify partners who can deliver value-enhanced offerings. What should you look for? Here are a few ideas:
Top 10 Best Practices in HR Management for 2009
N Deep discounts don’t add up to much if the underlying prices are inflated. Look beyond the promises of large insurers and examine the track record of third-party administrators who are eager for your business. Expect—in fact, demand—a partnership that focuses on synergies that drive down cost while simultaneously improving patient care by reducing the inappropriate and often wasteful use of resources. N Focus on proactive measures that rein in medical costs, rather than relying solely on controlling premium costs. Eighty percent of the average premium goes toward paying claims, providing a large target for money-saving strategies. Explore behavior management, such as wellness incentives and educating employees about the impact of their choices. N Demand accountability for claims management. Pharmaceutical and medical billing audits can reveal patterns of mistakes and process flaws that can be addressed to lower costs without affecting the quality of care.
Mental Health Parity Legislation Becomes Law
Insurance companies must cover mental and physical illnesses equally under a provision included in the so-called“bailout”legislation signed into law by President Bush (Emergency Economic Stabilization Act, HR 1424). The provision is the culmination of years of effort by legislators to expand on the 1996 Mental Health Parity Act, says Sen. Pete Domenici (R-New Mexico), who co-authored the 1996 Act and was a lead sponsor of the current parity legislation. “No longer will we allow mental health to be treated as a stepchild in the healthcare system,” Domenici said. “If you have insurance, then your mental-health care must be equal to the benefits you get for any other disease.” The new law expands parity to include: N Deductibles, N Copayments, N Out-of-pocket expenses, N Co-insurance, N Covered hospital stays, and N Covered out-patient visits. Companies with fewer than 50 employees are exempt.
Cutting Healthcare Costs
Knowing that healthcare costs will not decrease in coming years, the challenge for employers becomes learning how to keep the increases to manageable levels. There are a variety of strategies for cutting program costs. Among these are making changes in the areas of plan design, financing, purchasing, vendor management, care management, pharmacy, and retiree medical management. Consider the following specific steps in cutting program costs:
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N Enrollment in a high-deductible medical plan.” These are charges levied by companies to cover employees’ working spouses who could be covered under their own plan. and tools and resources to help workers become more educated healthcare consumers. N In smaller companies. say of $1. weeding out from the network specialists who cost much more than others. Kraus says.” BLR asked Steve Kraus. which may be fully or partially matched by the employer. which are a cost-effective way to co-fund health care.based National Business Group on Health:“Most plans include cost-sharing provisions. more employers are implementing consumer-driven healthcare plans (CDHPs). Also recommended are high-performance networks where experts analyze cost and practice patterns. Deloitte Consulting’s Steve Kraus reports. Employees save their own money. Volume purchasing power when negotiating with community providers leads to lower overall costs. Consumer-driven health care. the total cost of health care for employers decreases. those with at least 1. Joining a coalition of employers that leverages volume to purchase health coverage on a group basis can also help employers reduce costs. By removing them. But here’s a definition offered by the Washington. In order to curb rising healthcare costs. weight-loss programs. Volume discounts.500 deductible with coverage by a preferred-provider organization. stressing that plans vary widely from employer to employer. Many companies are implementing health savings accounts (HSAs). N A fixed annual allowance to cover“wellness benefits”preventive care such as physical exams and health screenings. The surcharge creates an incentive for the spouse to switch to his or her own plan. an HSA that acts like a 401(k)-type retirement plan. Surcharges.HSAs. for his reaction to that definition.000. He generally agreed with it. Network management. HSAs are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis. Another strategy for cost-cutting is introducing“dependent surcharges.000 employees. an employer-funded health reimbursement account (HRA). such as a $1. Dozens of concepts can hide under the trendy title of consumer-driven healthcare plans. is“enabling employees to understand the true cost of healthcare services and the options available to them for receiving care while requiring [them] to take on increased financial responsibility for managing their health care. principal-in-charge of Deloitte Consulting’s Human Capital practice and leader of the study. 14 Top 10 Best Practices in HR Management for 2009 . The core principle. a health reimbursement account or health savings account (HSA). D.C. and health club memberships to three-tier pharmacy plans. from smoking-cessation. for use in covering the deductible. N In larger companies. These are specialists who tend to order more tests and require more doctor visits than others. for each participant in a consumer-driven healthcare plan. high deductibles.” These are the basic features.
out-of-pocket cost calculators for employees.” ©Business & Legal Reports. Another challenge that employers face when offering a CDHP is providing workers with information they need to help make good decisions about healthcare cost and quality. and offered financial incentives in ways that enhanced the appeal of the CDHP according to the study. implementing a variety of methods can help employers save money over the long term.” says Melinda Beeuwkes Buntin of the RAND Corporation. they find that specific resources needed to help workers evaluate the cost and quality of care from specific providers are often lacking. The study found that employers are generally pleased with Web-based. .N With either HRAs or HSAs. 30610800 15 . or cancer N Wellness benefits. and weight-loss and smoking-cessation programs N Behavioral health benefits that especially target depression Use a variety of methods. and none rated it as excellent. heart disease. Just 2 percent rated cost information about healthcare providers as excellent. diabetes. However. The study included 42 large employers that offer a CDHP to their workers. In theory. forced employees to make an active choice at open enrollment. Employers were most likely to achieve high levels of CDHP enrollment when they devoted additional time and resources to communication. according to the study. The study found that employers agree that getting employees to enroll in these plans can be difficult when they also have more traditional health plan options. These are other features that either the insurer or the employer may add: N Third-party-provided pharmacy benefit management N Disease management. “Better information tools would promote employee engagement and help workers select the health plan that is best for them. and 5 percent rated it as good. N Unspent funds in both HRAs and HSAs can be rolled over from year to year. “Provider cost and quality tools that help employees make smart. such as a gym on the premises. Not surprisingly. usually by nurse practitioners. Inc. cost-effective decisions need to be part of the consumer-directed health plan package. according to a study conducted by Watson Wyatt Worldwide and the RAND Corporation. Best Practice: Improve Employee Benefits Communication Ninety percent of employers that offer a consumer-directed health plan (CDHP) cited employee communication as their greatest challenge in introducing the CDHP and during the plan’s first year. Only 10 percent rated information on the quality of care as good. the experts maintain that no single method will reduce costs dramatically. the employee pays $500 of his or her own money for the rest of the deductible. participants are more likely to ask a healthcare provider whether a test or treatment is really necessary or whether it can be obtained less expensively. Rather. for such chronic conditions as asthma.
a national cancer coalition of key leaders from the government. of course.” is available in its entirety at www. after heart disease. business. an employer can generate a cumulative savings of $1. including a change to allow Americans to purchase less expensive prescription drugs from other countries. Offering time off to take advantage of cancer screenings can also encourage early detection. Cancer is the second leading cause of death in the United States. on the company intranet.70 to $2. Send reminder cards around employees’ birthdays to encourage them to get screened. and cervical cancer screening. Include notices in newsletters. President Obama also has a plan that he says will reduce healthcare costs. And the U. and businesses.c-changeprojects. “Making the Business Case for Cancer Prevention and Early Detection. Educating employees about when and why they should quit smoking or be screened for cancer is important.” says C-Change. better outcomes for individuals. “By investing 18 cents to 79 cents per member. A study by America’s Health Insurance Plans and the Kaiser Permanente Center for Health Research found that investing in tobacco-cessation programs reaps immediate results.20 per member per month after 5 years. Proper screenings can prevent cancer and improve outcomes where cancer is found. C-Change says there are four prevention areas that can have the most impact: tobacco-cessation programs.org/ MakingTheBusinessCase. All children would be required to have healthcare insurance. families. screenings lead to lower costs and. low-cost ways to do that. Department of Health and Human Services says that the death rate from colorectal cancer can be reduced by at least 30 percent with regular screening for the disease. colorectal cancer screening. Invite a mobile screening unit. per month. Small employers would be exempt. Death rates are reduced by about 16 percent in women over the age of 40 who have mammograms every 1 to 2 years. As such.S.President Obama’s Future Plans on Health Care President Obama proposes a healthcare plan that would require employers to offer healthcare insurance to employees or pay a percentage of payroll to support a public healthcare plan. and nonprofit sectors. President Obama would also give a tax credit to small businesses to encourage them to offer healthcare insurance. Best Practice: Cancer Screening Saves Lives. and in break rooms about when and why employees should be screened. Money C-Change. the costs associated with cancer have a direct impact on business’ bottom lines. and there are simple. breast cancer screening. such as a mammography van. 16 Top 10 Best Practices in HR Management for 2009 . and the new president’s plan calls for subsidies for people who are unable to afford insurance. With more than half of Americans covered by health insurance provided through employer plans. Its white paper. recently launched an initiative designed to encourage employers to add cancer prevention and screenings to their health insurance policies and programs. to come to the workplace.
Others are small. based on a good deal of research. ©Business & Legal Reports. they say. Employers. but two topic experts provide a fresh perspective on surviving the brain drain. 2006). Misconceptions on both sides. In today’s service and knowledge economy. have these wrong impressions about older workers: N Older workers can’t handle the physical demands of their jobs. but how will you fill the knowledge gaps left by their departures? There’s been much talk about phased or delayed retirement programs. They should also participate in the program once it is up and running to set an example for other staff. have shifted their focus to include both older employees and their employers. they explain their recommendations. When wellness programs are not successful. On the lecture circuit. co-authors of Your Retirement Your Way (McGraw-Hill. Some such activities are full-blown programs. finite activities that are part of overall HR and safety. This figure certainly suggests taking a closer look at instituting a wellness program if you don’t already have one in place at your company. Wellness programs include: N Exercise and fitness N Smoking cessation N Blood pressure management N Weight management N Stress management N Cholesterol management N Nutrition Studies of the wellness plans of 200 companies completed by the American Journal of Health Promotion conclude that the return on investment (ROI) for employee wellness programs can be as high as 348 percent in 3 to 6 years. #4 Retirement of Baby Boomers Are you prepared for the retirement of lots of your older workers? Never mind whether you can find warm bodies to replace them (and even that may be tough). employer-sponsored wellness programs have been successful in helping employees make better choices. Done well. for hanging onto the much-needed knowledge and talent of older workers. Alan Bernstein and John Trauth. most employees can do most of the jobs they’ve always done. since publishing their book. 30610800 17 . Senior leadership must communicate the importance of the wellness initiative to employees up front. Inc. it’s often because there’s a lack of senior management support and/or the original planning wasn’t as comprehensive as it should have been.Wellness Programs There is little question that employers can have a positive impact on employee behavior.
18 Top 10 Best Practices in HR Management for 2009 . too-brief tenure. The first step is to prepare a 5-year plan of business objectives for change and growth. they can be just as—or more—productive than younger workers. Instead. The authors believe the reasons are that older employees are burned out from doing their current jobs.to 6-month sabbatical to assess their needs and wishes. have lower turnover. N Older workers are short-timers. N Older workers can’t or won’t learn new skills. The truth is that they are more loyal. the worker and the employer together structure a new. What should happen. and Human Resources should approach those people to discuss their retirement needs and wishes. and have positive work values. they do learn differently but continue to enjoy chances to learn something new. Based on those activities.046 Human Resources executives by Novations Group.N Older workers are just coasting to retirement. is that chosen older workers take a 1. they’re less reckless than younger workers and subject only to repetitive strain. Do any have skill sets and/or institutional knowledge that will be essential to keep? The answer is likely yes. MORe (Mutually Optimized Renewal). Bernstein and Trauth see real problems with the phased retirement programs some large employers have used:There’s low enrollment. Their work tends to be more accurate and their decisions more thoughtful. which can be eased. Survey: Few Employers Capture Boomer Know-How Only one quarter of large organizations are making an effort to transfer knowledge from retiring Baby Boomers to other employees. Bernstein and Trauth think they have an effective answer to the looming talent crunch in which employers won’t be able to find enough workers with the right kinds of skills to fill needed positions. assume that all workers aged 59 or over now will retire before the end of the 5 years. In fact. Next. including the employee skills that will be needed to get from here to there. so not worth the investment. a global consulting and training firm based in Boston. and failed mentoring processes. Instead. part-time job tailored to the worker’s personality and interests. Not only should the potential mentor be thoroughly trained in how to carry out the responsibility but the personalities and interests of potential mentees should be carefully assessed to find the right match or matches for the mentor. Here are elements of their program. Bernstein and Trauth advocate. That renewal break should be accompanied by completing a reliable personality profile that reveals the kinds of work they like best and what job aspects lead to stress. The other part of the bargain is the one or more mentoring relationships that will aid the organization in transferring the older worker’s skills and knowledge to future leaders in the firm. according to a survey of 2. “a new retirement paradigm”for retaining older workers. and they haven’t been properly trained for mentorship. N Older workers get hurt more often and heal more slowly. they’ve not thought enough about what they want out of work and life in the future.
How to invest retirement funds. executive vice president at AXA (www. Twenty-nine percent of respondents said that while they currently have no process for transferring knowledge from retiring Baby Boomers to other employees. There are several things near-retirees need to think about during the last few years of their working life. Inc. N Contact your retirement administrator and ask if it can provide a speaker for a brown-bag lunch for employees over age 50. But when it comes time to think about the third decision.or no-cost.com). You can access tools through organizations such as AARP the company that provides . is available online (www. and N Ask employees what they need from you. Many are low. 30610800 19 .” Most companies are doing well at helping employees with the first two by providing a plan. they plan on developing one.The survey found that just 4 percent of respondents said they have created a formal process to pass on know-how. AARP also suggests starting early to determine how much money to expect from Social Security and from the corporate plans. The organization’s self-assessment tool. N Assess how you are doing in preparing employees to live off their retirement savings. The answers help the employee think through possibilities and learn how much money those possibilities might take. your retirement plan administration. “People have three critical decisions to get ready for retirement. Retirement Roadmap. and even matching contributions. In fact. encouraging saving. “The first is to save. and the third is the distribution—how you’re going to live off of your savings.According to Bill McDermott. How to help employees near retirement prepare.aarp. HR can take steps in the right direction without having everything figured out at once. “71 percent of the employees we surveyed said they believe it is their employer’s responsibility to prepare them for retirement.” says McDermott.org) and leads people through a variety of questions in a dozen categories designed to guide the process. N Make sure employee benefit statements are provided regularly. Forty-four percent of employers said they have no process and have no plans to develop one. they’re waiting for you to help them with the transition into retirement. many companies are lacking. Transitioning into Retirement According to a recent survey by AXA Equitable Life Insurance Company. the second is to invest. ©Business & Legal Reports. or via the Internet. there is a disconnect between how you view the next step in the retirement process and how employees view it.axa-equitable. You can make that easier by providing benefit statements regularly. while 23 percent report doing so informally. educating about investments. One of the critical decisions employees must make when retiring is how to invest their retirement nest egg so it will last their lifetime. AARP recommends that people start by thinking about how they want their retirement to look.
practices. That means retirement savings are more important than ever before. Of course. Half of the respondents who had a defined benefit pension plan said that if they had been able to receive a full pension and still work part time. 40 percent will increase cost-sharing requirements. He expects that an unmarried employee retiring at age 60. and 30 percent will increase out-of-pocket limits. they also need to be on board with wellness and disease management initiatives. that would have been extremely or very effective in encouraging them to delay retirement. For example. the amount would be substantially more. just 2 percent said they are likely to terminate all subsidized health benefits for current retirees. 80 percent said they will likely increase retiree premium contributions. says Robert Schmidt of Milliman. Most (79 percent) were men. “I’m seeing a trend.000 of your retirement savings to pay for health care. were between the ages of 55 and 65. You need me? Almost half (48 percent) of the retirees said that if they had felt truly needed for an assignment. In a recent survey. “Plan to just chop off $100. 36 percent are likely to increase drug co-pays or coinsurance.981 respondents worked in the aerospace and defense industries and at the time of the survey. The 4. says Schmidt. it would have been effective in getting them 20 Top 10 Best Practices in HR Management for 2009 .” he says. There are so many more options for them now. or those retiring from an employer that doesn’t subsidize part of the cost of coverage. Kaiser and Hewitt asked companies sponsoring retiree health benefits about their future plans. with an initial insurance premium cost of $227 per month (subsidized by a generous employer) and assuming an optimistic health cost trend of 8 percent per year. and incentives that would have encouraged them to delay retirement.” Schmidt advises. However. In the Kaiser/Hewitt Survey on Retiree Health Benefits. Money please. Robert Schmidt believes early retirees are more likely to maintain some form of employer-sponsored benefits. Not only do employees and retirees need education about the cost of health insurance.000 using a 5 percent discount rate.” Persuading Older Workers to Stay: Is It the Money that Matters? The Employee Benefit Research Institute (EBRI) asked workers who had retired in 2003 or later about company policies. That’s a present value of $95. they’re providing it to early retirees. and 83 percent were married when they retired. and letting post65 retirees go on their own. for married people. can expect to need $205. “If companies are going to provide retiree health care. Fortunately for retirees. Nearly two-thirds said they would have seriously considered an offer from their employer asking them to stay on. the highest percentage of respondents pointed to changes in their plan designs that will mean increased costs to retirees.000 for the purchase of health insurance if he or she lives to age 85. money does enter the equation. Just ask.Predicting the Future of Retiree Health Care Educating employees may be the most important thing you can do to help them plan for retirement health costs.
According to the EBRI survey. Almost two-thirds (63 percent) of the survey respondents said that the offer would have been much more effective if they had known about it in the 2 years before they communicated their intention to retire. skills. This will include the knowledge. If the company is not prepared and has not invested in its key employees. And nearly half (46 percent) said that they would be encouraged to continue working part time if the company continued to subsidize their health insurance benefits at the same level as full-time workers. Communicate early. Succession Planning to Fill the Baby Boomer Gap Employers rightly fear the aging of the workforce and the significant“brain drain” many companies will experience as Baby Boomers begin to retire. Inc. start your efforts early. 30610800 21 . however. the company will likely find itself paying top dollar to attract talent from outside the organization in a fierce competition with other public and private employers. without requiring legal changes. EBRI points out. ©Business & Legal Reports. Succession planning as a retention strategy. when and in what areas or jobs? Knowing when and where there will be key vacancies or a need to replace accumulated skills and knowledge will help focus on future needs. Companies must plan not only for staffing needs at the top of the company. it is important to analyze the current workforce. Study the demographics. core competencies. experience. but must also identify and plan for future human capital needs at all levels—planning for the future growth and success of the company. and experience the company will need over the next 5 to 10 years in order to achieve goals and continue to be successful. Employees who feel the company is making an investment in their development and career planning are more likely to be committed to the organization long term. Human Resources managers need to involve senior managers in the planning process so that succession planning and the development of employees are adopted as strategic goals. Senior management must play a role. Other compensation-related incentives may be almost as compelling. that this would require a change in federal law. and if so. a working succession plan can have a significant impact on staff retention. skills. A partial pension had the same effect for 44 percent of respondents. Identify the talent. as well as current vacancies when new employees are recruited and hired. abilities. and even personality traits that will be needed to fill top management positions and other positions that will be essential to the company’s long-term success. Link strategic goals with human capital needs. Early in the process. In a highly competitive labor market such as the one predicted over the next 10 years. Is brain drain going to present a significant problem for the company. One-third of the retirees said that a pay increase would have been an effective way to get them to stay. when the need to fill a position arises. the timing of the offer is important.to delay retirement. If you’d like to encourage workers to stay with you a little longer. with 56 percent ranking it among the top two incentives. Senior management will be more likely to participate in the process if it is linked to the long-term strategic goals of the company. education.
N Create focus groups of mixed generations to brainstorm ideas about achieving company objectives. you’d better get ready to hire Gen Ys. N Make it easy for older workers to obtain either in-house or external training in new technologies or methodologies. consider taking some of the following action steps: N Establish a series of mentor relationships that pair older workers with younger ones. Generation X (ages 30 to 42. One way to do this is through the use of metrics and another is to make sure managers are evaluated on how well they implement the plan. or change retirement savings plans (20 percent). and gender in addition to appropriate functional and departmental representation. N In populating ongoing project teams. strive for age diversity as well as diversity of levels. N Using 360-degree reviews for evaluating the mentoring process by having the mentor evaluate the employee and vice versa. despite problems your older staffers may think they’ve had in adjusting to Gen X. Furthermore. One way to keep the focus on succession planning and developing employees is to track and measure the success of the plan at the department and company level. A recent study by consulting firm Hay Group found that more than 30 percent of respondents are freezing or planning to freeze base salaries. So. making this year’s forecast the worst 22 Top 10 Best Practices in HR Management for 2009 . encourage pairs to meet at least monthly for a year or more to work on career goals set by the younger workers. race. How do you cope? In order to increase the amount of workplace interaction among employees of different ages. Suggestions include: N Measuring the total number of open positions identified as key positions in the succession plan that were filled by high-potential employees. change healthcare benefit plans (27 percent). Respondents also reported they will change training and development programs (28 percent). And some 20 percent will either freeze workforce size or conduct layoffs in the near future. another survey done by Career Protection predicts a 37 percent increase in layoffs this year compared to last.Measuring success. Pair older workers with younger workers who may have more experience with new technologies. #5 Recession Help Across the nation. give or take) simply can’t fill all the workforce gaps:That cohort is too small. and you’re going to need them. employers find it nearly impossible to ignore dropping revenues and profits. Integrating a Multigenerational Workforce As your“Radio Babies”(approximate ages 62 to 77) and Baby Boomers (roughly ages 43 to 61) retire or begin to phase out. They’re the biggest cohort since the Boomers. with half that number doing so for all employees.
companies tend to be leaner than in past recessions because of outsourcing. Not only do employees need their individual feedback from the company’s performance management system but they also need to know virtually everything that top management knows about the organization’s ongoing results. He firmly believes that layoffs should be“resisted” because talent is so scarce that if a firm downsizes. Are they expected to be temporary or permanent? Will outplacement services and/or severance packages be provided to those laid off? What services will be available for those not laid-off— the survivors? ©Business & Legal Reports. There’s a big contradiction here. it may not be able to rally when the recovery comes. Avramidis suggests that employers go further by explaining beforehand exactly what will happen if layoffs are conducted. The first step in preparedness is a vibrant and accurate performance assessment process that identifies where every employee stands in terms of the organization’s goals. BLR subscribers have told us they’re considering such moves as suspending their company’s 401(k) match and whether they should warn employees that layoffs may be necessary. employers have conflicting needs: they feel pressure both to cut costs. After all. That process will inform both front-line supervisors and HR pros about the key players in the company. as well as who’s in line for important positions in terms of succession planning. “Companies should approach this downturn by continuing to invest in human capital.000 jobs last March.1 percent from 4. you’re not just looking for warm bodies. or should marketing efforts at least be cut back for them? Do workers have ideas about redundant processes or other kinds of activities that could be eliminated to save money? Given detailed and up-to-date information on their employer’s financial results. Manny Avramidis.” says Avramidis. boosting the unemployment rate to 5. Armed with that information. And DOL reported that the U. Survey respondents were nearly 1. economy scuttled 80. Inc. and where he or she may need to improve.S. the employee’s contributions. and also to hang onto the talent they really need. employees will be more prepared for news of layoffs should they be necessary. employees need to be engaged in developing strategies for the corporate response.400 corporate executives nationwide. 30610800 23 . However. Clearly.8 percent.” he advises. senior vice president of Human Resources for the American Management Association (AMA). And. the one that began in 2001. in his tenure with AMA. Avramidis points out that a rising rate of unemployment doesn’t necessarily mitigate the war for talent. many available workers lack the skills that employers seek. The foundation of his approach to this recession is communication. global mergers and acquisitions. advises organizations to cope with the possibility or the reality of recession in several ways. Are there less profitable product lines that should be dropped. “Be transparent. then.in 5 years. with human capital usually being the biggest drain on expenses. Avramidis has been through at least one other recession. and layoffs they may have conducted in the early 2000s. The same Hay Group respondents who said they were considering layoffs and benefit reductions also said that their number 1 concern about the recession was how to retain and motivate their top performers.
have used employees’ time as a cost-cutting tool. HP tells the Monitor that 95 percent of its workforce joined in the June cost-cutting measure. in advance. “I’m advising companies that it’s an excellent idea. depending on the company’s financial circumstances.” Work slowdowns and subsequent cuts in employees’ workweeks are nothing new in the manufacturing sector. Avramidis recommends that the first candidates for layoff be chosen based on where they work in the organization. In June. Best Practice: Mandatory Vacations at HP Companies caught between a need to cut costs and a desire to avoid layoffs are turning increasingly to forced vacations. Avramidis believes.In addition. Only an employer that has developed significant credibility and employee loyalty may be able to get away with such across-the-board penalties. asking employees to take paid vacation time—instead of rolling it into another year—helped in accounting terms because paid vacation is a funded liability that carries over from year to year on the company’s books. it asked them to voluntarily forfeit some earned vacation time. target first the employees in less-profitable lines of business or activities the company may eliminate. And you’re telling employees that you still want them to be a vital part of your organization. according to the Christian Science Monitor. a Boston-based consulting firm. Hewlett Packard (HP) asked its employees last April to voluntarily take an additional 6 days of paid vacation time off before the end of the fiscal year in October. In order to resist layoffs.” he cautions. The plan needs to be presented clearly. don’t let a top performer go simply because he or she is in the wrong line of business. Then. because they penalize all employees the same way rather than differentiating among them based on their performance and their organizational roles. First. Yet experts tell the Monitor that this recession marks the first time a wide variety of businesses. both large and small and from many different sectors of the economy. HP closed all of its offices for a week at Christmas. closing saved HP the cost of keeping offices open. Experts say the key to successful implementation of a time-off cost-cutting measure is in how it’s communicated to workers.” he concludes.” says Bruce Katcher. saving the firm $130 million. or do a combination of the two through the end of the fiscal year. And in December. that you’re committed to them. take a small pay cut. Second. shift the focus to where employees stand in terms of their performance. Even then. if a second layer of jobs may need to be cut. That is. The other measures also saved an undisclosed sum of money on two fronts. should employers take such preliminary measures as freezing salaries and/or reducing such benefits as healthcare coverage or retirement plans? Avramidis is reluctant to endorse such moves. “Don’t force out your best people because they can no longer afford to stay with you. 24 Top 10 Best Practices in HR Management for 2009 . These employers reduce their employees’ work hours by asking them to take vacations that are either paid or unpaid. with assurances that the company is committed to its staff. president of The Discovery Group. “The advantage for the organization is that you still keep people around for when business turns around. which included 3 days off with no pay. “Do your best to protect your most valuable human capital.
New York. N Implement creative. The factory was almost shut down in 1984 because of flagging sales and labor unrest. so they will understand the tough decisions managers must make these days. However. you must be careful not to lose valuable people that“you’ll need when you start up again.Best Practice: Teach Workers Economics 101 Amid all the bad economic news. workers were seeing connections between the classroom discussions and their working conditions. some companies are giving their workers crash courses in basic economics and personal finance. the Cornell instructors persisted and ended up teaching on everything from the impact of technology on the workplace and the dynamics of international competition to the intricacies of corporate income statements and the factors that influence the pricing of commodities. is showing that giving employees the big picture can bolster their morale and even produce bigger profits. Maryland. ©Business & Legal Reports. Before long. When company-hired instructors from Cornell University’s School of Industrial and Labor Relations arrived. they sold it to Outokumpu Oyj. In a breakout session at the 21st Annual Benefits Forum & Expo held in National Harbor. Benefits and Retention Strategies in a Recession The impact of current economic conditions is being felt in the workplace. according to The New York Times. and N Communicate often and honestly to employees to bolster flagging engagement and productivity. The workers“saw it as us against them. Local investors bought the plant and quickly turned it around. explains George Lane. However. and an RIF will have a near-term impact on the bottom-line. the school’s director. a Finnish mining and metals conglomerate. principal at Mercer. However. Outokumpu had given the local investors a healthy profit. One way to do that:Teach workers the economic and financial basics of the company’s markets. and it knew that it would have to raise workers’ productivity over the long haul to make the investment pay off. After learning about manufacturing costs in other countries. they came away with a more sophisticated understanding of how their own wages were set. in 1990. they found a high level of hostility toward Outokumpu. a takeover by this evil foreign company. One such employer. 30610800 25 . the Outokumpu American Brass factory in Buffalo.” he explains.” employers should: N Be looking for new ways to generate sustainable reductions in benefit costs using innovative strategies that do not adversely affect perceived value. In the face of slow growth. HR and benefits professionals were given some valuable tips for retaining and engaging their workers during tough economic times. highly-targeted strategies to recruit and retain the optimal workforce for long-term success.” recalls Lou Jean Fleron. that some organizations would take measures such as a reduction-in-force (RIF) is understandable. for instance. According to Mercer’s 2008“Report on Human Capital Management for Slow Growth Times. Inc.
a global specialist IT services and solutions provider. engage. and N 10 minutes of Q&A.” including retirement and personal financial planning implications.Lane asserts that you should be doing these three things all of the time. Dimension Data has leveraged its relationship with a financial advisor from its 401(k) plan. Dimension Data wants their managers to have the ability to manage the relationship between the employee and the company. She says that by providing detailed information regarding the value of their benefits. Showing how a specific employee utilized a benefit program that saved him or her money is much more effective than just explaining the benefit. and retain talent for high performance. Lucier also avidly supports the use of total compensation statements. Maia Lucier. and communicating Dimension Data’s 401(k) investment review process and due diligence (something more employees ask questions about during tough times). This feature provides a profile of an employee and might explain. develop. explained how her company has added no. such as an“around the office”feature in its monthly newsletter. These 30-minute conference calls were created to address economic uncertainties for employees and consist of the following: N A 10-minute recap of recent economic developments (in plain English). noting that the extent to which employees value and understand their benefits package impacts job satisfaction and loyalty to the organization. In this program. managers are taught how they can help attract. Dimension Data is also providing health expense communications for employees. you may be able to hold onto valuable employees who would otherwise be tempted to take a job elsewhere for a small base salary increase. They are also educated about company benefits so that they can communicate benefits value to employees. Dimension Data has a“Leading Talent”program for its line managers. Lucier has found.and low-cost ways to beef up its benefits in creative ways while continuing to strive to attract and retain talent against the backdrop of a troubled economy. With this in mind. how he or she saved money by using mail order drugs. asking him to participate in new monthly“Think Financial Wellness”conference calls for employees. director of compensation and benefits for Dimension Data. but a recession underscores the importance of such actions. N A 10-minute interpretation of“what does this mean for me. 26 Top 10 Best Practices in HR Management for 2009 . showing them how they can utilize their benefits to the fullest extent. The company has also created“What you should know as a Dimension Data employee”webcasts which communicate to employees by promoting learning and development opportunities. for example. in terms of communication. Lucier emphasized the importance of frequent and effective communication to employees when it comes to their benefits. Finally.
In response to the lawsuit and the court order. including conducting a survey of the impact of the regulation on small business. On August 15. DHS has made it clear that the regulation does not have application to no-match letters that reference employees hired before November 6.#6 Immigration Immigration was a hot topic in the recent presidential primaries and national election. the Department of Homeland Security (DHS) issued regulations that defined the term“knowing”to mean having actual or constructive knowledge. The preamble does clarify that the obligation of an employer to provide prompt notice to an affected employee after the employer has completed its internal record checks and has been unable to resolve the mismatch will ordinarily be satisfied if the employer contacts the employee within 5 business days after completing its internal records review. In addition. DHS regulations set out steps that an employer may take after receiving a no-match letter from DHS or SSA. DHS filed a motion asking the judge to suspend this case so that it could rewrite the regulation to address the court’s concerns. and complying with immigration laws continues to be a challenge in Human Resources management. A“no match”does not mean that an individual is undocumented. The bar will last at least until there is a full trial on the question or the order is reversed by a higher court. the Social Security Administration (SSA) or DHS informs an employer that the name and Social Security Number (SSN) reported for an employee or the immigrant status or employment authorization documents do not match their records. DHS has issued a supplemental proposed rule that leaves the August 15. No-Match Letters The Immigration Reform and Control Act of 1986 (IRCA) makes it illegal for an employer to knowingly hire or to continue to employ an individual who is or may become an unauthorized alien. 2007. because the statutory bar against continuing to employ unauthorized workers does not apply to such employees. The preamble to the supplemental proposed rule includes an analysis of DHS’s authority to issue the regulation and an analysis of the impact of the regulation on small business intended to address the court’s concerns. constitute constructive knowledge that an individual is undocumented. Regulations on hold. Regulations reproposed. Inc. in certain circumstances. If these steps are followed. 2007. but it could. In a no-match letter. On November 23. A federal district court judge has barred SSA from sending no-match letters on the grounds that DHS exceeded its authority in issuing the regulations. an employer may avoid being considered as having constructive knowledge that a particular individual is an unauthorized alien based on a no-match letter from one of these agencies. regulations intact. 2007. The Suspended/Reproposed No-Match Letter Regulations The status of the no-match letter regulations will likely be resolved by a final court ruling either barring DHS from implementing the reproposed regulation or that the reproposed regulations do address the court’s concerns and may go ©Business & Legal Reports. 30610800 27 . 1986.
Inform the SSA. In the safe harbor. Store the record with the employee’s Form I-9. the no-match letter may not serve as the basis for finding that the employer has constructive knowledge that an individual is working illegally. The DHS regulations provide that by taking“reasonable steps”after receiving a no-match letter. transcription. employers should also follow the safeharbor procedure. and 5. Verify with the SSA that the discrepancy has been resolved. transcription. vary somewhat depending on whether the no-match letter came from SSA or DHS. N If there are no typographical. and Social Security Number Verification System screen shots). correspondence. or similar clerical errors. 3. e-mails. The DHS regulations set out the specific steps that. if taken. 28 Top 10 Best Practices in HR Management for 2009 . If these five steps are completed within 30 days of receipt of the no-match letter. are automatically deemed to be such reasonable steps and provide the protection of a“safe harbor”from liability for violating IRCA based on a no-match letter. if two or more newly hired employees have the same or consecutive numbers. The procedures. In such situations. 4. Warning: Time is critical because if the employee confirms that the records are incorrect. However. Correct the records. The following is an analysis of the reproposed regulation that DHS plans to implement. If there is a typographical. or similar clerical error in the employer’s records or in the employer’s communication to the SSA. knowledge that an employee is unauthorized must not be inferred from an employee’s foreign appearance or accent. the deadline to correct them is 30 days from receipt of the no-match letter. the employer qualifies for the safe harbor. computer-generated printouts. Make a record of the manner.into effect. and time of the verification (this includes documentation of telephone conversations. move on to Step 2 immediately. 2. transcription. date. Safe harbor. SSA No-Match Letter After receiving a no-match letter from SSA. employers should do the following: Step 1—SSA No-Match Letter N Check the employer’s records immediately to see whether the discrepancy was caused by a typographical. or similar clerical error: 1. while similar. Procedures for Avoiding Liability To qualify for the safe harbor. an employer must follow the procedures set out in DHS regulations. Note: Employers may come upon information that an SSN might be invalid in other ways—for instance.
computer-generated printouts.m. the employer qualifies for the safe harbor. Verify with the SSA that the discrepancy has been resolved. In the safe harbor. Verify with the SSA that the employee’s name matches the number assigned to that name in the SSA’s records. and time of any such verification.m. and time of any such verification.gov. 3. Take the actions needed to correct the records. ask the employee to pursue and resolve the matter personally with the SSA within 90 days of receipt of the no-match letter. identity. take the following steps within 30 days of receipt of the no-match letter: 1. If these three steps are completed within 90 days of receipt of the no-match letter.) The employee may pursue the matter by visiting a local SSA office and bringing original documents or certified copies required by SSA. Make a record of the manner. In the safe harbor. to 7 p. as SSA may not provide any documentation. N The employer should then take the following steps to verify the employee’s information with the SSA: 1. date. ©Business & Legal Reports. N If the employee confirms that the records are correct. or mailing these documents or certified copies to the SSA office. computer-generated printouts. Note: Employers may verify an SSN with SSA by telephoning toll-free 800-772-6270 weekdays from 7 a. e-mails. 4. Inc. correspondence. correspondence. the employer qualifies for the safe harbor.Step 2—SSA No-Match Letter N If the discrepancy is not resolved by following the procedures in Step 1. such as documents that prove age. and Social Security Number Verification System screen shots). citizenship or alien status. For information on SSA’s online verification procedure. date. Make a record of the manner. and time of the verification (this includes documentation of telephone conversations. Employers should make a record of the manner. date. as the SSA may not provide any documentation. (Be sure to give the employee the date by which this must be completed. and 3. EST. N If the employee confirms that the records are not correct. if permitted by the SSA. Store the record with the employee’s Form I-9. Store the record with the employee’s Form I-9. (This includes documentation of telephone conversations. 2.ssa. go to www. and other relevant documents. notify the employee promptly (ordinarily within 5 business days after completing the internal records review) of the no-match problem and request that the employee confirm that the employer’s records are correct. and 5. and Social Security Number Verification System screen shots). such as proof of a name change. 2. Inform the SSA. e-mails. 30610800 29 . If these five steps are completed within 30 days of receipt of the no-match letter.
and no document without a photograph may be used to establish identity or both identity and employment authorization. In the safe harbor. assigned to the employee. or identity.If the discrepancy is not resolved within 90 days of receipt of the no-match letter either by the employer correcting the mistaken records or the employee pursuing and resolving the matter with SSA. date. N Make a record of the manner. move on to Step 2. Step 2—DHS No-Match Letter If the discrepancy is not resolved within 90 days of receipt of the no-match letter.). and no receipt for an application for a replacement of these numbers may be used to establish employment authorization. the employer should complete a new Form I-9 for the employee as if the employee were newly hired except that the alien number that is the subject of the no-match letter and no receipt for an application for a replacement of these numbers may 30 Top 10 Best Practices in HR Management for 2009 . and time of the verification (this includes documentation of telephone conversations. employers should do the following: Step 1—DHS No-Match Letter After receiving a no-match letter from DHS. Step 3—SSA No-Match Letter If the discrepancy is not resolved within 90 days of receipt of the no-match letter. or verify the authorization with the DHS that DHS records indicate that the immigration status document or employment authorization document was. If the discrepancy is not resolved within 90 days of receipt of the no-match letter. employers should do the following: N Contact the DHS and attempt to resolve the discrepancy within 30 days. N Verify with the DHS that the employee’s name matches the number assigned to that name in the DHS records. the employer should complete a new Form I-9 for the employee as if the employee were newly hired. computergenerated printouts. correspondence. If the new I-9 is completed or the employee is terminated within 93 days of receipt of the no-match letter. DHS No-Match Letter After receiving a no-match letter from DHS. and N Store the record with the employee’s Form I-9. except that no document containing the SSN that is the subject of the no-match letter may be used. the employer qualifies for the safe harbor. the employer should move on to Step 3. the employer should terminate the employee. indeed. You have now completed the process. etc. e-mails. In the safe harbor. N Verify with the DHS that the discrepancy has been resolved. If these steps are completed within 90 days of receipt of the no-match letter. If a new I-9 is not completed within 93 days of receipt of the no-match letter. or both. the employer qualifies for the safe harbor.
however. OSC will not find reasonable cause to believe that the employer has violated the INA’s antidiscrimination provision. and no document without a photograph may be used to establish identity or both identity and employment authorization. OSC may. If the new I-9 is completed or the employee is terminated within 93 days of receipt of the no-match letter. On the other hand. therefore. Department of Justice (DOJ) Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) has issued guidance for employers explaining how to avoid being charged with discrimination while following the safe-harbor procedure. Employers that can show that they followed the safe-harbor procedure uniformly and without intending to discriminate won’t be subject to discrimination charges by OSC. 2008. many federal contractors and subcontractors are required to use the E-Verify system to verify their employees’ eligibility to legally work in the United States. Federal Contractors Must Now Use E-Verify Effective January 15. an employer that receives an SSA no-match letter and terminates employees without attempting to resolve the mismatches.be used to establish employment authorization. through language inserted into their federal contracts. Antidiscrimination Guidance for Employers Following the No-Match Letter Safe Harbor Procedure The U. or identity. may be found by OSC to have engaged in unlawful discrimination. The Federal Acquisition Regulation (FAR) has been amended to implement Executive Order 12989 as amended on June 6. The guidance document notes. to use E-Verify to confirm the employment ©Business & Legal Reports. Inc. The amended regulations require federal contractors to agree. the employer qualifies for the safe harbor. and. and if that employer applied the same procedures to all employees referenced in the no-match letter(s) uniformly and without the purpose or intent to discriminate on the basis of actual or perceived citizenship status or national origin. OSC is required to investigate charges of discrimination and determine whether there is reasonable cause to believe that the charge is true. 30610800 31 . also conduct investigations of unfair immigration-related employment practices. directing federal agencies to require that federal contractors agree to electronically verify the employment eligibility of their employees (48 CFR Subpart 22). terminates that employee. on its own initiative. If an employer follows all of the safeharbor procedures outlined in DHS’s no-match rule but cannot determine that an employee is authorized to work in the United States.S. 2009. If a new I-9 is not completed within 93 days of receipt of the no-match letter. or treats employees differently or otherwise acts with the purpose or intent to discriminate based on national origin or other prohibited characteristics. that it is OSC’s long-standing practice to examine the totality of relevant circumstances in determining whether there is reasonable cause to believe that an employer has engaged in unlawful discrimination. or both. the employer should terminate the employee. OSC will not act on an allegation of discrimination by an employer in applying the safe-harbor procedures until it determines that the alleged victim is an authorized worker who is protected from discrimination. In the safe harbor.
Enrollment and verification requirements. N Use E-Verify to verify employment eligibility of all employees assigned to the contract. If the contractor is not enrolled as a federal contractor in E-Verify at the time of contract award. 2009. or N Initiate verification of each employee assigned to the contract within 90 calendar days after the date of contract award or within 30 days after assignment to the contract. the contractor must: N Either initiate verification of all new hires who are working in the United States. except for commercial services that are part of the purchase of a commercially available off-the-shelf (COTS) item (or an item that would be a COTS item.eligibility of all persons hired during a contract term. whether or not assigned to the contract. The federal contractor E-Verify requirement applies to prime contracts that exceed $100. performed by the COTS provider.000.000 for services or construction. within 3 business days after the date of hire. N Verify all new employees within 90 calendar days of enrollment and begin to use E-Verify to initiate verification of employment eligibility of all new hires who are working in the United States. If the contractor is enrolled as a federal contractor in E-Verify at the time of contract award. The same clause is also required in subcontracts over $3. and to confirm the employment eligibility of federal contractors’ current employees who perform contract services for the federal government within the United States. must include a clause committing government contractors to use E-Verify. whichever is later. Coverage. the contractor must: N Enroll within 30 calendar days of the contract award. Contract requirements. within 3 business days after the date of hire if the contractor has been enrolled for 90 days or more or within 90 calendar days after enrollment as a federal contractor in E-Verify. whichever is later. Covered contracts must include a clause that requires federal contractors to: N Enroll as federal contractors in E-Verify. and N Include these requirements in subcontracts for commercial or noncommercial services. The final regulation is designed to lighten the burden on small businesses that decide to accept federal contracts and provide contractors with flexible means of complying with the basic requirement that all persons working on federal contracts be electronically verified. whether or not assigned to the contract. but for minor modifications). and N Initiate verification of each employee assigned to the contract within 90 calendar days after the date of enrollment or within 30 calendar days of the employee’s assignment to the contract. and are normally provided for that COTS item. N Use E-Verify to verify employment eligibility of all new hires working in the United States. Federal contracts awarded and solicitations issued after January 15. and construction. but does not cover those that: 32 Top 10 Best Practices in HR Management for 2009 .
or top secret. In such as case. a contractor is excused from the enrollment and verification requirements. A contractor must comply with the requirements of the E-Verify program MOU for the period of performance of this contract. 1986. Individuals previously verified. the contractor will be referred to a suspension or debarment official. or N Employees for whom background investigations have been completed and credentials issued pursuant to Homeland Security Presidential Directive (HSPD) 12. N Are only for items that would be COTS items. within 180 calendar days of enrollment in the E-Verify program. or N Are only for commercial services that are part of the purchase of a COTS item (or an item that would be a COTS item. 1986. 30610800 33 . or notification to E-Verify Operations of the contractor’s decision to exercise this option. but for minor modifications). but for minor modifications. Option to E-Verify all employees. Contractors may elect to verify employment eligibility of all existing employees working in the United States who were hired after November 6. Enforcement. A contractor may choose to verify only new hires assigned to the contract if the contractor is: N An institution of higher education. Exception from requirement to verify all new hires. and are normally provided for that COTS item. or N A surety performing under a takeover agreement entered into with a federal agency pursuant to a performance bond. Inc. N Are only for items that would be COTS items if they were not bulk cargo. In such case. the contractor is not required to verify employment eligibility of: N Employees who hold an active security clearance of confidential. N A state or local government or the government of a federally recognized Indian tribe. DHS or the SSA may terminate a contractor’s MOU and deny access to the E-Verify system if the MOU is violated. secret. If the official decides not to suspend or debar the contractor. During the period between termination of the MOU and a decision by the suspension or debarment official. instead of just those employees assigned to the contract. performed by the COTS provider. N Are only for COTS items. The contractor must initiate verification for each existing employee working in the United States who was hired after November 6. N Have a period of performance of fewer than 120 days. the contractor must reenroll in E-Verify.N Are only for work that will be performed outside the United States. A contractor is not required to perform additional employment verification using E-Verify for any employee: N Whose employment eligibility was previously verified by the contractor through the E-Verify program. using the contact information provided in the E-Verify program memorandum of understanding (MOU). ©Business & Legal Reports.
g. the employer’s intrusion into the employee’s private affairs must involve a genuinely private matter and must also be of such a nature that a reasonable person would deem the intrusion to be“offensive. sexual habits or orientation) may also give rise to this type of claim.” 2.. if an employer attributes a false or offensive conduct or characteristic to an employee that is not true (e.. or attributes specific statements to an employee without his or her permission. Under this theory. government security clearance for access to confidential.g. however. private employees enjoy relatively little freedom from workplace intrusion. or N Who has undergone a completed background investigation and been issued credentials pursuant to HSPD 12. the employee may claim invasion of privacy. a locker or desk drawer) or conducts surveillance (e.g.. an employee must be able to show that the information was genuinely private. Use of an individual’s name or likeness. An employee may claim this form of privacy invasion when an employer publicly discloses private and arguably embarrassing facts about an employee to a wide audience without his or her permission. however. An employee may allege this form of privacy invasion when an employer unreasonably searches (e. Therefore. private employees must look to common or judge-made law to find privacy protections. An employer’s improper questioning of an employee (e. Privacy Several states have enacted statutory or constitutional provisions guaranteeing their citizens the right to privacy from certain intrusions. Intrusion into an individual’s private solitude or seclusion. 3. the employer’s publication of the information was offensive by reasonable standards. These are: 1. criminal activity). When an employer uses an employee’s photograph. Public disclosure of private facts.. 4.N Who has been granted and holds an active U.g. Under this claim. the employer publishes an employee’s 34 Top 10 Best Practices in HR Management for 2009 .. Policy for a Common Identification Standard for Federal Employees and Contractors. There are essentially four common-law privacy claims available to private employees. an individual may have a valid misappropriation claim (e. and the employee suffered a resulting injury. likeness. or top secret information in accordance with the National Industrial Security Program Operating Manual. identity theft.g. #7 Privacy and Identity Theft The increased role and use of computers in the workplace has presented employers with an entire set of new problems to worry about in the form of privacy issues. In order to sustain such a claim. In the absence of a state constitutional provision or existing law. secret. and security breaches. Portraying an individual in a false light. dressing rooms) in areas in which an employee has a legitimate expectation of privacy.S.
photograph or likeness on company brochures without first obtaining the employee’s consent). Therefore. New Federal Privacy Law Barring Genetic Bias The new Genetic Information Nondiscrimination Act (GINA) protects the confidentiality of individual genetic information. The law’s provisions for insurers take effect in June 2009 and for employers. two rules dictate how employers must handle address discrepancies on consumer reports. genetic tests of family members. 30610800 35 . GINA prohibits employers from discriminating against employees or applicants based on genetic information. employment agencies. requests for information from healthcare providers should be reviewed to avoid obtaining genetic information from care providers. if employers comply with the ADA’s confidentiality requirements and keep medical information on separate forms and in separate medical files. Employer Procedures for Handling Address Discrepancies on Consumer Reports Under the federal Fair and Accurate Credit Transactions Act of 2003 (FACTA) (15 USC 1681c). Group and individual health insurers are prohibited from using genetic information to determine insurance eligibility. Inc. (4) the monitoring is in compliance with federal or state regulations. an employer can collect information to monitor the biological effects of toxic substances in the workplace if: (1) written notice is given to the employee. There are other exceptions. and labor organizations. GINA’s requirements for confidentiality are the same as the requirements under the Americans with Disabilities Act (ADA). in November 2009. “genetic information”is defined to include information about an individual’s genetic tests. a nationwide consumer reporting agency (CRA) must provide a notice of discrepancy to the employer if the address ©Business & Legal Reports. and (5) the employer receives only aggregated monitoring results without information about specific individuals. including one for bona fide wellness programs that protect individually identifiable information. (3) the individual receives the results. they’ll be in compliance with GINA. depending on the type of request. When providing a consumer report to an employer (or any consumer report user). However. Any genetic information that an employer lawfully possesses must be treated as a confidential medical record. Both insurers and employers are prohibited from requesting or requiring individuals to undergo genetic testing. Under the law. (2) the individual gives written informed consent in advance or the monitoring is required by law. Increasing an insurance premium based on genetic information is also prohibited. Covered employers should update their nondiscrimination policies to reflect GINA’s provisions. GINA also has confidentiality requirements. Specific language that reminds the provider not to send genetic information can be added. Section 113 applies to all employers. The law applies to all public employers. private employers with 15 or more employees. In addition. and a disease or disorder in the family. GINA applies to both insurers and employers.
or retained CIP documentation) to verify the address of the consumer N Verifying the address through third-party sources N Using other reasonable means After reconciling the address. Therefore. Identity theft has been the fastest growing crime in the United States for the past 3 years. Identity Theft The Federal Trade Commission (FTC) estimates that as many as 9 million Americans have their identities stolen each year. which predicts that in 5 years. change of address notifications. The employer regularly and in the ordinary course of business provides information to CRA. 36 Top 10 Best Practices in HR Management for 2009 . FACTA Section 114 contains additional requirements for financial institutions and creditors. according to the FTC. employers need to carefully control access to employee and customer financial information (via password protection). and employee recruiting and retention.provided by the employer in its request for the report“substantially differs”from the address CRA has on file. customers. and carefully control the destruction and/or recycling of company documents. customer account records. Large scale or frequent identity thefts also result in significant negative publicity. an employer must send a confirmed address back to CRA if the following three conditions are met: 1. enabling corporate espionage and fraud. and 3. All employers must develop and implement policies and procedures for verifying the identity of the consumer when there is an address discrepancy. and theft of hard assets and intellectual property. impacting sales. Identity theft also threatens enterprise security. partnerships. or clients via their employer’s computer system. carefully control the transfer of such information. Much of the identity theft that occurs in the workplace happens when employees steal personal information of the company’s co-workers. The employer has a continuing relationship with the consumer. 2. the majority of Americans will have been victimized by identity theft. The employer has formed a reasonable belief that the consumer is in fact the same person as the person identified in the consumer report. Financial institutions and creditors must also develop and implement a written Identity Theft Prevention Program that is designed to prevent and mitigate identity theft by detecting and responding to red flags that indicate there may be identity theft occurring in one or more of a company’s accounts (15 USC 1681m). These policies and procedures could include: N Verifying the address with the consumer about whom it has requested the report N Verifying the consumer’s identity in accordance with the requirements of the Customer Information Program (CIP) rules N Reviewing the employer’s own records (such as applications.
to opting out of marketing databases.000 per year.000 per employee also may be levied. An employer can choose whether to pay for this benefit.Employers also suffer other significant costs when their employees experience identity theft. medical. should expect to incur productivity losses of more than $600. Employers who are concerned about identity theft hire outside consultants to perform a“penetration test”to assess the security of their computer systems. When choosing the best alternative for protecting your employees and your company from identity theft. Antivirus. to tracking data in Social Security. The key is to make the protection available and have a mandatory employee meeting on identity theft and the protection you are making available. who make an average salary of $40. The online survey asked respondents:“How confident are you that your employer adequately protects your vital personal information from data breaches/identity theft?”Nearly 40. Computer protection. Credit monitoring at varying levels of frequency. Protection as an Employee Benefit One solution that provides an affirmative defense against potential fines. wireless security. sometimes with alert services in the event of credit inquiries or changes ©Business & Legal Reports. Most Workers Trust that Employers Protect Personal Info Eighty-eight percent of employees are confident their company protects their personal information from identity theft.500 per employee and state fines of up to $1. and financial databases 3. Such consultants will try to hack into your computer system (and will most likely succeed) and in doing so. Conservative calculations based on current identity theft figures indicate that an employer with 1. 30610800 37 .000. Employees may also bring class action suits against employers for actual and punitive damages. An employee is entitled to recover actual damages sustained if his or her identity is stolen because of the employer’s inaction or statutory damages up to $1. etc. according to a survey by the American Payroll Association. Guidance on protecting against a variety of exposures of personal data from shredding documents. and lawsuits is to offer some sort of identity theft protection as an employee benefit. federal fines of up to $2. consider the four types of protection available: 1.000 of the 45. antispyware. Identity Theft Law Requires Employer Compliance A provision of FACTA states that any employer whose action or inaction results in the loss of employee information can be fined by federal and state government and sued in civil court.180 respondents indicated they were either confident or very confident that their employer adequately protects their personal information. 2. will discover your weak points and help you fix them.000 employees. similar to what most employers do for health insurance. fees. driver’s license. Inc.000 per year. In addition.
The cost of purchasing and installing this type of software may save employers many headaches down the road. Many state security breach laws provide an exception for records that have been encrypted. Disseminate your policies frequently to reduce employees’ expectations of privacy. When formulating policies that balance the employer’s interest with the employee’s interest in privacy. Providing notice under these security breach laws is both time consuming and expensive. home addresses. N Train your supervisors and managers to abide carefully by your privacy policies. N Review not only federal privacy protections but also. say so. N Implement other safeguards. and other data that can be used in identity theft. Tell them to ask Human Resources should questions arise. or collecting medical information. N Adopt a“minimum necessary”standard for monitoring. do. State Data Breach Notification Laws Most states now have laws requiring employers to give notice to affected residents in the event of a security breach. to protect personal information such as Social Security numbers. If you’re concerned only about computer visits to porn sites. consider the following suggestions: N Create appropriate notifications to employees about what you will monitor and when you will have the right to search or conduct surveillance. N Tell employees specifically how you will protect their personal health information. This is important in the context of HR records because these records often contain the personal information these laws aim to protect.4. the laws particular to the states where you do business. For example. Avoid using a baseball bat if a flyswatter would accomplish what you want. and don’t penalize people who shop online unless you note low productivity. California passed a“breach of security”law. One way employers can help prevent identity theft and unauthorized access to confidential records is encryption software. 38 Top 10 Best Practices in HR Management for 2009 . legal and otherwise. beyond those for personal health information. State data breach notification laws started in California. more importantly. sometimes including assistance with identity recovery activities A common theme to all of the“state of the art”issues discussed in this section is the balance between a company’s interest in operating a profitable and safe workplace and the employee’s interest in maintaining his or her privacy in an increasingly public world. Insurance coverage. When most of us were just beginning to worry about identity theft. searching. as so many trends. remind them not to disclose a subordinate’s medical condition to co-workers or other supervisors without the employee’s express permission. or rendered unreadable. It required any business or industry that collects personal information about individuals to notify all affected individuals if it learns that those data have been stolen or accessed by an unauthorized person.
Inc. If that’s possible. president and CEO of TransitCenter.transitcenter. if that’s the way the firm usually communicates with the consumer. and you’re putting some cash back in employees’ wallets. it must determine whether there is a reasonable possibility that the data will be misused. TransitCenter (www. or. notice must be given in writing. In most states. credit or debit card or financial account information. Commuter Benefits Bring Financial and Environmental Relief While the definition of the word“green”has expanded in recent decades. says that you can provide commuter benefits at little cost.” 39 ©Business & Legal Reports. These statutes cover companies that maintain confidential data containing personal information. There was a much-publicized trigger: Early in 2005. if you provide your employees access to commuting benefits. who have been rushing ever since to put their own notification laws in place.com) has been around for about 22 years and was originally intended as a way to reduce congestion in New York City. Georgia-based ChoicePoint confessed that it had inadvertently sold data on approximately 145. Many statutes provide that if the number of individuals involved makes the notification overly burdensome. consumers to Nigerian thieves during the second half of 2004. most other states didn’t begin enacting similar legislation until 2005 or later. Once the firm is aware that such data are no longer secure. Larry Filler. which conducts background checks and drug tests and verifies identity and credentials for thousands of people. “There was a lot of driving coming into the central business district of New York. 30610800 . But the company. including an individual’s name accompanied by. by telephone. Inc. #8 The Green Movement and Corporate Social Responsibility While corporate social responsibility (CSR) plays an increasing role of importance in companies today. incorporating“green”environmental assurance functions into CSR programs will be a focus in 2009. by e-mail. Manhattan really.S. followed the only breach of security law that existed then—California’s. Individuals around that state whose data had been stolen were individually notified. other media can be used—usually e-mail. for instance.Although California’s law was passed in 2002. posting on the company’s website. That got the attention of legislators in other states. which goes a long way toward environmental and employee relations goals. and notice in major statewide media. the company must notify all affected state residents as promptly as possible. We were looking for an incentive to get people to commute. you’ll actually be using two definitions of the word:You’re helping keep the environment cleaner.000 U. or the firm doesn’t have enough consumer contact information to handle the task. driver’s license number. and access code or password.. a Social Security number.
N Seventy-nine percent reported that they would be more likely to accept a job offer at a green company over another company when evaluating two similar job offers. vanpools. metro markets. TransitChek is the name of their nationally available program. green-conscious. Parking is set at $230 a month tax-free. which is a tax-free amount up to $120 a month that employees can use to pay for expenses associated with either transit or vanpooling. though. and the transit benefit was $60 per month. according to a recent study. and from transportation only in and around New York City to cities across the entire United States. or carpools.” says Filler. to cover the cost of commuter parking”[dollar amounts for 2009]. or green-certified. a provider of career services for college students and alumni. as well as global warming and how commuting by car contributes to the problem. 40 Top 10 Best Practices in HR Management for 2009 . the cap on parking was set at $155.” Study on commuter benefits. “It includes not only parking at a facility at or near a location where an employee works. which after all. the parking benefit was unlimited and there was no transit benefit. That is a result of our hope to support transit and ridesharing. By 1993. The 2007 Commuter Impact Survey results state that the percentage of employers planning to add the benefit grew from 5 percent of respondents in 2006 to 17 percent in 2007.S. The other part is commuter parking. “There is the transit/vanpooling benefit.” Other highlights from the survey include: N Eighty-one percent of respondents said it is important to work for a green company—meaning they are green-friendly. but also it includes parking at a facility from which an employee commutes by transit. Many Americans are concerned about the high cost of gas continually inching upward. is set at a higher limit than is the transit/vanpooling benefit. the number of employers offering tax-free commuter benefits has grown from 28 percent in 2006 to 44 percent in 2007. Perhaps that’s why tax-free commuter benefits have risen to the number one new benefit that employers are planning to add to their employee benefits program. Inc. “There are two basic parts of the commuter benefit. “We’ve been working the last 2 or 3 years with various members of Congress to equalize the benefits to promote transit over driving. even as the figures are adjusted for the cost of living. Want to Attract More Generation Y Job Candidates? Go Green! According to an April survey conducted by Experience.. TransitCenter is also a provider. the allowable uses of the parking benefit are broader than you might expect. Filler explains the history. Originally. If you’re wondering why the parking benefit. “We’ve tried to narrow the gap.” says Filler.” In the meantime. The disparity continues. Along with its role as an advocacy group for commuter benefits. encourages people to drive.The program evolved from transit vouchers of $15 per month to include other forms of commuting benefits. “84 percent of Generation Y individuals are actively concerned about the climate crisis—and many say the green movement relates to their career choices. This survey of HR professionals throughout the United States at the 2007 Society for Human Resource Management’s annual conference also reported that in major U.
and mortgage corporations. 30610800 41 . A way for employees to report ethical misconduct anonymously 3.” The ERC conducts a survey every 2 years of U. Written standards of ethical workplace conduct 2. and a misconception that certain decisions are solely business issues are among the common problems that derail workplace ethics programs.Generation Y respondents also noted that they wanted more green product options (20 percent) and wanted more education about actions they could take to help the green movement (19 percent). “The Ethics Landscape in American Business. used by federal judges to evaluate whether a company has an effective program in place: 1. Ethics training for all employees and board members 4. companies. “Six years after high-profile corporate scandals rocked American business. Many saw multiple violations. there has been little if any meaningful reduction in the enterprisewide risk of unethical behavior at U. and 7 percent said their organization did not have such a program.” only 23 percent of HR professionals indicated that their companies have implemented a comprehensive ethics and compliance program.S.S. policy. According to the survey report. ERC president. telephone line. Discipline for those who commit ethics violations In a recent study by ERC and the Society for Human Resource Management. Harned offers a few tips to help HR and ethics professionals work together to promote an effective program: ©Business & Legal Reports. limited resources. A specific office. says Dr. “More than half (56 percent) of employees surveyed had personally observed violations of company ethics standards. public and private company employees. Corporate Social Responsibility and Ethics After the recent publicity about the ethics and social responsibility of banks. Also. 16 percent said they need to be better educated about the issues. brokerage houses. Evaluation of ethical conduct as part of employees’ regular performance appraisals 6. Harned says the generally accepted definition of an effective ethics and compliance program encompasses six key components outlined in the Federal Sentencing Guidelines.000 for the last survey. companies will find these topics of increasing importance. Patricia Harned. there were almost 2. or the law. Employees Continue to Criticize Leaders’ and Staff’s Ethical Behavior According to the Ethics Resource Center’s (ERC) 2007 National Business Ethics Survey® (NBES) released at the end of November 2007. or website where employees can ask ethics-related questions 5. e-mail address. Inc. More than two of five employees (42 percent) who witnessed misconduct did not report it through any company channels.” Why Ethics Programs Fail and How to Help Yours Succeed Lack of leadership buy-in.
” In addition. However. it may seem a formidable task to undertake the development of a code of ethics. positive effects on the business culture in your organization. she says managers and supervisors can reinforce ethical conduct daily. For example: We will respect every customer and every employee as a valued and equal individual with whom we interact every day. Establish a Code of Ethics For senior management and HR executives of many small companies. For example. The code of ethics becomes the game plan from which employees can develop appropriate business strategies. constructing one may have long-lasting. but Harned says such accountability drives compliance. and nonmanagement employees should understand the company’s standards and the resources available to them. employees. senior managers need to understand that they set the tone for the entire organization. Department of Commerce nearly a decade ago. Or. she recommends making sure others understand that such behavior is not acceptable. and the community your organization’s expectations for corporate conduct. Provide training and tailor the ethics message to different segments of the workforce. supervisors need to reinforce management’s ethics message.” The basic principles suggested by the Department were the following: N Provision of a safe and healthy workplace N Fair employment practices. “What gets rewarded. A code of ethics can be specific—denoting purposeful. detailed statements requiring adherence on the part of management and employees.N Make sure the program is well implemented. It may also enhance your employees’ dedication and commitment to their work and positively influence their behavior in the workplace.S. and managers can implement work policies and procedures. This document encourages businesses to“adopt a code of conduct for doing business around the world. Only 43 percent of HR professionals in the survey report that their organizations include ethical conduct in employees’ performance appraisals. it can be more general. The basis for the code of ethics should be the standard to which the organization aspires to reach and wishes to be measured against. For example. One helpful resource that can be used by employers in developing their own code of ethics was developed by the U. including avoidance of any type of discrimination 42 Top 10 Best Practices in HR Management for 2009 . We will stand behind the quality and value of the products that we produce and will be honest and forthright in our communication with customers. regardless of the rank of the employee or the amount of the customer’s business that we can expect to fulfill. employees. In cases where employees cut corners. For example: Our organization will put its customers first in respect to both service and the quality of the products that we sell. managers can thank them for their courage. A code of ethics illustrates for customers. N Focus on the culture. if employees ask hard questions during a staff meeting. and the community. gets done.
Adjustments and changes to the code may be implemented as necessary to reflect any changes in the firm’s structure. stockholders. N Good manners and respect for all other employees and customers are expected at all times. 30610800 43 . etc. and HR may post it in prominent areas throughout the firm’s location(s). and consistently.N A maintained responsibility for environmental protection and practices N Compliance with laws promoting good business practices and ensuring fair competition N Maintenance of a corporate culture that respects free expression consistent with legitimate business concerns and does not condone political coercion in the workplace. clearly. In addition to an ethical code.) share the common goal of delivering the highest quality product or service on time and on budget. N Illegal. employers may wish to integrate ethics standards into other company messages and policies. The CEO may introduce the new company code of ethics with great fanfare to all staff at an employee meeting. and exemplified by all employees Promoting the code. management. business strategies. After the initial introduction of the code. ©Business & Legal Reports. and training and orientation sessions: N All company stakeholders (employees. immoral. Reviewing the code. valued. and where ethical conduct is recognized. A code of ethics should not be a statement that is developed and put on the shelf. The following are some other ethical messages your company might want to communicate in company publications. and questionable behavior in the workplace will not be tolerated. the standards must be communicated frequently. It is important to note that just saying that the company is committed to high ethical standards isn’t enough. Senior management should require that each employee review the code of ethics and sign a statement that requires him or her to agree to follow the code. Once a code of ethics has been put into place. Such practices allow employees to share their experiences with adhering to the code of ethics and their observation of other employees and managers regarding their ethical behavior. HR executives and senior leadership should review the code on an annual basis and solicit employee feedback with a mechanism such as an anonymous employee survey or discussion facilitated by an outside objective resource. Inc. it should be presented to all new employees during employee orientation. In addition. Other statements on ethics. or in response to changes in the business environment. It should become a living document that is followed every day. regular conversation about the code should be commonplace in department meetings and ongoing employee training. vendors. N Fairness is a company focus requiring commitment and cooperation among all interest groups. or even to employment candidates during the recruitment and interviewing process. N Individuals are responsible and accountable for their actions and behavior as they relate to colleagues and the organization as a whole. that encourages good corporate citizenship and makes a positive contribution to the communities in which the company operates. handbooks.
formulas. metrics are used to measure and track the performance of a company’s largest investment. improve customer satisfaction. training. ratios. It is helpful to know what percent of the total number of employees left the company during the year. They are used in almost every area of business. What to Measure Deciding what to measure is very important. One example of a metric is measuring turnover in an organization. which is then used to drive educational priorities to improve performance on the next round of tests. When choosing what to measure in your organization. the HR professional should try to use formulas. To be effective. and in education. the metric should not just report results. 44 Top 10 Best Practices in HR Management for 2009 . In Human Resources. N Tie metrics directly to the key challenges facing the business and the results that must be achieved. and language used by business leaders. the key metric is often student performance on standardized tests. These might include a need to cut costs because of price competition. key performance measures. Metrics should be tied directly to the business issues facing the company. consider the following: N Use data that are readily available and can be gathered at regular intervals. N Use the ratios. Metrics don’t have to be complicated. its investment in human capital. and retaining employees. HR metrics measure the performance of a company’s investment in hiring. ROI. A good metric is one that provides decision makers with the data needed to make fact-based decisions. A company’s investment in human capital (its employees) is usually its largest investment. N Keep it simple. A metric is simply a way to measure and track key performance indicators. N Identify and compare results to key competitors whenever possible. but should show a cause and effect relationship. and language commonly used by the organization’s other business leaders. N Use only metrics that add value in making decisions. In education. However. And the HR professional needs to take the lead in identifying where these resources can best be allocated to meet the company’s goals and how to hire. More to the point. N Include measures of results and don’t limit the focus to costs. to the extent possible. it is probably more useful to know how many of those people left voluntarily as opposed to those who left involuntarily. develop.#9 HR Metrics Metrics are not unique to the HR profession. or develop new technology to keep pace with competitors. is universally understood in the business world. and retain the human capital the company needs to stay competitive now and in the future. In addition. or return on investment. in government. For instance.
Inc. The key is to pick metrics that focus on key issues and tell the story. and impact on problems identified by business leaders. new commission plan resulted in $100 of increased sales for each additional commission dollar paid) N Impact of a program on revenue N Decreased costs A potentially endless number of metrics are available to the HR professional.N Measure ROI. The use of several individual metrics to ©Business & Legal Reports.. It may be that a series of single metrics when viewed together tell the story better than a single metric examined in isolation. some combination of the metrics listed above along with others created by the organization will provide the information necessary to measure performance and effectiveness. no single metric will adequately gauge the performance of the recruiting function. cost/benefit ratios. 30610800 45 . Rather.. new recruiting program resulted in new employees with first year job performance ratings that are 30 percent higher than under the old program) N Return on investment (e.g. Measurements include: N Time to fill a vacancy N Quantity and quality of applications based on recruiting source N HR cost per hire N Voluntary turnover rate of new hires during first year of employment N Percent of new hires performing above average by the end of the first year N Percent of new hires performing below expectations by the end of the first year N Involuntary turnover rate during the first year of employment N Satisfaction of managers with the hiring process based on survey of hiring managers N Quality and retention rates of new hires by recruiting source N Diversity ratios of new hires In most cases. Following are some of the metrics the HR professional may want to consider for each functional area of human resources: Metrics for the Recruiting Function The recruiting or employment area is focused on hiring the employees the organization needs to meet its goals.g. and use hard metrics or data to drive fact-based decision making. Types of Metrics Available to HR Metrics generally measure one of the following: N Increased job performance (e. N Avoid soft metrics based on feelings or intuition about a program.
as a result. Measurements may include: N Compensation costs per dollar of profit N Compensation costs per dollar of revenue N Analysis of performance and production levels of employees paid in the top 30 percent of their salary range N Total compensation costs as a percent of total company operating costs 46 Top 10 Best Practices in HR Management for 2009 . or other external dispute resolution N Amount of time taken to resolve an internal complaint N Percent of cases resolved with no money paid out by the company N Percent of cases where large financial settlements or awards were made N Breakdown of the types of complaints made by employees by department (e. Some of the metrics that can be used to measure employee relations include: N Number of complaints filed by employees N Percent of complaints that proceed to a state agency.. Comparisons from year to year will help evaluate the effectiveness of the employee relations function. if the employee relations professionals are doing the job right. lower settlements when complaints are filed. the company should see fewer lawsuits and complaints filed with state agencies. race) N Costs associated with employee relations as percent of total operating costs N Percent of cases where documentation was inadequate N Number of sexual harassment complaints N Number of complaints of unfair treatment N Number of hours spent on training managers on employee relations issues N Data from employee surveys on various employee relations issues such as understanding of policies N Dollars spent on attorney’s fees N Dollars spent on attorney’s fees as a percent of total employee-relations costs As with recruiting. metrics are relatively easy to apply. Metrics for Compensation Programs Compensation programs are all about the numbers and. and better outcomes when there are performance issues and/or conflicts in the workplace. sexual harassment. Metrics for the Employee Relations Function The employee relations function is different from the other HR functions in that it is a little harder to quantify. court.g.measure a function is often referred to as an HR scorecard and will provide a more complete story of how the recruiting function is meeting goals. companies will probably want to use some combination of these metrics as their employee relations dashboard. However.
market share. business leaders make data-driven decisions.N Analysis of compensation levels to the marketplace and key competitors N Forecast compensation needs based on future plans N Compensation mix. succession planning. In order to be a business leader. one based on data and facts. For instance. compare current numbers with previous years’ or with a competitor’s position. employee performance. Business leaders focus on revenue. These functions were viewed as administrative necessities but not as integral parts of the core business. Historically. kept personnel files and other records. metrics for training programs can include: N Cost of sales training as a percent of total sales N Increase in hours of sales training compared to increases in sales N Changes in performance levels of employees who received training N Percentage of employees that cite lack of training or advancement as a reason for leaving N Identification of key employees and percent that have received training N Percent of performance appraisals that include training goals for employees Strategic Alignment The role of HR is changing as fast as technology and the global marketplace. By measuring the current situation compared with quantifiable goals. the HR department was viewed as administrative overhead. Today. HR processed payroll. handled benefits administration. profit growth. many of these old administrative functions have been automated and/or outsourced. managed the hiring process. These can all be measured using metrics that describe the current situation. training. and quantify goals and measure progress. technology purchases. Inc. the HR professional must utilize a similar approach to decision making. it may be helpful to look at metrics that target the type of training and what it was intended to accomplish. hiring and retention. meaning fixed salaries versus performance-driven compensation Metrics for Training Programs Training is another area that can be difficult to quantify. 30610800 47 . and provided other administrative support to the business. The positive result of these changes is that HR professionals have the opportunity to play a more strategic role in the business. Calculate ROI whenever possible to make the business case for HR. and increasing capacity. and outsourcing HR functions can all be based on data compiled through the use of appropriate metrics. compensation programs. Decisions related to the allocation of resources. Use metrics to identify ©Business & Legal Reports. new products. However. Measuring Your Results Don’t forget that the quality of results is as important as quantity or cost.
while at the same time. It is important to understand what types of information employees feel they aren’t getting. it might be that management does not provide employees with information about how the organization is doing or the direction in which it is heading. they will cite a problem with communication. Do all of your employees have access to e-mail? Are all of your employees on-site? Do some of your employees work only on specific days? Do some of your employees have jobs on the 48 Top 10 Best Practices in HR Management for 2009 . Because communication is a very important factor in employee satisfaction and engagement.trends and head off problems on the horizon. in BLR’s 2007 National Employee Attitudes Survey (NEAS). when employees are asked what they like least about their jobs. making sure the right information is communicated effectively is very important to human resources professionals and managers. including: N Improving the flow of vital information N Improving employee morale by making sure employees know what is expected and what the rewards are for a job well done N Serving as the basis of effective teamwork N Ensuring accountability in a department because all employees know who’s responsible for what N Providing greater consistency. In fact. They might feel they are not being acknowledged for their hard work. Don’t be afraid of data or of measuring results. Effective communication is the foundation of positive and cooperative working relationships. #10 Communications In most instances. employees who took the survey said communication was very important to them. In other cases. Metrics can add to the HR professional’s credibility and garner support for HR programs. because all employees have gotten the same messages about procedures and work rules N Leading to better quality because mistakes are avoided N Improving productivity Tools for Better Communicating It is important to consider your audience when you determine what communication tools you will use to communicate a certain piece of information. Good communication benefits the workplace in many ways. Another problem area related to communication is how conflict is handled in the workplace. It might be that employees don’t have a good understanding of what is expected of them or how they fit in the organization. which requires a unique set of communication skills. Employees might feel they aren’t well compensated because they don’t have any information on the value of benefits and their total compensation package. participating organizations across the board were rated lowest on questions related to communication.
there are a variety of methods for enhancing communication in the workplace. or held at the department. arrangements will have to be made to ensure access to the material for those participating by phone. A company intranet is a great place for posting information on a variety of topics for employees. E-Mail. Web conferencing and webinars allow employees to hold live meetings or presentations over the Internet. or individual level. Intranet. there are no cues that would help them interpret the message. Meetings can be companywide. succinct e-mail is interpreted by the reader as a sign that the sender is unhappy. weekly. Meetings are also a good forum for allowing employee questions or discussion on a topic and for obtaining employee thoughts. particularly if most employees have a computer. Traditionally print newsletters are still used. consider having one or a few computers. a short. 30610800 49 . lacking face-to-face contact. monthly. In addition. If materials or printed information will be distributed at a meeting. and inexpensive way to communicate with employees. centrally located and available for employees to check the intranet. successes. Electronic newsletters are less expensive and information can be dispensed in almost real time if needed. concerns. This type of conference can be very effective when members of a team are working at different locations. the overuse of e-mail can make employees feel isolated. For those employees without a computer. convenient. and ideas. and important information to your employees. employees working on an assembly line or on a customer service hotline. Company newsletters are a great way to communicate changes. Once again. depending on the number of employees without computers. etc. Often. Because neither the sender nor the recipient of the e-mail can see or hear the other. Company newsletter. or for those employees who telecommute. Whether or ©Business & Legal Reports. Inc. team. Well-organized and up-to-date bulletin boards are an effective. but more and more companies are leaning toward electronic newsletters to either replace or supplement their print newsletters. Web conferencing and webinars. the sender of an e-mail must take care to consider how the message might be received and whether it is better delivered in person or by telephone. it is important to make sure all employees have access to newsletters distributed electronically. Unfortunately. Telephone and conference calls. Meetings are an effective way to bring employees face-to-face. Newsletters can be published daily. Employees can sit at their computers at different office locations and attend a Web conference. many people consider e-mail to be a casual form of communication and don’t take the time to make sure the information they intend to convey is actually conveyed. For this reason.line that prevent them from attending meetings? Keeping these things in mind. Bulletin boards. Telephones and conference calls are effective tools for communicating with individuals or groups of employees who are not present at the worksite. depending on the nature of the information to be communicated. Meetings can be a difficult method of communication when certain employees are unable to leave their post—for example. E-mail is an easy way to disperse information to a large group of people at once. Meetings. especially workers who do not have access to a computer at their workstations. which is particularly appreciated when the news is good and the purpose of the meeting is to show employees they are valued.
open one where adult-to-adult relationships reign. conducting the survey year after year provides information on how management is doing in areas in which the survey results showed improvement was needed. Employees can listen to the podcasts from their computers. it shouldn’t be a complete substitute for face-to-face communication. their compensation and benefits. replaces the traditional parent-to-child (or manager-to-employee) type of communication generally found in organizations. “The more people learn about each other and the organization’s place in the marketplace. and that HR can be instrumental in moving the organization in the direction to achieve adult-toadult relationships and communication. A well-written survey provides feedback on how employees feel about the organization. it may be possible to look at and compare results for different parts of the organization. the better. framed as adult-to-adult communication and described by Jamie Showkeir and Maren Showkeir in their book. Maren suggests that the more transparent an organization. Organizational Success Through Honest. Letters or memos to staff. ethical communication between leaders and employees and among peers is the basis for a more successful organization. making a fundamental shift in bringing people together by moving to adult-to-adult relationships within its own workforce. They may be inclined to pass every issue and customer concern up the ladder to someone else in a higher-level job. In many organizations. Internal podcasts. there are so many rules that workers may feel that they are not empowered to make any decisions at all. Employee surveys. While this is a great way to communicate with all employees at once. which does not bode well for organizational success. Daily. An unclear message provided in a letter or memo might leave employees feeling they have no way to ask questions or clear up any concerns. Your organization or department can start changing its environment to become a more truthful. In addition. weekly. An important beginning is probably to create a more transparent environment. there should be a written policy on the type of information that may be posted and who must approve any information before it is posted. and communication at each level of the organization. Employee surveys can be an effective and efficient way to obtain information from a large group of employees. It is important that the communication be very clear. instead of every individual being out for him or herself? Honest. This communication.not an organization provides separate bulletin boards for employees’ use. the more powerful the organization 50 Top 10 Best Practices in HR Management for 2009 . Letters and memos to staff are a good way to document that a communication has been made. notes Jamie. ethical. providing a role model for the rest of the organization. or as-needed podcasts can provide a venue for managers and executives to talk to their employees via the intranet. For larger organizations. Human Resources can lead by example. Ethical Communication How can an organization become a place where everyone is focused on the best successes and outcomes for the entire organization. Authentic Conversations: Moving from Manipulation to Truth and Commitment. They may feel powerless. their role in the organization.
outsourcing. in the United States. The people closest to the front line.” In adult-to-adult communication. and the actual work are often the most knowledgeable and often have the best ideas that will positively impact the bottom line. all opinions and ideas are sought. Manpower was recognized because of its“impressive and meaningful ethical business practices”and because it goes“well beyond legal minimums. 30610800 51 .” Maren added. ©Business & Legal Reports. For example. executive director of the Ethisphere Institute. training. the customers. under the company’s“Right Clients. “It’s easy to be ethical and philanthropic when you’re making tons of money. Tell your employees how the business works. operates an unsafe factory or that sells unsafe products. and consulting. during interviews for most management positions. which was recently named to the second-annual World’s Most Ethical Companies list by the Ethisphere Institute. employee assessment and selection.” says Alexander Brigham. Manpower uses a questionnaire to assess applicants’ honesty and integrity. The company plans to make that standard procedure in interviews for all positions.” In addition. offers permanent. temporary. its place in the marketplace. help to solve business problems. Manpower has not strayed from its commitment to ethics and social responsibility. “We take a pretty visible stance on different issues. asking what choices they would make in certain situations. Message relayed in various ways. and what risks there are.will become. One is human trafficking.” McKisson explains. vice president of Human Resources for Manpower. The second most important element is to try to get a good handle on what other points of view are and understand where other people are coming from so you can keep the [overall] good of the organization in mind. That provides staff with the background to make suggestions to improve business processes and serve customers better. and solidifies their feelings of being part of the organization’s team. opting instead to bring about innovative ideas that contribute to the public well being. outplacement. and move the company to a higher level of success. a fundamental element is to tell the truth. participate in that. Best Practice: Ethical Culture at All Levels of Organization Tough economic times are a true test of a company’s ethics program. Manpower’s commitment to ethics is relayed and reinforced during interviews and throughout employees’ careers. “We are very specific about clients we won’t work with that may. and contract recruitment.. for example. The global company. McKisson says. in fact. no matter what a person’s position is in the company hierarchy or what their functional role. Manpower will not work with a client that. Inc. noting that Manpower has worked with the United Nations to prevent people from being moved from one country to another against their will. he says. according to McKisson. Jamie suggests. says Allan McKisson. “If we want to move toward a more ethical environment in our community [the organization]. Inc.” In spite of the economy. Right Terms”strategy in the United States. empowers them to make important frontline decisions regarding customer or client service.
The Code of Conduct. and penalties. according to McKisson. addresses a variety of issues. Employees who believe that a violation of the Code has occurred are encouraged to talk to their supervisor or HR representative for guidance on how to proceed. it decided to continue training annually. The online training addresses such topics as not compromising decisions based on personal gains. new hires learn about Manpower’s Code of Conduct and hear from senior leadership about the company’s“commitment to being ethical and doing the right thing. ways to report violations. please visit our website at www. McKisson says. including conflicts of interest. Since the ethics message is so strong and so integral to Manpower’s culture. and it’s a good way to reinforce ethics within the culture and demonstrate that Manpower is serious about it. “It doesn’t take that long. treating people fairly. Among other things. and each of Manpower’s approximately 30. managers are trained on decision making and treating people appropriately. are encouraged to call an anonymous hotline. 52 Top 10 Best Practices in HR Management for 2009 . compliance issues. If you would like to see the complete library of publications available through BLR. fair dealing. estimating that the course takes about 20 to 30 minutes to complete.” McKisson says.000 internal employees is required to complete an online ethics training course annually. Those who believe that their supervisor or HR rep is involved in a violation.com or call our Customer Service Department at 800-727-5257. employees at all levels of the organization reinforce it and encourage new employees to make ethical decisions. proper use of company assets. which is posted on the company’s website. too. BLR strives to provide Human Resources professionals with practical and easy-to-use information on a wide variety of topics. avoiding harassment. and that you found the information contained in this report useful. Conclusion We hope that you have enjoyed this special report.During the onboarding process.” McKisson says. or those who are not comfortable talking with either of them first. Although the company had considered offering the online training in alternate years. confidentiality. and complying with the company’s Code of Conduct.blr.
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