An article in the Society for Human Resource Management Legal Issues section gives a bleak picture of UI costs across the country. Speaker Douglas Holmes, President of UWC spoke before a session of the SHRM employment law conference last week.  He provided some interesting facts. 
State unemployment taxes increased as a percent of wages about 34% from 2009 to 2010, and are expected to go up even more in the next year.  Also, thirty-two states have outstanding federal loans (from the FUTA fund) to the tune of $43.6 billion.  Interest on those loans is approximately 4% for 2011. Interest amounts cannot be paid from state UI taxes, according to federal law, so states will have to have special assessments or increase the FUTA rates to meet these costs.  Spending on unemployment is at an all time high, as we have seen in the news.
How can companies affect their UI costs?  Management, both in their policies and in their employee hiring, reviewing and firing, can have a major effect.  The SHRM article had some ideas on what Human Resources can do to help mitigate these costs.  Some are pretty obvious: review and verify tax rate notices, make sure that your employee and contractor classifications are correct, and make sure that you have accurately reported wages.
Also, HR should work to protect the company’s experience rating.  Filing claims accurately and timely is important.  Spending time appealing incorrect determinations will help the company down the line, and make sure a company HR representative attends these hearings. 
Finally, review and improve hiring procedures and performance management appraisals.  Careful and accurate documentation in these processes can reduce UI claims.  Any employment actions or disciplinary procedures should be reviewed for accuracy and thoroughness.
Training for managers and supervisors on a regular basis is important.  Working with state unemployment agencies to help identify training or internships for unemployed workers can help serve some of your needs while reducing unemployment claims.  Most of all, stay on top of this issue!  It is only going to get more costly in the near future.

Tags: employee benefits, For Employers, industry news, performance management

Keeping you informed!  Just in case you were feeling slighted, a recent survey on pay raises found promotions and raises down significantly.  WorldatWork’s Promotional Guidelines Survey, conducted last fall, focused on promotions because that seemed to be the only way employees could earn substantial pay raises in this economy.  What the survey found was that only 7 percent of the employees in large U.S. organizations received promotions last year, down from the average of 8.1 percent.  The survey also noted that the raises themselves were down considerably.  Officers and executives, the hardest hit, saw raises go from an average 11.4 percent in 2005 to 9.5 percent in 2010.  The problem for companies is that they have to show opportunities for career advancement to keep top performers, thus companies budgeted separately for these increases. 
It seems from other economic news that non-executives are taking pay reductions, or their benefits are being cut.  Overall it is now a waiting game as companies try to manage growth without having to add a lot of employees.  Hang in there!

Smart Phones are also coming to the attention of mobile security experts as more and more business is conducted on these devices.  Hackers are developing malware  to exploit security issues that may include a less-than-optimal browser, user authentication, and data encryption technologies.  According to an item in SHRM News, in 2010 more than 1 million smart-phone users in China were infected with a “zombie” virus hidden in bogus anti-virus programs.  Another case involved a worm connecting infected iPhone devices to a server in Lithuania, enabling criminals to control the phones.  Adding to the problem, according to the January 2011 article, is the bring-your-own-computer movement allowing employees to use their own mobile devices in the workplace, which can infect company servers.  It is up to companies to either disallow the use of those devices as is done in the national laboratories, or to restrict important data so it cannot be accessed through these devices.  If a document has to be emailed the sender needs to strip any identifier info such as social security numbers from the mail.  Hopefully soon the security systems will be upgraded to deal with these issues, as the world is certainly addicted to the Smart Phone!

Tags: benefits, employee benefits, employee morale, industry news, performance management

Most U.S. employees currently relying on a 401K plan will not be able to retire by age 65. A study published by Nyhart’s employee benefits consultancy has come up with some interesting information.  The six-month study looked at retirement accounts from employees at 110 U.S. public and private companies, and found that most employees aged 45 to 55 need to contribute 19% of pay to be able to retire at age 65.  Employees aged 60-64 will probably have to work until age 75 to afford to retire.
The study, based on current contribution rates, found that 81% of employees 18 or older won’t be able to afford to retire at 65.  Also 70% of employees 18-24 aren’t expected to retire by age 65, as 30% of them don’t participate in a 401K. 
The leading cause impacting retirement age is the contribution rate of the employee.  Across all age groups, the greater the contribution rate the better the opportunity to afford retirement.  By increasing the percent contribution by 2-4% of total income, employees can shave years off the age of retirement. 
Another factor influencing the ability to retire is the gender of the employee.  Current stats show that women live longer than men, and so definitely need to save more. 
The economic recession of 2008-2010 had a major impact on employees 55 or older who wanted to retire at 65.  The hardest hit were those 60-64, who will need to contribute approximately 45% of income to retire at 65. 
The U.S. has gone from a country where most large organizations had company-funded defined benefit plans to a n era of varying levels of employee contributions in order to have any retirement options. 
The Society for Human Resources website, www.shrm.org, has pointers on managing 401K’s and other retirement issues. 

Tags: benefits, employee benefits, employee morale, industry news

As manager for a busy OB-Gyn office in another lifetime, I was well aware of the impact of an absent employee.  There were patients to see, charts to manage, billing to be done and suddenly you are one or two people short.  Everything slowed down and other employees were working harder to take up the slack.
In the office most people were well aware of how their absence affected their departments and the practice as a whole, and tried to manage their time accordingly.
The employee with vacation benefits should be able to enjoy time off guilt-free.  If they are truly ill, they need to know their co-workers will be supportive while they are off work.  It is also important that they don’t come to work and infect others, but stay home and get well.  So – how can the employer be prepared to support the employee and their position?
For the employer, one interesting fact is a finding from a Kronos/Mercer study that employee absences, planned or unplanned, cost the company approximately 35% of base payroll.  An article in the Society For Human Resource Management (10/12/2010) talked about the need for employers to better manage these costs.
Some suggestions (and employees might want to think about their role in the process) include being aware of problem signs before unplanned absences occur.  Things such as chronic lateness might signal a health problem.  Complaints of work-related pain or discomfort, such as wrist pain in a computer operator, might warrant further investigation to see if their workplace can be modified to avert more complications.
For planned absences it is worth a supervisor’s time to include the employee in planning for coverage for their position.  Seek suggestions for allocating their chores, and in case of surgery or medical leave offer a modified work schedule to allow them to return more quickly. 
During non-vacation absences it is important to stay in touch with the employee. For all absences make sure that any changes made in their work area are relayed to them before they return. 
Managers have the difficult task of keeping their work unit running smoothly while having to work around absent employees.  The unit employees should be familiar enough with each other’s jobs to be able to cover for the absent member, unless the position is highly specific , in which case the manager should be able to secure coverage.  The manager should also be tuned in to the needs of the group, and if there’s a particularly unhappy employee who might have multiple absences, address the issue and mitigate the problem if possible. 
Actual disciplining of employees that abuse the company leave policies is more difficult.  There are a number of regulations such as the federal and state medical leave laws, disability absences, bereavement and many more.  It is important that the employees understand clearly the company policies, and any potential problems are addressed immediately by the employer.
Providing a supportive atmosphere for the employee while having the expectation that they’ll be at their jobs as required is a balancing act.  That’s why we have managers – best of luck to them!

Tags: benefits, employee benefits, employee morale, performance management

An article in the Society For Human Resource Management (www.shrm.org) magazine brings attention to a bill introduced in both houses of Congress that affects companies using contract workers.  Known as the Employee Misclassification Prevention Act, the new proposed bill adds paperwork and other costs that may reduce the savings benefit to companies using contract workers. The employer in the past wasn’t required to keep documentation on non-employees and in many cases wasn’t responsible for payroll taxes for that worker.  Under the propsed bill that will change.

There are speculations as to why this bill is necessary.  One reaon may be that a misclassified contract worker is prevented from accessing wage and hour protections and benefits they may be entitled to. 

Among the bill’s many provisions targeting misclassification:

* Requiring that employers keep records reflecting the correct status of each worker as an employee or nonemployee and stating expressly that employers violate the FLSA when they misclassify workers.
* Increasing penalties on employers who misclassify their employees and are found to have violated employees’ overtime or minimum wage rights. Civil penalties would be imposed, up to $1,100 per employee for first-time violators, and up to $5,000 per employee for repeat or willful violators.
* Allowing double liquidated damages for employers that fail to accurately classify an individual as an employee and violate the minimum wage or maximum hour provisions of FLSA.
* Requiring employers to notify workers in writing of their classification as an employee or nonemployee.
* Creating an official Department of Labor (DOL) “employee rights web site,” explaining that employees may have additional or greater rights under state or local laws and how employees may obtain additional information about their rights under state or local laws (the web site may provide a link to permit individuals to file complaints online with the Wage and Hour Division).
* Providing protections to workers who are discriminated against because they have sought to be accurately classified.
* Mandating that states report quarterly to the DOL the results of state auditing and investigative procedures with respect to identifying employers that may have excluded employees from unemployment compensation coverage.
* Directing states to strengthen their own penalties for worker misclassification.
* Permitting the Wage and Hour Division, other administrations of DOL, and the Internal Revenue Service to refer incidents of misclassification to one another.
* Directing the DOL to perform targeted audits focusing on employers in industries that frequently misclassify employees.

Tags: employee benefits, For Employers, Hiring Trends, industry news