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Top 10 Best Practices for Human Resources in 2012

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Top 10 Best Practices for Human Resources in 2012

  1. 1. SPECIAL REPORTTop 10 BestPractices inHR ManagementFor 201230610860
  2. 2. SPECIAL REPORTTop 10 BestPractices inHR ManagementFor 201230610800
  3. 3. Chief Content Officer: Ed KeatingFounder: Robert L. Brady, J.D.Managing Editor—HR: Patricia M. Trainor, J.D., SPHRLegal Editor: Susan E. Prince, J.D.Editor: Elaine V. QuayleProduction Supervisor: Isabelle B. SmithGraphic Design: Catherine A. DownieProduction & Layout: Sherry NewcombThis publication is designed to provide accurate and authoritative information inregard to the subject matter covered. It is sold with the understanding that the pub-lisher is not engaged in rendering legal, accounting, or other professional services.If legal advice or other expert assistance is required, the services of a competentprofessional should be sought. (From a Declaration of Principles jointly adoptedby a Committee of the American Bar Association and a Committee of Publishers.)© 2006-2012 BLR®—BUSINESS & LEGAL RESOURCESAll rights reserved. This book may not be reproduced in part or in whole by anyprocess without written permission from the publisher.Authorization to photocopy items for internal or personal use or the internalor personal use of specific clients is granted by Business & Legal Resources.For permission to reuse material from Top 10 Best Practices in HR Managementfor 2012, ISBN 1-55645-317-5, please go to http://www.copyright.com or contact theCopyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923,978-750-8400. CCC is a not-for-profit organization that provides licenses and registra-tion for a variety of uses.ISBN 1-55645-317-5Printed in the United States of AmericaQuestions or comments about this publication? Contact:BLR—Business & Legal Resources100 Winners Circle, Suite 300P Box 41503 .O.Nashville, TN 37204-1503860-510-0100800-785-9212 (fax)http://www.blr.comTop 10 Best Practices in HR Management for 2012
  4. 4. Table of Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 #1 Healthcare in 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 #2 FMLA Paid Leave Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Feds Encouraging States to Legislate Paid Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Paid Sick Leave Benefits: What the Numbers Show . . . . . . . . . . . . . . . . . . . . . . . . . . .6 #3 Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Best Practice: Employee Communities Drive Engagement at Top Company . . . . . . . . .10 #4 Social Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Blogging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 FTC Guidelines on Testimonials and Endorsements . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Best Practice: 5 Reasons to Focus Your Social Media Recruiting on LinkedIn . . . . . .15 Best Practice: Using Social Media to Communicate Sustainability Achievements . . . . .17 #5 Environmental Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 5 Reasons Why You Need a Green Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Best Practice: Energy-Saving Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Best Practice: Do You Have a Recycling Policy? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 #6 Workplace Wellness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 What Is Wellness? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Legal Issues Related to Workplace Wellness Programs . . . . . . . . . . . . . . . . . . . . . . . . .22 Best Practice: Suggestions for Wellness Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Best Practice: 13 Inexpensive Tips for Encouraging Wellness Program Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 #7 Classifying Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Topic: Amendments to the Fair Labor Standards Act (FLSA) Recordkeeping Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 IRS Voluntary Worker Classification Settlement Program . . . . . . . . . . . . . . . . . . . . .27 Wage and Hour Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 Best Practice: How to Prepare for an Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 #8 Retirement of Baby Boomers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 Teamwork, Participation Are Generally Important to Baby Boomers . . . . . . . . . . . .31 © BLR®—Business & Legal Resources 30610800
  5. 5. Healthcare, Technology Skills Among Baby Boomers’ Concerns . . . . . . . . . . . . . . .32Succession Planning: A Strategy for Meeting Talent Needs . . . . . . . . . . . . . . . . . . . .32Best Practice: Retirement Policies to Protect Your Organization and Prepare Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35#9 Identity Theft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36FACTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36Red Flags Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37Best Practice: Protecting Employees from Identity Theft . . . . . . . . . . . . . . . . . . . . . .38Breach of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39Best Practice: Preventing Security Breaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39Employers’ Private Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40#10 Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41Benefits of Good Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41Causes of Ineffective Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41Encouraging Employees to Communicate Better . . . . . . . . . . . . . . . . . . . . . . . . . . .42Tools for Better Communicating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42Best Practice: Avoid Scheduling Meetings on Friday Afternoons or Monday Mornings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45Top 10 Best Practices in HR Management for 2012
  6. 6. Introduction The role of Human Resources is changing as fast as technology and the global marketplace. Historically, the HR Department was viewed as administrative over- head. HR processed payroll, handled benefits administration, kept personnel files and other records, managed the hiring process, and provided other administrative support to the business. Those times have changed. 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, legal, and other- wise. This special report discusses the top 10 best practices in HR management for 2012—in other words, how HR managers can anticipate and address some of the most challenging HR issues this year. This report will give you the information you need to know about these current HR challenges and how to most effectively man- age them in your workplace.#1 Healthcare in 2012 The enactment of the Patient Protection and Affordable Care Act (PPACA), as amended by the Health Care and Education Reconciliation Act of 2010 (HCERA), collectively referred to as the Affordable Care Act (ACA), launched an extended period during which far-reaching changes to the American healthcare system will take effect. These reforms are built on the current employer-based system and are impacting every employer in the country. Reform on this scale is multifaceted and continues to take effect in uneven incre- ments between 2012 and 2018.. We’ll cover what has to be planned for in 2012, 2013, 2014, and 2018 as the pieces of the reform package come into play. Keep in mind that the two biggest pieces of the reform process, the individual mandate and employer play-or-pay, don’t take effect until 2014. 2012 Benefits Summary Requirement. By March 23, 2012, a summary of benefits and coverage explanation that meets the national standards for providing a summary of benefits and coverage must be provided to applicants at the time of application, to the enrollee before the time of enrollment or reenrollment, and to a policy- holder or certificate holder at the time of issuance of the policy or delivery of the certificate. The U.S. Department of Health and Human Services (HHS), Internal Revenue Service (IRS), and Department of Labor (DOL) have issued proposed national standards for providing the summary of benefits and coverage explana- tion. The agencies are soliciting comments on factors that may affect the feasibility of implementation by that date. © BLR®—Business & Legal Resources 30610800 1
  7. 7. Quality of Care Reporting. No later than March 23, 2012, requirements for use by group health plans and health insurance issuers offering group or individual health insurance coverage to report benefits and healthcare provider reimburse- ment structures that improve health outcomes through the implementation of activities are to be issued. Examples of activities to be reported include quality reporting, effective case man- agement, care coordination, chronic disease management, and medication and care-compliance initiatives; activities to prevent hospital readmissions through a comprehensive program for hospital discharge that includes patient-centered education and counseling, comprehensive discharge planning, and post-discharge reinforcement by an appropriate healthcare professional; activities to improve patient safety and reduce medical errors through the appropriate use of best clinical practices, evidence-based medicine, and health information technology under the plan or coverage; and wellness and health promotion activities. Plans and insurers must annually report whether the benefits under the plan or coverage satisfy these elements. 2013 Health Insurance Administration Simplification. Rules establishing a single set of operating rules for eligibility verification and claims status should have been adopted by July 1, 2011, and take effect January 1, 2013. Rules for electronic funds transfer and healthcare payment and remittance rules must be adopted by July 1, 2012, and take effect January 1, 2014. Rules for health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, and referral certification and authorization rules are to be adopted by July 1, 2014, and take effect January 1, 2016. Health plans must docu- ment compliance with these standards or face a penalty of no more than $1 per covered life. The penalty takes effect April 1, 2014. Medicare Tax. Effective January 1, 2013, the Medicare Part A (hospital insurance) tax rate on wages goes up by 0.9 percent (from 1.45 percent to 2.3 percent) on annual earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly. There is also a 3.8 percent Medicare tax assessment on invest- ment income from interest, dividends, royalties, rents, gross income from a trade or business, and net gain from disposition of property for individuals earning over $200,000 and families earning over $250,000. FSA Contribution Limit. Effective January 1, 2013, contributions to a Flexible Spending Account (FSA) for medical expenses are limited to $2,500 per year increased annually by the cost-of-living adjustment. Elimination of Tax Deduction for Part D Subsidy Payment. Effective January 1, 2013, the tax deduction for employers that receive Medicare Part D retiree drug subsidy payments is eliminated. Requirement on Employers to Inform Employees of Coverage Options. Employers are to provide to each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), written notice informing the employee of the existence of an Exchange, including a description of the services provided by such an Exchange, and how the employee may contact the Exchange to request assistance; if the employer plan’s share of the total allowed costs of2 Top 10 Best Practices in HR Management for 2012
  8. 8. benefits provided under the plan is less than 60 percent of such costs, theemployee may be eligible for a premium tax credit under Section 36B of the Inter-nal Revenue Code of 1986 and a cost-sharing reduction under Section 1402 of thePPACA if the employee purchases a qualified health plan through the Exchange;and if the employee purchases a qualified health plan through the Exchange, theemployee will lose the employer contribution (if any) to any health benefits planoffered by the employer and that all or a portion of such contribution may beexcludable from income for federal income tax purposes.2014Individual Mandate. United States citizens and legal residents will be required tohave qualifying health coverage beginning in 2014. Those who do not have cover-age will be required to pay a yearly financial penalty of the greater of $695 perperson (up to a maximum of $2,085 per family) or 2.5 percent of householdincome, phased in from 2014–2016. Exceptions will be given for financial hardshipand religious objections.Employer Play or Pay—The Employer Mandate. Effective in 2014, employerswith more than 50 employees that do not offer coverage, and have at least one full-time employee who receives a premium assistance tax credit, must pay a fee of$2,000 per full-time employee. The first 30 employees are not counted for assessingthe fee. Employers with more than 50 employees that offer coverage but have atleast one full-time employee receiving a premium tax credit will pay the lesser of$3,000 for each employee receiving a premium credit or $2,000 for each full-timeemployee. Employers that offer coverage will be required to provide a voucher toemployees with incomes below 400 percent of the poverty level if their share ofthe premium cost is between 8 percent and 9.8 percent of income to enable themto enroll in a plan in an Exchange and will not be subject to the above penalty.Large Employer Automatic Enrollment Requirement. Effective in 2014, largeemployers with more than 200 full-time employees that offer coverage will berequired to automatically enroll employees in the employer’s lowest cost plan ifthe employee does not sign up for employer coverage or does not opt out of cover-age. Any automatic enrollment program must include adequate notice and theopportunity for an employee to opt out of any coverage.Insurance Exchanges for Individuals and Small Businesses. By 2014, state-based American Health Benefit Exchanges and Small Business Health OptionsProgram (SHOP) Exchanges, administered by a governmental agency or nonprofitorganization, are to be operating so that individuals and small businesses with upto 100 employees can purchase qualified coverage.Guaranteed Issue, Renewability, and Rating Variation Requirements. Effec-tive January 1, 2014, insurers will be required to guarantee issue and renewabilityand allow rating variation based only on age (limited to 3-to-1 ratio), premiumrating area, family composition, and tobacco use (limited to 1.5- to-1 ratio) in theindividual and the small group market and the Exchanges.Annual Limits. Effective for plan years beginning on or after January 1, 2014,plans and insurers may no longer impose annual dollar limits on coverage.Limit on Waiting Periods. Effective for plan years beginning on or after January1, 2014, insurers and plans must limit any waiting periods for coverage to 90 days.© BLR®—Business & Legal Resources 30610800 3
  9. 9. Wellness Incentives. Effective for plan years beginning on or after January 1, 2014, employers may offer employees rewards of up to 30 percent (increasing to 50 percent, if appropriate) of the cost of coverage for participating in a wellness program and meeting certain health-related standards. Preexisting Condition Exclusions. The application of preexisting condition exclusions for plan years beginning on or after January 1, 2014, is prohibited. Comprehensive Health Insurance Coverage. Effective for plan years beginning on or after January 1, 2014, a health insurance issuer that offers health insurance coverage in the individual or small group market must ensure that such coverage includes the essential health benefits package that includes at least the following general categories and the items and services covered within the categories: N Ambulatory patient services N Emergency services N Hospitalization N Maternity and newborn care N Mental health and substance use disorder services, including behavioral health treatment N Prescription drugs N Rehabilitative and habilitative services and devices N Laboratory services N Preventive and wellness services and chronic disease management N Pediatric services, including oral and vision care Limits on Cost Sharing and Deductibles. Effective for plan years beginning on or after January 1, 2014, a group health plan may not provide any annual cost shar- ing in excess of those that apply to Health Savings Accounts (HSAs). 2018 Excise Tax on Cadillac Plans. Effective January 1, 2018, an excise tax is imposed on insurers of employer-sponsored health plans with total values that exceed $10,200 for individual coverage and $27,500 for family coverage. #2 FMLA Paid Leave Initiatives Most employers struggle with managing leave of absence issues, understanding Family and Medical Leave Act (FMLA) laws, and even knowing when a family medical leave of absence is covered by state or federal law. As employers in Con- necticut, California, New Jersey, and Washington state know, state and municipal paid leave initiatives are now taking hold in many places.4 Top 10 Best Practices in HR Management for 2012
  10. 10. Although paid family medical leave of absence laws have failed to pass at the fed-eral level for many years, many state Legislatures have recently taken up the fightby proposing laws to enable employees to take various types of paid leave. Accord-ing to the National Council of State Legislators, at least 19 states had some form ofpaid leave initiative on their legislative calendars at the beginning of 2011.In California and New Jersey, employees are already entitled to paid benefits dur-ing certain types of family leave. On October 1, 2012, Washington state’s paid familyleave law will go into effect. The state law grants employees up to 5 weeks of familyleave insurance benefits, with a maximum weekly benefit of $250 per week.Some states and municipalities have chosen to require paid sick leave for theiremployers. In June 2011, Connecticut became the first state in the nation to man-date paid sick leave exclusively for service workers such as waiters, cashiers, andhairstylists. Under the state paid sick leave law, service companies with 50 or moreworkers in the state must provide service workers 1 hour of sick time for every40 hours worked, up to a maximum of 40 hours per calendar year.The District of Columbia’s Accrued Sick and Safe Leave Act of 2008 entitlesemployees covered by the District Family and Medical Leave Act to paid sick and“safe” leave for use under certain circumstances. The amount of paid sick leavegiven to the employee depends on the size of the employer and may be used byan employee for any of the following reasons:N Physical or mental illness, injury, or medical condition of the employee;N Obtaining professional medical diagnosis or care, or preventive medical care, for the employee, provided that the employee makes a reasonable effort to schedule such leave in a manner that does not unduly disrupt the operations of the employer;N Caring for a child, a parent, a spouse, domestic partner, or any other family member who has a physical or mental illness, injury, or medical condition or needs for diagnosis or care; orN If the employee or the employee’s family member is a victim of stalking, domestic violence, or sexual abuse, provided that the absence is directly related to social or legal services pertaining to the stalking, domestic violence, or sexual abuse.Cities have also gotten into the act, requiring paid sick leave by local ordinance.For example, in San Francisco employers are required to provide 1 hour of paidsick leave to an employee for every 30 hours worked. Under the ordinance,employees are allowed to accrue up to 40 hours of paid sick leave if they work fora small employer (fewer than 10 employees). Employees of larger employers canaccrue up to 72 hours.Effective September 1, 2012, the city of Seattle, Washington, will require that employ-ees in the city accrue paid sick time. The amount of time accrued will depend onthe size of the employer, and permissible reasons for leave range from an absenceresulting from an employee’s or employee’s family member’s mental or physical ill-ness, injury, or health condition; accommodating the employee’s need for medicaldiagnosis, care, or treatment of a mental or physical illness, injury, or health condition;or an employee’s need for preventive medical care. Also covered are situationswhen the employee’s place of business or a child’s school or place of care has© BLR®—Business & Legal Resources 30610800 5
  11. 11. been closed by order of a public official to limit exposure to an infectious agent, biological toxin, or hazardous material, and for reasons related to domestic vio- lence, sexual assault, or stalking. Feds Encouraging States to Legislate Paid Leave In order to entice the states to continue the move toward legislating paid leave for employees, DOL is pitching in. The 2012 Fiscal Budget for DOL includes $23,000,000 to fund the fed’s State Paid Leave Initiative, which will provide grants to assist additional states to establish paid leave programs. Typically, the programs are state-run insurance programs financed by employer and/or employee contribu- tions, and the programs offer up to 6 weeks of benefits to workers for reasons cov- ered under the federal FMLA who must take time off to care for a seriously ill child, spouse, or parent, or bond with a newborn or recently adopted child. Under this initiative, grants would be provided to assist additional states in plan- ning and start-up activities relating to state family paid leave programs. These funds will be provided to states for preimplementation planning grants to support activities designed to position a state to enact legislation and prepare for imple- mentation and implementation grants. Planning activities will include designing a program, establishing protocol for legis- lation to withhold taxable wages, defining family eligibility and benefits require- ments, and articulating start-up activities. Funds may also be used for activities such as research and analysis, coalition building; stakeholder consultation; devel- opment of a financing model and benefit structure; and development of an out- reach plan; and will culminate in a blueprint for implementation. Paid Sick Leave Benefits: What the Numbers Show In a recent report by the U.S. Bureau of Labor Statistics (BLS) examining paid sick leave benefits, length of service had minimal impact on paid sick leave provisions, but several other worker and company characteristics did affect the provisions. (The report is available at www.bls.gov.) Additionally, BLS’s report reveals that worker characteristics contributed to the differing employer costs associated with providing paid sick leave benefits. The data contained in the report are from the National Compensation Surveys on Employee Benefits in the United States and Employer Costs for Employee Compensation. Highlights of the report include: N Private industry workers access to paid sick leave benefits varied by occupa- tional group and ranged from 84 percent for management, professional, and related occupations to 42 percent for service workers. N 81 percent of employees earning wages in the highest 25 percent of the wage distribution had access to paid sick leave, compared to only 33 percent for employees in the lowest 25 percent. N In private industry, employees received an average of 8 days of paid sick leave after 1 year of service, with large establishments providing an average of 11 days and small establishments offering an average of 6 days.6 Top 10 Best Practices in HR Management for 2012
  12. 12. N The cost for sick leave per employee hour worked in state and local govern- ment was 81 cents compared to 23 cents in private industry. N Higher paying occupations typically incur higher sick leave costs. For example, the average employer cost for sick leave benefits in management, professional, and related occupations was 53 cents per employee hour worked in private industry; the cost for service occupations was just 8 cents per employee hour worked.#3 Ethics Workplace ethics defines a standard of acceptable behavior on the job. It is a set of rules by which to judge decisions and conduct in the workplace. Many corporate leaders who fail to act ethically have been prosecuted and incarcerated, and the U.S. Congress has legislated significant changes in financial reporting and other laws to enforce ethical behavior. The Sarbanes-Oxley Act of 2002 (SOX) and the Federal Sentencing Guidelines have placed strict legal requirements on covered employers. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) created additional whistleblower protections. Making ethical choices on the job, even for the ethically minded, is not always easy. There may be many reasons that drive people to cross the line and act unethically. Here are a few examples: N Conflicts of interest force employees to choose between self-interest and the interests of co-workers, the department, or the organization. Sometimes the choice is between the interests of a customer and the interests of the organiza- tion, or between the community and the organization. N It is sometimes hard to draw a line between personal and business relation- ships. Employees forge friendships with co-workers, yet may have to make pro- fessional choices that do not seem very friendly. For example, if a co-worker does something wrong, an employee may have to report the situation. If a cus- tomer with whom an employee has a good relationship tries to use the rela- tionship in some unethical way, the employee is in a difficult situation. N Massaging the truth, telling “little white lies,” and failing to tell the whole story can all have an effect on the outcome of a situation. N Confidential information is exactly that—confidential and privileged. Ethically, employees cannot use any confidential business information for self-gain or pass along such information to benefit friends or family, whether that informa- tion is about the organization or its customers. N Laws and regulations are another problem area. There are many confusing laws. Even if an employee understands the law, he or she may not agree with it. It can be tempting to cut corners or forget about the details. N Pressure to succeed, pressure to get ahead, pressure to meet deadlines and expectations, and pressure from co-workers, bosses, customers, or vendors to © BLR®—Business & Legal Resources 30610800 7
  13. 13. engage in unethical activities or at least look the other way can drive people to do things they would not normally do. N Some people make unethical choices because they are not sure about what really is the right thing to do. Ethical problems are often complicated, and the proper choice may be far from obvious. N Self interest, personal gain, ambition, and downright greed are at the bottom of a lot of unethical activity in business. Also, there are those who simply never learned or do not care about ethical values. Because such individuals have no personal ethical values, they do not have any basis for understanding or apply- ing ethical standards in business. N Misguided loyalty can cause employees to lie because they think that in doing so, they are being loyal to the organization or to their bosses. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) The Dodd-Frank Act provides significant financial incentives for employees to disclose to government officials what they believe may be illegal conduct by their employers. Here is a summary of the laws affected by the Dodd-Frank Act’s whistle- blower provisions. Sarbanes-Oxley Act. SOX prohibits retaliation against employees of publicly traded companies who report acts of mail, wire, bank, or securities fraud; fraud against shareholders; or violations of any rule or regulation of the Securities and Exchange Commission (SEC) to their supervisors or other appropriate officials within their companies or federal officials with the authority to remedy the wrongdoing. The law also prohibits retaliation against employees who assist in any investigation of such violations or participate in any proceeding related to an alleged violation of these laws (18 USC Sec. 1514A). Employees claiming retaliation under SOX must exhaust administrative remedies before bringing an action in court. Complaints are handled by DOL. If DOL does not issue a ruling within 180 days, the employee may seek a trial in federal court. The Dodd-Frank Act clarified some unsettled SOX issues. For example, courts were split on whether SOX grants whistleblowers a right to a jury trial. The Dodd-Frank Act makes clear that jury trials are available under the law. In addition, the Dodd- Frank Act amends SOX by adding the following provisions: N Non-publicly-traded subsidiaries of publicly traded companies are now covered by SOX. N Nationally recognized statistical ratings organizations are not covered by SOX. N The statute of limitations is extended from 90 days to 180 days. N Predispute arbitration agreements are prohibited under SOX. N Individuals cannot waive their rights or remedies under SOX. Securities and Exchange Commission Act. The Dodd-Frank Act created additional whistleblower protections under the SEC Act. Employees who provide8 Top 10 Best Practices in HR Management for 2012
  14. 14. information regarding securities law violations are entitled to between 10 percentand 30 percent of monetary sanctions recovered that exceed $1 million. Employersmay not retaliate against employees who provide information regarding securitieslaw violations to SEC, assist in the SEC’s judicial or administrative investigations, ormake required or protected disclosures under SOX or other laws subject to SECjurisdiction.Employees claiming retaliation may bring a claim in federal court, and if theyprevail, they may be awarded double back pay, attorney’s fees, and other costs.Employees must bring their claim within 6 years of the retaliation, or within 3 yearsafter the employer knew or should have known of the retaliatory conduct; in nocase can a claim be made more than 10 years after the retaliation. Practicallyspeaking, this provision gives SOX plaintiffs the opportunity to bring a claim in fed-eral court without first following the administrative procedures required by SOX.Commodity Futures Trading Commission (CFTC). The Dodd-Frank Act createda whistleblower program to protect employees who provide information related toviolations of the Commodity Exchange Act or assist in an investigation or judicialor administrative action based on such information. As with the SEC Act, CFTCwhistleblowers are eligible to receive 10 percent to 30 percent of any fines recov-ered by CFTC that exceed $1 million. Also, individuals may bring retaliation claimsin federal court. Predispute arbitration agreements are prohibited, as are waivers ofrights under the Act. However, unlike the SEC Act, complaints under the CFTCwhistleblower provisions must be brought within 2 years of the violation.Consumer Financial Protection Bureau. The Dodd-Frank Act created a Bureauof Consumer Financial Protection and provides whistleblower protections foremployees who work in the consumer financial services sector. These employersmay not retaliate against an employee “performing tasks related to the offering orprovision of a consumer financial product or service” who has:N Provided information to his or her employer, the Bureau, or any local, state, or federal authority relating what the employee reasonably believes to be a viola- tion of one of the consumer financial services laws protected by the Bureau or other Bureau rules;N Testified in any proceeding related to enforcement or administration of the Consumer Financial Protection Act of 2010, any of the other laws protected by the Bureau, or Bureau rules;N Filed or instituted any proceeding under federal consumer financial law; orN Objected to, or refused to participate in, any activity, policy, practice, or assigned task that the employee reasonably believed to be in violation of any law sub- ject to the jurisdiction of or enforced by the Bureau.Employees who believe they have been retaliated against for taking any of theactions set forth above may file a complaint with DOL. If, after an investigation,DOL finds in favor of the employee, it will order the employer to take affirmativeaction to abate the violation. In addition, the employee will be awarded back pay,reinstatement, compensatory damages and, upon request, attorney’s fees up to$1,000. If DOL does not issue a final order within 210 days after the employee filedthe complaint, or within 90 days after it has issued a written determination on theclaim, the employee may file suit in federal court.© BLR®—Business & Legal Resources 30610800 9
  15. 15. As with other whistleblower provisions under the Dodd-Frank Act, employees may not waive their rights under this provision of the Dodd-Frank Act. Also, predispute arbitration agreements are prohibited. False Claims Act. Under the False Claims Act, an individual may bring a court action, known as a qui tam action, against any person who knowingly makes a false claim for payment from the government (31 USC Sec. 3729 et seq.). Employers are prohibited from retaliating against employees who participate in a qui tam action. Employees who prevail on a retaliation claim may be entitled to reinstate- ment, as well as double back pay, special damages, costs, and attorney’s fees. The Dodd-Frank Act expanded covered individuals to include not only the whistle- blower but also “associated others.” It also provides that employees have 3 years from the time of the retaliation to bring a claim. Best Practice: Employee Communities Drive Engagement at Top Company HP Advanced Solutions, located in Victoria, British Columbia, has been recognized as a Psychologically Healthy Workplace by the American Psychological Associa- tion (APA) and was recognized as one of “Canada’s Top 100 Employers” by Media- corp Canada in 2010. The APA award is very difficult to achieve, explains Greg Conner, vice president of Human Resources and Communications, with APA members surveying employees of nominated organizations, conducting on-site, one-to-one interviews with employees, and conducting a rigorous review of each organization’s policies and procedures. HP Advanced Solutions (www.edsadvancedsolutions.com), with a total of 400 employees, was founded in 2004 and is expert in information technology processes and hosting infrastructures services, says Cynthia Funnell, director of Marketing and Communications. With two distinct business lines, HP Advanced Solutions provides revenue manage- ment for the province of British Columbia, mainly through a call center with 50 agents collecting monies owed to the province, and a high technology division that provides applications and mainframe services for the province as well as some government-owned corporations. Conner explains that the company’s mission is to be the number one provider of labor-friendly business process and technology services. Of the 400 employees at HP Advanced Solutions, 370 are unionized. The voluntary employee turnover rate was only 6 percent in 2010 and 7 percent in 2009. Conner bases his employee-focused initiatives on the following foundation or prin- ciple that he mentions often:“When employees are engaged, they’re productive. Productive employees earn more money for their company. There are many exten- sive and cost-effective ways to create employee engagement and they ultimately impact the bottom line [in a positive manner].” Communities of Employees. One of his initiatives is creating and maintaining communities of employees that work together as cross-functional teams outside of their regular roles and work environments for the good of other employees, the organization, and the outside communities surrounding HP Advanced Solutions.10 Top 10 Best Practices in HR Management for 2012
  16. 16. The communities at HP Advanced Solutions currently include the Social andCharitable Community, the Development Community, the Health and WellnessCommunity, and the Sustainability Community. All of these consist of employeesvolunteering to participate with no designated end to their terms, says Conner.The Social and Charitable Community plans events, such as Jeans Day, Halloweenparties, and Global Volunteer Days, says Conner. The Global Volunteer Days areSaturday events and generally attract 40 to 50 employees and family members,who work together at a community organization of their choice, explains Conner.The company provides a little seed money for supplies, he adds. The employeesare surveyed regarding the organizations that they’d like to help.One Global Volunteer Day, for example, resulted in the dressing up of the barnand offices for the Victoria Disabled Riding Association, which provides horsebackriding opportunities for adults and children with physical and psychologicaldisabilities.Employee Recognition. The Development Community focuses on rewards andrecognitions for employees, says Conner. For example, there’s the Above andBeyond Award, given on a monthly basis to an employee doing something wellbeyond what is expected. Employees make the nominations for the award.Conner says that at the company anniversary party held in December eachyear, the Development Community coordinates the presentation of employeerecognition awards. One award, named “Starting Strong,” is given to a person in hisor her first or second year of employment who demonstrates the attitude andethics that everyone at the company would like to see.“An award, Employee Excellence, is given out to the employee who embodies thespirit of productivity and also has great relationships with fellow co-workers andthe community,” explains Conner. “The Volunteer award is given to someone whovolunteers internally, in local communities, or even internationally. The Leadershipaward goes to the employee who demonstrates [excellent] leadership.”The final community is Sustainability. “At the first meeting, we had 55 people. ThisCommunity is designed to look at ways we can be more environmentally sensitive.”One significant change that came from Sustainability was to change all theprinters to handle double-sided printing. It cut down on waste paper and saved30 percent in the amount of paper used by the company, he explained.These Communities provide only one aspect of what is done to strengthen the HPAdvanced Solutions work culture.‘The Golden Rule.’ Conner comments,“It’s all about creating a workplace thatyou are proud to be part of. It helps to keep people engaged. It’s the secular versionof The Golden Rule—treating each other the way you would like to be treated. Ifyou operationalize that, you will have the kind of environment that you want andyou can demonstrate [the results of] that.”© BLR®—Business & Legal Resources 30610800 11
  17. 17. #4 Social Media Employers are recognizing that social networking sites such as Facebook, LinkedIn, and MySpace can be useful marketing and recruiting tools. Likewise, employees have increasingly been utilizing social networking sites for a variety of uses, both personal and professional. Although these sites can be beneficial, their use can also have risks. Discrimination. Some employers review social networking sites as a method of screening applicants. Generally, once an applicant or employee posts something on a public domain, such as a social networking site, an employer is free to view it. However, by viewing candidate profiles, employers may learn more information (e.g., race, disability, age, religion, family/marital status, sexual orientation) than the employer could legally ask about directly. Therefore, it is critical that employers base all interviewing and hiring decisions on job-related criteria. Employers must also be aware that everything they find on a social networking site may not be cur- rent, accurate, or even placed there by the prospective applicant, as users of these sites sometimes “pretext” or pretend to be someone else. Background Check Laws. The federal Fair Credit Reporting Act (FCRA) requires employers to obtain applicants’ consent when a third party conducts a back- ground investigation. Some states also have their own background check laws. It is unclear whether these laws would require consent from an applicant before an employer or third party conducted an Internet search as part of a background check. However, even if not legally required to do so, employers should consider getting consent so that applicants are on notice that the information they post on social networking sites may be reviewed by the employer. Monitoring Employee Use of Social Networking Sites. There is little case law addressing the monitoring by employers of employees’ social networking posts. However, the few cases in this area suggest that courts will be reluctant to uphold an invasion of privacy claim (whether based on the federal constitution or state common law) when an employee voluntarily posts information on a public site. But the outcome may be different if employees set up an invitation-only site and have an expectation that only invited users will be able to read their posts. For example, a federal district court in New Jersey held that employees could pro- ceed with their invasion of privacy claim when they were fired after uninvited company managers accessed their invitation-only Web discussions of workplace grievances (Pietrylo v. Hillstone Restaurant Group, No. 06-5754 (D. N.J. 2008)). The court also permitted the employees to proceed with their claim that the managers violated the federal Stored Communication Act (SCA) and similar state law. The employees argued that one of the managers pressured an employee to provide him with her password to the site. The court reasoned that if proven, this would show a violation of the SCA and state law, because authorization to view the site was not “freely given.” In contrast, a California state court rejected an invasion of privacy claim by a college student who posted an essay highly critical of her home town on a social networking site (Moreno v. Hanford Sentinel, 172 Cal. App. 4th 1125 (2009)). The student’s former school principal forwarded the post to a local newspaper that12 Top 10 Best Practices in HR Management for 2012
  18. 18. published it. The student and her family were then subject to hostile treatmentfrom community members, including some death threats. The student claimedthat the school principal invaded her privacy by sending the post to the newspa-per. The court rejected her claim, noting that she posted the essay on a socialnetworking site available to anyone with Internet access. The court did, however,permit the student to pursue a claim of intentional infliction of emotional distressagainst the principal.On the basis of these cases, employers should be aware that while it may not be aninvasion of privacy to access an employee’s public social networking site, actionstaken based on the information on the site may lead to liability under other legaltheories. Moreover, coercing an employee to provide access to a private site maybe an invasion of privacy, as well as a violation of federal and state law. Employersshould also keep in mind that some states have laws prohibiting employers fromtaking adverse action against an employee for engaging in legal activities whileoff-duty. An employer in a state with such a law may face liability if it takes adverseaction against an employee because of the employee’s legal activities shown on asocial networking site.Practice tip: Because this area of the law is in its infancy, employers should con-sult with legal counsel before taking adverse action against an employee becauseof his or her posts on a social networking site.National Labor Relations Board (NLRB). Employers need to exercise cautionwhen disciplining employees for their use of social media. While an employer mayjustifiably believe discipline, or even termination, is appropriate when an employeeuses social media to criticize the company, the NLRB may interpret the same criti-cism as protected concerted activity.The NLRB has issued several complaints against companies that provide insightinto how the NLRB views social media in the context of concerted action byemployees. In addition, the NLRB’s Acting General Counsel has issued a report oncases arising in the context of social media to assist practitioners and HR profes-sionals in this area.Generally, if an employee uses social media for concerted activity, such as actingwith or on behalf of other employees regarding the terms and conditions ofemployment, the NLRB is likely to find the activity protected, even if the employeedisparages the employer. In contrast, employees are not protected by the NationalLabor Relations Act (NLRA) if they use social media to post their individual com-plaints about management or workplace policies.For example, the NLRB filed a complaint against an ambulance company whenit fired an employee who had posted negative comments about her supervisoron her Facebook page. In another case, an administrative law judge held that anonunion employer committed an unfair labor practice when it fired five employ-ees because of Facebook postings. One of the employees posted to her Facebookpage a co-worker’s comment that employees did not do enough to help theorganization’s clients. This post generated angry responses from other employees,who defended their job performance and complained about working conditions.The judge noted that the employees were “taking the first step” toward groupaction to defend themselves against accusations that they could have reasonablybelieved would have been brought to management (Hispanics United of Buffalo,Case No. 3-CA-27872 (Sept. 2, 2011)).© BLR®—Business & Legal Resources 30610800 13
  19. 19. However, employers may discipline or terminate employees because of their inap- propriate social media postings as long as the postings do not involve protected concerted activity. In one case, the General Counsel recommended dismissing an unfair labor practice charge against a newspaper that fired a reporter for sending “inappropriate and unprofessional” tweets from a work-related Twitter account. The reporter criticized the paper’s copy editors, the city where the paper was located, and a TV station that made a spelling error on its Twitter feed. The employee had been warned that his tweets were unprofessional and damaging to the newspa- per’s goodwill. The General Counsel found that the reporter’s actions did not involve concerted activity. Likewise, when an employee used social media to air his “individual gripes” against a manager, his activity was not protected. Here, the employee posted a Facebook comment expressing frustration about a dispute with a manager over mispriced and misplaced items. Some employees responded to the posting expressing emo- tional support and asking why the employee was so wound up. The employee’s comments contained no suggestion that other employees engaged in group action, and the employees’ responses gave no indication that they interpreted his com- ments in such a way. The Acting General Counsel’s report also addresses standards for social media policies. Social media policies must be drafted so that they would not reasonably be interpreted to deter employees’ exercise of their rights under the NLRA. For example, a policy that stated employees should be cautious about posts involving the employer that could be construed as inappropriate was considered too broad by the NLRB. This was because the policy contained no direction as to what would be considered “inappropriate.”Thus, employers should include definitions, exam- ples, or other guidance in social media policies to clarify broad terms. This area of the law is evolving. Employers should draft Internet and social media policies carefully so that they do not prohibit employees from engaging in activi- ties protected by the NLRA, and these policies should be reviewed by legal coun- sel. Additionally, until the law is settled in this area, employers considering adverse action against an employee who posted comments on social media about working conditions may first want to consult with local employment counsel. Employees’ Use of Social Networking Sites. Employers may find that employ- ees use social networking sites to post positive information about their organiza- tion’s products or work culture. Unfortunately, employee posts can also be detrimental to employers. Therefore, employers should have policies in place set- ting forth their expectations regarding employee’s social networking as it relates to the employer. Such policies should prohibit: N Illegal harassment of co-workers or customers; N Interference or disruption of work because of social networking; and N Exposing trade secrets or other proprietary company information. It is also a good idea to train employees on the proper and improper use of social networking at or relating to work.14 Top 10 Best Practices in HR Management for 2012
  20. 20. BloggingBlogging has grown quickly in recent years both with regard to the number of indi-viduals reading and posting to blogs and the number of blogs available on theInternet. There have been a number of highly publicized cases in which employeeswere disciplined or fired for disclosing confidential or proprietary informationabout their companies and/or describing their employers in an unflattering light.Legal Considerations. When addressing blogging by employees, employersshould be aware of legal issues such as the employee’s right to free speech andfree association and the right to be free from restriction on off-duty activities. Manystates prohibit employers from taking action against employees who engage inlawful off-duty activities. However, blogs can also be used to harass or defameco-workers or others. If the company allows the employee to use company facili-ties to create or maintain the blog, the company may be liable for the illegalactions of the employee.In order to prevent inappropriate blogging, employers should consider adding ablogging provision to any existing Internet or electronic communication policy orcreating a separate policy on blogging.FTC Guidelines on Testimonials and EndorsementsThe Federal Trade Commission (FTC) has issued guidelines requiring individualswho are paid to provide testimonials and endorsements on social networking sitesto reveal that they are being compensated (16 CFR 255.5). These guidelines couldaffect employers if their employees tout a product or service on a social network-ing site or blog without mentioning the employer/employee relationship. The FTChas stated that when determining whether to initiate an enforcement action, it willconsider whether the employer had policies and practices relating to employeeparticipation in social media. In the past, the FTC has brought law enforcementactions against companies whose failure to establish or maintain appropriate inter-nal procedures resulted in consumer injury. However, it is unlikely to bring anenforcement action against a company for the actions of a single “rogue” employeewho violated an established company policy.Practice tip: In addition to the tips above, employers should make sure that theirblogging and/or social networking policies contain provisions requiring employ-ees to reveal their employment status whenever they discuss company products orservices using these media. Companies should also enforce these policies as amatter of good business practice and to ensure their credibility in case the FTCreviews a situation.Best Practice: 5 Reasons to Focus Your SocialMedia Recruiting on LinkedInDo you focus your social media recruiting on LinkedIn? Or, do you prefer to use allsocial media avenues? Perhaps you’re avoiding social media for hiring or recruit-ing purposes altogether?According to a recent study, social media can save a lot of money when it comesto recruiting. The cost per-hire using social media is $377, while traditional methods© BLR®—Business & Legal Resources 30610800 15
  21. 21. can run as high as $3,295 per hire. Plus, social media resources such as LinkedIn— which is specifically designed for business use—can quickly help you find the per- fect hire. Effectively incorporating this interactive technology into your recruitment efforts can be a win-win situation for both your new hires and your organization. In a BLR webinar titled “Online Recruiting: How LinkedIn Can Help You Find Talent, Network, and Build a Digital Referral Base,” Linda Duffy, president of Leadership Habitude, outlined ways to meet recruiting challenges using LinkedIn. The SHRM April 2011 Research Spotlight: Social Networking Sites and Staffing found that more than one-half (56 percent) of the organizations currently use social networking websites when recruiting potential job candidates. This is a significant increase since 2008, when a little over one-third (34 percent) of organi- zations were using these sites as a recruiting tool. Duffy confirmed:“I believe if you fast-forward another 3 years, it will be virtually 100 percent because I think this is the trend and the direction we’re going.” Out of the 56 percent of the companies using social networking websites for recruiting, virtually all of them (95 percent) are using LinkedIn. LinkedIn may be your very best resource for making the connections that lead to qualified candidates and, ultimately, job offers. Social media in general has many recruiting benefits. Here are five reasons social media—and LinkedIn in particu- lar—are great for staffing and recruiting: 1. It’s in real time. Candidates can set up alerts to be notified of new job postings and also can receive e-mails, texts, posts, and access websites on their phones. No more waiting on the news cycle to post a new classified advertisement. Nor- mal business hours don’t have to apply. 2. You can build a pipeline: Have candidates come to you! This is one of the unique things about using social media for recruitment. It’s a two-way commu- nication. LinkedIn also has groups users can join that allow them to see job postings immediately. 3. It’s viral (and that’s a good thing). LinkedIn demonstrates this as well as any site—we are no longer communicating one on one; it’s one to many.This is the power of the networking aspect of the site in which something you post can reach not only those who you are connected with but also potentially those they are connected with as well. Additionally, a person can forward or share content and connections and even post a comment on multiple sites at the same time. 4. It’s virtually free.Yes, you’ll have sunk costs if you want something fancy or highly integrated … and you’ll also have labor to monitor and post your ad, but the use of the site itself is free. If you post within a group on LinkedIn, there is no cost, but even if you post on their job section directly, it is only $195. Com- pare that to using offline agencies. 5. LinkedIn demographics tend to skew more professional than other social media sites. While they have fewer users (120 million) than some other social media sites, 70 percent are in the “workforce age population” of between 25 and 54 years of age. LinkedIn users tend to be more affluent and educated compared to those on Twitter and Facebook. This makes LinkedIn critical for recruiting professional candidates; it’s a great choice for meeting your staffing and recruiting needs.16 Top 10 Best Practices in HR Management for 2012
  22. 22. Best Practice: Using Social Media to Communicate Sustainability Achievements You have established a corporate sustainability program, and you are seeing posi- tive results.You have engaged employees, and they are working toward meeting companywide sustainability goals.You have faced challenges and have been cre- ative in creating a program that fits your organization. Now you want to share your achievements with the outside world using social media. But the problem is that there are a lot of companies that are attempting to share their products and stories as well. How do you get your company to rise to the top? Jeannette Bitz and Marianna Grossman have shared five tips on Greenbiz.com for expanding social presence in this increasingly crowded corporate sustainability realm: 1. Be clear and passionate. Convey your goals and strategies clearly, and dis- cuss your company’s viewpoints on issues and the media. Avoid discussing your company and its products, unless they bring an original idea to the conversation. 2. Identify the people with whom you want to communicate. Determine your audience and learn who is leading the conversation.You will need to spend some time doing some research; look for groups on LinkedIn, Twitter, and keywords that will lead you to where the pulse of the sustainability discussion is located that pertains to you. 3. Determine your role in the social media world. Do you want to blog? Join groups? Take the time to determine the best social media tools for your organizations, and create accounts on the networks and forums that you feel are the best fit. 4. Become a part of the group. Once you have determined industry leaders, figure out what makes them influential. Find conversations in which you can contribute, and add your opinions and ask questions. 5. Keep track. As you do with your sustainability program, keep track of your social media progress. Have you identified a new business lead in an online conversation? Have you noticed an increase in the number of followers on your blog?#5 Environmental Responsibility You know that green programs are good for business, so why is it so hard to get upper management buy-in? Maybe it’s because they don’t fully understand all of the benefits of a green program. 5 Reasons Why You Need a Green Program Here are some convincing reasons to help you pitch starting a green program at your company. © BLR®—Business & Legal Resources 30610800 17
  23. 23. 1. It’s easy! Whether it’s a factory, plant, or general office space, opportunities to be green are in every workplace.You can easily train workers to save energy, recycle, and reduce waste at little cost to your company. 2. Your competitors probably have one. If you want to stay competitive or gain an advantage, a green program will help you do that. 3. Your workers want it. Most employees are interested in how their company is practicing corporate social responsibility. This is a great opportunity for you to shine in the eyes of your workers and be an employer of choice because most employees link positive environmental and social activities to brand reputation. 4. It’ll save money. It’s simple, cutting energy costs and waste will save your company money. Simple tasks like printing on both sides of paper, turning off computers and lights during nonworking hours, and conducting water audits can add up to huge savings for your company. 5. It’ll keep you ahead of the regs. If you play in the global market you’ll have to follow several European directives like Waste Electrical and Electronic Equipment, Restriction of Hazardous Substances, and Registration, Evaluation, and Authorization of Chemicals. Best Practice: Energy-Saving Opportunities You’ll be amazed at how easily you can cut your energy bill and protect the envi- ronment for little or even no cost. Evaluate the best opportunities that will be most effective for your company: 1. Track your energy bills:You need to know how much you pay for electricity, natural gas, and fuel oil at your facility. Tip: Understand seasonal charges in your utility bill that can affect your energy-saving actions for heating and cooling. 2. Pinpoint equipment using the most energy: A small portion of the equipment usually accounts for the greatest amount of energy consumption. Tip: Look for large pieces of equipment and equipment that runs most of the time or that has periodic, but substantial, start-up energy requirements. 3. Identify no- or low-cost projects. 4. Get management support:Your goal is to show the value of energy-saving measures and the potential cost and productivity advantages of a more-aggres- sive energy-efficiency program. 5. Create an energy team at your plant: The team will track and report energy uses, identify energy-saving opportunities, develop an energy plan, and imple- ment cost-saving measures. 6. Develop an ongoing strategy to sustain plantwide efforts and to improve and maintain energy-efficient systems. 7. Shut off any lights you are not using. 8. Use compact fluorescent lightbulbs. They use less than 25 percent of the elec- tricity of standard bulbs and last 10 times longer.18 Top 10 Best Practices in HR Management for 2012
  24. 24. 9. Seal drafty doors, windows, and holes around plumbing fixtures to keep out winter cold and summer heat.10. Use the energy-savings setting on all appliances, particularly air conditioners and refrigerators, as well as on office machines such as copiers.11. Unplug computers, monitors, modems, cable boxes, and televisions when not in use. Better yet, plug them into power strips so it’s one easy switch to turn them all off and on.12. Unplug cell phone and PDA chargers when not in use. They use electricity even when they aren’t charging!13. Use green power.“Green power” is defined as electricity that is generated from environmentally preferable, renewable sources such as solar, wind, geothermal, biogas, biomass, and low-impact hydro.14. Switch to paperless bank statements and bill paying to save millions of trees and billions of gallons of water—plus the cost of stamps.15. Drive less! Walk, bike, or take public transportation.Best Practice: Do You Have a Recycling Policy?Businesses can save money by reducing the amount of materials and energy theyconsume and by recycling materials. A policy that establishes your organization’sstrategies for reducing consumption and recycling materials should include clearguidance on work procedures for conservation of energy and recycling. Thesestrategies can save money, improve employee morale, and enhance your organiza-tion’s image in the community.Here are some tips and considerations for developing your company’s recyclingpolicy. Then join the conversation and tells us steps you’ve taken in your goinggreen journey!Review of Policy. Your policy should state that it will be reviewed at least once ayear to make adjustments to any changes in law or changes in items that areacceptable for recycling.Program Administrator. Your policy should identify the person to be contactedwhen there are any questions regarding recycling. This individual should be readilyavailable to answer questions regarding what items are to be recycled and torespond to suggestions for altering your recycling program.Reduction in Paper Used. Your policy could encourage employees not to printor copy documents unnecessarily. Instead, you could encourage employees tomaintain electronic copies of a document rather than paper copies.Packaging. If your business packages items for others, your policy should statethat you seek to minimize the amount of packaging used to reduce trash. Further,your policy should state that you encourage employees to make suggestions forreducing the amount of packaging while still protecting the product. Similarly, yourpolicy should encourage employees to make suggestions on when to use recycledmaterials in your packaging.© BLR®—Business & Legal Resources 30610800 19
  25. 25. Circulating Materials. To reduce the number of copies of an item, you may be able to circulate one copy among several people. Additionally, you may want to implement an e-mail, voicemail, or networking system to permit the routing of information without producing a hard copy. Confidentiality. If you have confidential documents, care should be taken to remind employees to discard those items properly. For example, you may require the items to be shredded before recycling. Recyclable Items. Your policy should identify what items are to be recycled. Will you recycle paper only? Newspapers? Aluminum cans? Plastics? Use of Recycled Material. Your policy can encourage use of items made from recycled materials.Your policy can also encourage the reuse of items before they are discarded. For example, copy paper printed on one side only can be recycled internally to make use of the blank back side (or even be made into scratch pads). Items Not to Be Recycled. Your policy should expressly describe any items that should not be placed in a container for recyclables. Otherwise, a few items that are not to be recycled can ruin the contents of an entire container. Cleaning. If plastic containers or aluminum cans are to be rinsed out before placement in a recycling bin, you should advise employees of this in your policy. Toxic Materials. Expressly identify any toxic materials that are not to be placed in the recycling bins. For example, if you recycle a variety of cans, but not paint cans or oil cans, your policy should expressly inform employees of these restric- tions. Similarly, if you recycle plastics, but not plastic containers for motor oil, your policy should so state. OSHA. There may be Occupational Safety and Health Administration (OSHA) reg- ulations regarding the disposal of certain workplace items, for example, needles in healthcare facilities. OSHA may also regulate storage of items in the workplace. Often, material safety data sheets will provide the needed information. Environmental Laws. Various federal and environmental laws regulate the dis- posal and recycling of materials, e.g., paint products, oil cans, tires, car batteries, or glass bottles. Recycling Laws. State or local laws may require certain businesses to recycle spe- cific items. Office buildings may be required to recycle soda cans. Further, several states and the District of Columbia have passed legislation requiring that newspa- pers sold in these areas contain prescribed amounts of newsprint produced from postconsumer newspapers. Color-Coding Containers. To make it easier for employees to readily identify which container to use for which items, you should consider color-coding the bins. Location of Bins. Location sites should be convenient for employees to recycle. At the same time, you should not have so many sites that it creates a burden to gather all the items. Signage. Not only should your signs identify what a particular recycling bin is to contain but it should also identify items not to be placed in the container. For example, your recycling bin for plastics ought to identify any item, such as plastic containers for motor oil, which are not to be placed in that recycling bin.20 Top 10 Best Practices in HR Management for 2012
  26. 26. Safety. When identifying items that you will recycle, you should consider potential safety problems. For example, you may decide not to recycle glass because of the risk of breakage that may lead to a serious cut. Pickup Times. You should determine the optimal time for the pickup of the recy- cled materials. For example, is one pickup a week sufficient? One pickup a month? Is morning, mid-afternoon, or some other time best? Inefficiencies in Recycling. Some manufacturers of copiers and printers warn against the use of recycled toner cartridges. Such manufacturers suggest that there can be some leakage of the material that may require the machine to be cleaned sooner than normal. Similarly, the use of the back side of a prior draft may cause your printer or copier to jam, resulting in inefficiencies or repairs. Charitable Donations. If you have items that have outlived their usefulness to your company but are still in working order, you may want to consider giving such items to a charitable organization that could use them.#6 Workplace Wellness In this age of skyrocketing healthcare costs, it isn’t surprising that wellness is a topic of discussion at home, in our schools, at all levels of government, and in the workplace. There is evidence that an effective workplace wellness program will result in a healthy return—both in terms of employee productivity and reduced healthcare costs. However, in order to realize this return, employers must make sure wellness pro- grams are well-focused and well-executed. In other words, wellness programs must target the health concerns of employees and their families. In addition, the com- pany must communicate with employees about the program and its benefits to make sure it is being used effectively. Workplace wellness program offerings may vary from simple things, such as dis- counts in membership fees at health clubs and in weight loss programs, to specific help with managing chronic diseases, such as high blood pressure and diabetes. As with any workplace program, employers must consider federal and state laws when setting up a workplace wellness program. What Is Wellness? The concept of wellness encompasses every aspect of our lives. In 1979, Dr. Bill Hettler, cofounder of the National Wellness Institute (http://www .nationalwellness.org), developed a model called The Six Dimensions of Wellness, which is generally accepted by the wellness community. The six dimensions are: N Physical—Bodily health through exercise, nutrition, and abstaining from harmful activities, such as smoking N Emotional—Emotional health through learning to recognize, express, and control feelings and moods © BLR®—Business & Legal Resources 30610800 21
  27. 27. N Intellectual—Mental health through developing creativity, learning ability, and problem-solving skills N Occupational—Job satisfaction through learning individual aptitudes and skills and finding meaning in work N Social—Community connections through learning the part we play in our interconnected world N Spiritual—Larger life questions through learning to choose and live by a set of values that give meaning to our lives Legal Issues Related to Workplace Wellness Programs Employers have a great deal of flexibility in designing wellness programs. However, it is a good idea to review any program with an attorney, and employers should work closely with insurance providers if the wellness program will offer financial incentives or benefits through group health plans. There are a number of laws to be aware of when developing and implementing these programs. Americans with Disabilities Act (ADA) The ADA requires employers to offer a reasonable accommodation to an employee with a known disability, and it prohibits employers from making medical inquiries or requiring medical examinations (unless job-related and consistent with business necessity). It is also unlawful under the ADA to take any adverse employment action based on an individual’s actual or perceived disability. The Equal Employment Opportunity Commission (EEOC) has offered employers some guidance on the ADA’s restrictions on medical inquiries and examinations. Under the guidelines, an employer may conduct medical examinations and activi- ties that are part of a voluntary wellness and health screening program. Therefore, offering employees the opportunity to voluntarily participate in health screening programs for high blood pressure and cholesterol monitoring is not likely to vio- late the ADA as long as there is no penalty (economic or otherwise) for not partici- pating. Employers must treat any information acquired as a confidential medical record. Health Insurance Portability and Accountability Act (HIPAA) DOL’s Employee Benefits Security Administration (EBSA), HHS, and the IRS pub- lished rules in 2006 that provide guidance in complying with the nondiscrimina- tion provisions of HIPAA. The rules also provide guidance on the implementation of wellness programs. HIPAA nondiscrimination provisions generally prohibit group health plans from charging similarly situated individuals different premiums or contributions or imposing different deductible, copayment, or other cost-sharing requirements based on a health factor. Health factors include health status, medical condition (including both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence), and disability.22 Top 10 Best Practices in HR Management for 2012
  28. 28. However, there is an exception that allows plans to offer wellness programs if theymeet certain criteria.Under the regulations, examples of wellness programs that comply with HIPAA’snondiscrimination requirements without having to satisfy any additional standards(assuming participation in the program is made available to all similarly situatedindividuals) include:N A program that reimburses all or part of the cost for memberships in a fitness center;N A diagnostic testing program that provides a reward for participation and does not base any part of the reward on outcomes;N A program that encourages preventive care through the waiver of the copayment or deductible requirement under a group health plan for the costs of, for example, prenatal care or well-baby visits;N A program that reimburses employees for the costs of smoking cessation programs without regard to whether the employee quits smoking; andN A program that provides a reward to employees for attending a monthly health education seminar.A wellness program that conditions a reward on an individual satisfying a standardrelated to a health factor must meet these five requirements:1. The total reward must be limited. Generally, it must not exceed 20 percent of the cost of employee-only coverage under the plan.2. The program must be reasonably designed to promote health and prevent disease.3. The program must give individuals eligible to participate the opportunity to qualify for the reward at least once per year.4. The reward must be available to all similarly situated individuals. The program must allow a reasonable alternative standard (or waiver of the initial standard) for obtaining the reward to any individual for whom satisfying the initial standard is medically inadvisable or unreasonably difficult due to a medical condition.5. The plan must disclose in all materials describing the terms of the program the availability of a reasonable alternative standard (or the possibility of a waiver of the initial standard).National Labor Relations ActEmployers who have negotiated a collective bargaining agreement with a unionare required by the NLRA to bargain over “wages, hours, and other terms and con-ditions of employment.”Therefore, a union may claim that a wellness program is aterm or condition of employment that mandates bargaining. Employers shouldalso check the governing collective bargaining agreement to see if a wellness pro-gram falls under a subject they have agreed to negotiate. For example, a bargainingagreement may mandate negotiation over the amount of employee-paid insurancepremiums, but not health insurance or other employee insurance benefits.© BLR®—Business & Legal Resources 30610800 23
  29. 29. Internal Revenue Code Depending on the incentives and benefits included in an employer’s wellness pro- gram, there may be tax consequences for the employer and the employee. For example, some employee incentives may constitute taxable income for employees. Generally, the value of an incentive is includible in the employee’s gross income (e.g., gift cards, memberships to off-site exercise facilities). However, there are some exceptions, including: N Free or subsidized access to a gym or athletic center that is operated by the employer and located on the employer’s premises, N Discount on employee contribution required to participate in employer- sponsored health plan, and N Contributions to an employee’s flexible spending account. In addition, a discount to an employee’s healthcare insurance offered as an incen- tive to employees who participate in a wellness program would probably not be considered taxable income for employees. Employers are well advised to obtain guidance from a tax professional as tax laws are complex and regulations can change frequently. State Laws that Protect Off-Duty Conduct Several states have laws protecting the off-duty conduct of employees. Some states, including Connecticut, Indiana, Kentucky, Louisiana, Maine, New Mexico, Nevada, New York, North Dakota, Oklahoma, Rhode Island, and the District of Columbia, have “Smokers’ Rights” laws that protect individuals from discrimination on the basis of the lawful use of tobacco products outside of the workplace. Other states, such as California, have broader coverage that includes any lawful activity occur- ring away from the employer’s premises during nonworking hours. When designing a wellness program, employers should review state laws prohibiting employment discrimination to be sure the program complies with state requirements. Once a program is in place, employers should take steps to ensure that employment decisions are not based on conduct that is protected by law. It is necessary to keep in mind that Employee Retirement Income Security Act (ERISA) may preempt state law when a wellness program is part of an employee benefit plan. However, ERISA will neither preempt state laws that have only a “tenuous, remote or peripheral connection” to employee benefit plans, nor will it preempt state insurance laws. If a wellness program is challenged based on a state law that pro- tects off-duty conduct, ERISA’s preemption clause may come into play—but it would depend on whether the program is part of an employee benefit plan within the meaning of ERISA’s preemption clause. A federal court decision demonstrates the difficulties that arise when a mandatory wellness program conflicts with an employee’s off-duty conduct (Rodrigues v. The Scotts Company LLC, No. 07-10104 (D. Mass. 2008)). In this case, the employer instituted a mandatory wellness program that included a tobacco-free policy prohibiting “smoking of tobacco products by its employees at any time and at any place, whether or not in the workplace or during work hours.” The applicable state law does not have a provision prohibiting discrimination against employees who use tobacco products. The employer used random testing24 Top 10 Best Practices in HR Management for 2012
  30. 30. of employees to enforce its policy. When it subsequently discharged an employeewho tested positive for nicotine, the employee filed a lawsuit based on variousclaims. Ultimately, the court ruled the former employee could pursue his lawsuitbased on his claims of invasion of privacy and a violation of ERISA, but not on hisclaim of wrongful termination or a violation of the state civil rights law.Note: Because state laws and regulations vary widely, employers should have theirwellness programs reviewed by an attorney familiar with applicable state laws,particularly if employee participation in a wellness program is mandatory.Best Practice: Suggestions for Wellness ProgramsIdeas that employers can use in their wellness programs are as varied as theemployees in an employer’s workforce. It may take some trial and error to find theones that create an enthusiastic response and achieve high levels of participation.Some successful programs have included one or more of the following:N Voluntary screening to check blood pressure, cholesterol levels, and other risk factorsN Personal finance education and counselingN Smoking cessation programN Financial incentives for voluntary participation in healthcare assessmentN Reduced copayments for drugs that treat asthma, diabetes, hypertension, and other chronic conditionsN Health insurance discounts for nonsmokersN Health insurance surcharges for smokersN Discounted gym membershipsN Partnering with local restaurants to provide healthy lunch optionsN Reimbursement for membership in Weight Watchers® or other weight management programsN Healthy food options in company cafeteria or vending machinesN On-site medical facility, fitness center, and pharmacy for employees’ useN No out-of-pocket cost to employee for preventive care, e.g., annual physical exam, well-child exams, mammogramsN Flu vaccinationsN Newsletters, e-mail notices, bulletin board postings, and other awareness strate- gies to increase participation in wellness initiativesBoth large and small employers can implement wellness programs that helpreduce the cost of health care and improve the health of employees. Carefulassessment of workforce needs, tailoring of programs to meet those needs, and acomprehensive health management strategy are all components that will help anemployer’s wellness program succeed.© BLR®—Business & Legal Resources 30610800 25
  31. 31. Best Practice: 13 Inexpensive Tips for Encouraging Wellness Program Participation Beyond the actual physical activities, most wellness programs need a little incen- tive to encourage participation and especially to keep people participating after the initial excitement has worn off. Here are some tips from the New York State Physical Activity Coalition: 1. Provide incentives like T-shirts, caps, aprons, or paid time off. 2. Hold contests or other fun worksite competitions: N “Wellness Project of the Month” N “Set Your Goal” competition N Employee/management and interdepartmental challenges N Health trivia game on computer with prizes to the winners 3. Announce and publicize a monthly health theme. 4. Conduct recognition activities for employees making efforts at healthier lifestyles: N Bulletin board announcements. N Personally signed letters from the CEO congratulating employees on their healthy behaviors. N Publicity for success stories or the healthy employee of the month. N Recognition for the coordinators of wellness activities. 5. Provide bulletin boards for health information exchange and for people to write milestones they have achieved in health (e.g., New Year’s resolution, miles walked, pounds lost). 6. Provide child care so that parents can participate in wellness activities. 7. Have the company health practitioner set a time (weekly, monthly) to check blood pressure, body fat, and weight. 8. Provide one-on-one counseling for high-risk employees and people with dis- abilities by establishing wellness mentoring programs. (Note: Take care with this one so you don’t run afoul of discrimination laws.) 9. Develop a team for brainstorming ideas and to help with wellness activities. 10. Conduct a survey to assess what topics employees want to pursue. 11. At all meetings: N Start with a stretch, and take a relaxation break in the middle. N Conduct a wellness activity. N Recognize an employee birthday or other special event. 12. Rotate departmental responsibility for wellness activities. 13. Utilize college interns to assist with developing and running wellness projects and events.26 Top 10 Best Practices in HR Management for 2012
  32. 32. #7 Classifying Employees Topic: Amendments to the Fair Labor Standards Act (FLSA) Recordkeeping Regulations DOL’s Wage and Hour Division (WHD) intends to update the FLSA recordkeeping requirements to foster openness and transparency, to increase awareness among workers, and to encourage greater compliance by employers. DOL is considering a proposed rule requiring covered employers to notify workers of their rights under the FLSA, and to provide information regarding hours worked and wage computa- tion. Any employers that seek to exclude workers from the FLSA’s coverage will be required to perform a classification analysis, disclose that analysis to the worker, and retain that analysis to give to WHD enforcement personnel who might request it. The proposal will also address burdens of proof when employers fail to comply with records and notice requirements. The current recordkeeping regulations require covered employers to keep speci- fied payroll records and other information but do not require that such informa- tion or other information regarding a worker’s employment or exemption status be disclosed to the worker. This is an issue of transparency and is critical to workers’ understanding of their legal rights and responsibilities. Employers covered by the FLSA are currently required to provide notice regarding the Act and to keep records on wages, hours, and other items, as specified in recordkeeping regulations established to ensure compliance with the various pro- visions of the Act. Most of the information required to be kept is of the kind employers generally would maintain in ordinary business practices. Required records generally include the employee’s name, address, date of birth (if under 19 years of age), hours worked per day and per week, regular rate of pay (non- overtime rate) when overtime is worked, amount of straight time earnings and overtime pay for each workweek, and deductions from or additions to pay. The regulations also specify the records an employer must keep in order to con- firm that particular exemptions from some of the FLSA’s requirements may apply. Employers must keep additional information on certain employees who are home- based or work under uncommon pay arrangements or to whom lodging or other facilities are furnished or other special requirements apply. Updating the recordkeeping requirements to promote transparency is expected to encourage greater levels of compliance by employers, to enhance awareness among workers of their status as employees or independent contractors and employee rights and entitlements to minimum wage and overtime pay, and to facil- itate DOL enforcement. IRS Voluntary Worker Classification Settlement Program The IRS Voluntary Classification Settlement Program (VCSP) will enable many employers to resolve past worker classification issues by voluntarily reclassifying © BLR®—Business & Legal Resources 30610800 27
  33. 33. their workers. The program is designed to increase tax compliance and reduce the burden for employers by providing greater certainty for employers, workers, and the government. Under the program, eligible employers can obtain relief from federal payroll taxes they may have owed in the past if they prospectively treat workers as employees. The VCSP is available to eligible businesses, tax-exempt organizations, and government entities that have erroneously treated their workers or a class or group of workers as nonemployees or independent contractors, and now want to correctly treat these workers as employees. To be eligible, an applicant must: N Consistently have treated the workers as nonemployees in the past, N Have filed all required Forms 1099 for the workers for the previous 3 years; and N Not currently be under audit by the IRS, DOL, or a state agency concerning the classification of these workers. Interested employers can apply for the program by filing an application for the VCSP Form 8952, at least 60 days before they want to begin treating the workers as , employees. Employers accepted into the program pay an amount effectively equaling just over 1 percent of the wages paid to the reclassified workers for the past year. No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years. Participating employers will, for the first 3 years under the program, be subject to a special 6-year statute of limitations, rather than the usual 3 years that generally apply to payroll taxes. Wage and Hour Investigations WHD is responsible for administering and enforcing a number of federal laws that set basic labor standards. If the employer is subject to these laws, the investigator will verify that workers are paid and employed properly according to the laws administered and that youths under the age of 18 are employed as provided by the child labor provisions. WHD does not require an investigator to previously announce the scheduling of an investigation, although in many instances, the investigator will advise an employer before opening the investigation. The investigator has sufficient latitude to initiate unannounced investigations in many cases in order to directly observe normal business operations and quickly develop factual information. An investiga- tor may also visit an employer to provide information about the application of, and compliance with, the labor laws administered by WHD. WHD does not typically disclose the reason for an investigation. Many are initiated by complaints. All complaints are confidential, so the name of the worker, the nature of the complaint, and whether a complaint exists may not be disclosed. In addition to complaints, WHD selects certain types of businesses or industries for investigation. WHD often targets low-wage industries because of high rates of violations or egre- gious violations, the employment of vulnerable workers, or rapid changes, such as growth or decline, in an industry. Occasionally, a number of businesses in a specific geographic area are examined. The objective of targeted investigations is to28 Top 10 Best Practices in HR Management for 2012