It’s Time to Plan for 2015 Benefits
It’s that “open enrollment” time of year, and for companies with 50 or more employees it’s also time to plan for the requirements that will start in 2015 and 2016 as the result of Health Care Reform.
As of January 1, 2015, employers with 100 or more full-time employees must provide health benefits to at least 70% of those employees (this increases to 95% starting in 2016) or be fined $2,000 annually for each full-time employee (except the first 30 employees). Employers with 50 – 99 employees have until January 1, 2016 before they have to comply with the requirement. Companies with fewer than 50 full-time employees are not affected by the requirement. A full-time employee is defined as someone who works at least 30 hours a week. However, it’s important to note that for the purposes of the Affordable Care Act, two people working half-time count as one full-time employee.
Companies with fewer than 50 employees who offer their employees health care coverage and contribute at least 50 per cent of employees’ premium costs may be eligible for tax credits. Find out more on the Covered California website.
Open enrollment is also a good time to think about additional, non-healthcare related benefits you might want to offer your employees. If you are planning to hire after the first of the year, a good benefits package can be a great recruiting tool. Here are some ideas:
- Direct deposit. Providing your employees with the option of having their check automatically deposited to their bank account saves them time and often results in additional perks from their bank for them.
- Credit union membership. There’s no cost to the company and many benefits to the employee.
- Amusement park/local attraction discounts. You can sign up at no charge as a company for employee discounts.
- Community hours. Offer your employees a certain number of paid hours off to spend in community service at their favorite charity or their child’s school.
- Wellness programs. Weight-loss challenges, group walks at lunch, activity-tracking competitions.
- Lunch & Learn events with guest speakers. For example, financial planners, estate planners, nutritionists, etc.
- “Green” initiatives. Ride your bike to work day, eWaste recycling, contests for the best “green” ideas.
- Service Awards. Recognize and reward employees with 5, 10, and 20 years of service.
- Paid membership for professional organizations related to the job.
Benefits over and above those required by law contribute to the company culture, show the employees you care, and help in attracting and retaining talent.
Strengthen Your Team through Community Service
Helping teams move successfully through the stages of team development – forming, storming, norming, performing – depends a lot on how well the team leader promotes effective communication, and provides opportunities for the team to bond. These opportunities are often presented in the form of team outings, “trust” exercises and group dinners. Why not do something different? Something that will not only help the team, but also help the community in which they work: a team volunteer event.
In addition to bringing the team closer together and helping those in need, team community service can develop the skills of individual team members. Put someone who is not in a leadership role in charge of the event. Put someone else in charge of communications. Build collaboration by letting the team research and decide on the organization they will help. These skills will then translate back to the job and result in a higher performing team.
Research shows that companies who give back to their communities have better brand visibility, more highly-engaged employees and stronger relationships with their customers. With more than 60% of employees reporting that they are not engaged at work, providing opportunities to contribute in meaningful ways as a team outside of work may help them view the organization with new eyes and enthusiasm.
Here are a few organizations that have a strong tradition of helping the local community, plus opportunities for both monetary contributions and volunteer work.
Second Harvest Food Bank needs help packing and sorting the food it collects and provides to people in need in the community. This makes a great team event. Your employees may also want to help with food distribution.
You can also help Second Harvest by volunteering for or participating in the annual Turkey Trot on Thanksgiving morning.
The Family Giving Tree offers several opportunities for group volunteering: Off-season product sorting; wish card sorting/collateral prep; and volunteering in the warehouse.
Save the Bay uses corporate volunteers to help in their restoration project of the San Francisco Bay.
The Silicon Valley chapter of the American Red Cross trains corporate groups to assist in disasters.
Additional group volunteer ideas are available at Volunteer San Jose.
“We make a living by what we get. We make a life by what we give.” – Winston Churchill
Performance Management is a Process, not Just an Event
For many companies, the annual performance review is the only time managers and their employees have meaningful conversations about what is working well and what isn’t. This creates fear and dread for the employee (How will I be rated? Will I get a raise?) and a burden for the manager (How do I evaluate 12 months of work? When will I find time to complete this form?).
Performance management should be a process, not just an event. In support of the annual evaluation there should be mini-reviews throughout the year. This helps both employees and managers track accomplishments and address areas for improvement in a more timely way. There should be “no surprises” during the annual review.
If you haven’t been managing performance throughout the year, Q4 is an excellent time to schedule a mini-review in preparation for formal reviews early next year. Revisit the employee goals set earlier this year and have an honest, interactive conversation with your employees about progress, challenges, improvement needed. Think of these reviews as development opportunities vs. “report cards.” Consider both the employee’s strengths and how to further develop them, and areas where the employee needs to improve in his or her current role, or to advance to the next level.
One area that is absolutely essential to address immediately is problem performance. Ignoring it will not make it go away, and left unchecked it can damage team morale, customer relationships and even the overall business. Here are some tips for dealing with problem performance.
Set expectations. Be sure each and every employee understands what is expected of them in their role and as a member of the team and larger organization.
Identify issues quickly. Be present with your employees. Have regular meetings and one-on-ones to learn challenges and issues. Seek to understand the root cause – training, capability, unwillingness?
Document. Performance issues may ultimately lead to termination. Avoid legal risk by thoroughly documenting and time stamping observed behaviors and specific examples of where the employee is not meeting expectations.
Address the issue. Discuss the problem with your employee. They may not realize it’s a problem until you tell them. Revisit expectations and consequences. Keep to the facts: Situation (what happened) Impact (negative consequences of situation) Expectation (what is expected by when). Treat this as a teachable moment with the goal being performance improvement.
Follow up. Constructive discipline begins with a verbal warning and progresses to a written warning if there is no improvement. Be very specific about expectations and timeline. Document, document, document.
If you need help developing a performance management process, please contact me.
Are You Following the Law for Meal Periods and Rest Breaks?
According to California law, hourly employees must be provided a meal period of no less than 30 minutes when the work period is more than five hours. The employee should be relieved of all work duty during the period. If, for a valid reason, the employee needs to be “on duty” during the meal period or may not leave the employer’s premises, the meal period is counted as time worked and must be paid at the employee’s regular rate of pay.
It is the employer’s obligation to relieve its employee of all duties, but the employer is not obligated to ensure that no work is done. The first meal period must be provided no later than the end of the fifth hour worked, and a second meal period no later than the end of the tenth hour worked, if applicable. With regard to rest breaks, employers must make a good faith effort to permit rest breaks in the middle of each work period. There should be one 10-minute rest break in the work period prior to the meal break, and one 10-minute rest break in the work period following the meal break. Ideally, in a traditional 8 hour work day, one break would occur in the morning and the second break would occur in the middle of the afternoon.
Although this law seems pretty straightforward, it is often violated. According to the Community Law Center at Santa Clara University, 1,051 Labor Commission judgments have been recorded in Santa Clara County Superior Court against companies for work break violations.
Recently, a San Diego Superior Court judge certified a class action lawsuit that would allow the attorneys of four former Apple retail store employees to represent nearly 21,000 current and former hourly retail and corporate employees for alleged work break violations occurring between 2007 and 2012.
Please check your policies, procedures and practices to ensure they are aligned with state mandated meal periods and rest breaks. Violations can be costly.
If you need help developing or updating your policy handbook, please contact me.
5 Best Practices for Managing HR Records
I would like to introduce you to my colleague, Peggy Milovina Meyer. Peggy is an expert in records management. Prior to starting her own business, she worked in a variety of roles at Hewlett Packard. Most recently, Peggy has been focusing on helping companies large and small set up systems to organize their paper and electronic records. As year-end approaches, it’s a great time to consider adopting an HR records management system for your business. In this guest blog, Peggy shares some of her best practices.
Companies today, regardless of number of employees, must comply with increasingly stricter employee records requirements. Throughout an employee’s time with a company, numerous documents are created – evaluations, benefit forms, job application, resume, confidentiality agreement, to name a few. It is easy to see how records management presents significant challenges to HR personnel. This article presents the top five generally-accepted best practices for effective management of HR records.
Policy
Don’t overlook the importance of a policy. A policy provides guidance to those responsible for handling records, taking any guesswork out of what needs to be done, to what, and when. A policy is an excellent education tool as well as being part of a sound foundation for risk avoidance and business process control.
Processes and Guidelines
Once a policy is in place, guidelines and processes that support its purpose should be documented. Guidelines are important for HR because they provide details not outlined in the policy regarding the many legal requirements governing how these records must be handled. For example, a policy may state that records must be stored with approved vendors, while the guidelines will list approved vendors and the approval process. Processes provide step-by-step instructions ensuring policies and guidelines are met. Documented processes allow businesses to monitor processes for effectiveness, and can contribute to operations cost reduction.
File Structure
Creating a file structure aids in ensuring records are organized, stored, and only accessed by authorized personnel. File structures should be simple, and set up to ensure similar records with the same access restrictions and retention periods are filed together. Even if records are related, those with different retention and access requirements should be filed separately to avoid inappropriate access or destruction.
Privacy and Security
Businesses bear the responsibility for managing risk for employee records, no matter the location or format of those records. HR records that contain private, sensitive data like social security number, date of birth, phone number, or address, require a rigorous and consistent approach to security and access controls. Business owners must be able to demonstrate employee records are adequately protected and can only be accessed by authorized personnel.
Education and Audit
Policy, guidelines and processes do no good if employees are not made aware of them and their own responsibility in complying with them. Creating an education plan that covers these topics is important to a successful records management program. Consider including this material in new employee orientation as well as in a recurring refresh for all employees.
No program will be effective without periodic checks to determine how well employees understand and follow processes. Performing annual audits and correcting issues promptly can be very effective in managing risk.
Combined, these best practices will help a business effectively manage their HR records, and can be used to accomplish the same in any other organization. For more information, please contact Peggy Milovina Meyer, Records and Information Management Solutions at peggymilovina@yahoo.com.
California Employers to be Required to Provide Paid Sick Leave
Governor Jerry Brown is expected to sign into law shortly a bill requiring California employers to provide paid sick leave for all employees except those covered by collective bargaining agreements that already include paid sick leave, and providers of home healthcare services. California is the second state to pass a sick leave law (Connecticut passed a similar law in 2011).
The law, which goes into effect July 1, 2015, applies to all employers, including government entities. Starting that date, employers will be required to allow employees – both full-time and part-time – to accrue paid sick leave at a rate of one hour for every 30 hours worked, to a maximum of 6 days per year for full time employees and 3 days per year for part-time employees.
Employees may use accrued sick leave beginning on the 90th day of their employment. Available sick leave may be used for the employee or a family member for care of an existing condition or preventative care.
The law also requires that employers:
- Display a poster with information regarding paid sick leave
- Notify employees in writing (e.g., on their paycheck) of the amount of sick leave available to them
- Maintain records for at least 3 years of hours worked, and paid sick leave accrued and taken by employees
Employers who unlawfully withhold paid sick leave from employees will be subject to penalties. Accrued but unused sick leave is not payable at the time of termination.
If you have an existing sick leave policy, review it prior to July 1, 2015, to ensure that it provides at least what will be mandated by the new law. If you do not have an existing policy, be sure you create one.
If you need help developing a new policy or haven’t reviewed your Employee Handbook recently, please contact me. Keeping your handbook up to date can prevent legal issues down the road.
The Final Paycheck – What You Can and Cannot Deduct
In my last blog we talked about the Termination Checklist and how it’s important to ensure there are no loose ends when an employee 
terminates voluntarily or is fired. It’s also important to know, when issuing the final paycheck, what you can and cannot deduct from it.
In California, an employer can only make deductions from an employee’s final paycheck that are:
- required under federal or California law, such as income taxes and social security tax
- authorized by the employee, such as premiums for a health or pension plan, or
- authorized by the terms of a collective bargaining agreement.
No other deductions are allowed. You may not deduct from an employee’s final check any amount still owed on a debt, even though the indebtedness is contained in a written agreement to pay the full amount of the debt on demand, at termination or otherwise.
Likewise, if you advanced an employee vacation and they quit or are terminated before the advanced vacation is earned back, you cannot deduct the amount from the employee’s final paycheck.
In both these cases you will have to pursue other avenues to recoup the amount owed.
Again, be sure that you issue the employee’s final check promptly. If the employee voluntarily terminates and gives at least 72 hours notice, you must issue the final paycheck on the employee’s last day of work. If you terminate an employee you must issue the final paycheck immediately upon termination.
Using a Termination Checklist is a Best Practice
There are a number of activities that need to be completed to ensure a smooth and legal transition when an employee leaves, either voluntarily or involuntarily. The best way to ensure that none of these activities gets overlooked is to incorporate a Termination Checklist as part of your standard termination procedures. This is especially important for involuntary terminations as an oversight or error may have serious legal ramifications.
If you are terminating an employee for performance issues, be sure you have written documentation describing the issue, the steps taken to resolve it, and the results. Even though California is an “at-will” state, detailed documentation is your best defense if a legal action transpires. When in doubt, speak with a California employment attorney.
Also, remember that for involuntary terminations you need to give the employee their final paycheck immediately upon termination. For voluntary terminations the due date for the final check depends on the amount of notice the employee gives. If the employee gives less than 72 “clock” hours notice, you have 72 hours from the time of notice to issue the final check. If an employee gives more than 72 hours notice, you must issue the final paycheck on the employee’s last day of work. Also, any outstanding expense reports must be paid on termination.
As part of your regular termination process be sure you also address the following items:
Benefits – related notices to provide (if applicable):
- COBRA benefits coverage information should be sent to the departing employee’s home address
- COBRA Notice to Plan Administrator of Cal-COBRA Notice to Carrier
- HIPPA Notice
- Health Insurance Premium (HIPP) Notices (California only)
- Stock Option Closing Statement
- 401(k) plan information should be sent to the departing employee’s home address
Other Items/Forms to provide:
- Copy of the Non-Disclosure/Confidentiality Agreement or Policy (Best Practice)
- Notice to Employee as to Change in Relationship (California only)
- EDD Form 2320 For Your Benefit
Examples of property to be collected:
- Building and desk keys
- ID/security badge
- Laptop, software, hardware, etc.
- Cell phones
- Company tools and equipment
- User ID/passwords (voicemail, computer)
- Files and other miscellaneous company-owned items
Also, remove the terminating employee’s access to email, the network, the company intranet and any other programs or proprietary information meant solely for the use of employees. Ask the employee to provide their most recent address and contact information (phone, email) for W-2s and any other follow up communications. Remind them to contact you in the event they move prior to year end.
You may also want to conduct an exit interview to learn more about the employee’s experience at your company.
Update on Local Ordinances and H-1B Cap Reached
If you are a San Francisco employer, here’s a reminder about some SF-specific ordinances that can be costly if you don’t comply.
Also, for those of you who look to foreign nationals to fill certain skill needs, the H1-B cap has been reached for this year. This year there were 172,500 H-1B petitions received and only 65,000 were selected, leaving 87,500 applicants who are no longer eligible for H-1B status this year. Contact your immigration attorney for options for those employees.
Paid Sick Leave
The San Francisco Paid Sick Leave Ordinance states that all employers must provide paid sick leave to each employee (including temporary and part-time employees) who performs work in San Francisco. Paid sick leave begins to accrue 90 calendar days after the employment start date. Employees are to accrue one hour of paid sick leave for every 30 hours worked.
Employers with fewer than 10 employees (including fulltime, part-time and temporary employees) must allow their employees to accrue up to 40 hours paid sick leave before capping it. Employers with 10 or more employees must allow up to 72 hours of accrued paid sick leave. An employee’s accrued paid sick leave carries over from year to year. The ordinance entitles employees to paid sick leave for their own medical care and to care for a family member.
Be sure you post the Paid Sick Leave Notice.
Healthcare Security
If you have 20 or more employees, or are a nonprofit with 50 or more employees, regardless of where those employees are located, you are required to make a minimum level of expenditure toward healthcare for covered employees. Covered employees are those who have worked for you for more than 90 calendar days, and work at least 8 hours per week in San Francisco.
In addition, you must maintain records sufficient to demonstrate compliance with the requirement; post a Health Care Security Ordinance Notice in all workplaces with covered employees; and submit an annual reporting form by April 30th each year.
Family Friendly Workplace
San Francisco’s Family Friendly Workplace Ordinance went into effect January 1, 2014. Under this ordinance, employers with 20 or more employees must allow covered employees to request a flexible or predictable work schedule to allow them to assist with care giving responsibilities for:
- Their child or children under the age of 18
- A family member with a serious health condition
- Their parent, age 65 or older
Be sure to post the required Notice.
HR Law Changes and Updates
I recently attended a couple of legal seminars and I wanted to take this opportunity to bring you up to date on some employment law changes and updates that are important for business owners.
Paid Family Leave (PFL)
SB 770, which went into effect July 1, 2014, expands Paid Family Leave to cover time off to care for a seriously ill grandparent, grandchild, sibling or parent-in-law. Previously, PFL was available only to employees who take time off to care for a seriously ill child, spouse, parent, or domestic partner; or to bond with a minor child within one year of birth or placement related to foster care or adoption.
LGBT Discrimination
Twenty-two states, including California, have passed state laws prohibiting discrimination on the basis of sexual orientation. California is one of the 19 of those states that also ban gender identity discrimination. Recent reports indicate that President Barack Obama will soon sign an executive order banning federal government contractors from discriminating against lesbian, gay, bi-sexual and transgender (LGBT) employees and job applicants.
Age Discrimination
Discrimination, whether overt or suggested, can be costly. An example is the case of Nickel v. Staples. Bobby Dean Nickel, 64, and a 9-year employee with good reviews, alleged that managers stated they needed to “get rid of” older, higher paid workers. When he refused to resign voluntarily, he underwent a series of false accusations and increasing levels of harassment, including being called an “old coot” and “old goat” in meetings. In the trial earlier this year, the jury found in Nickels favor, awarding him $26 million, including more than $22 million in punitive damages.
Disability Accommodation
In May, in EEOC v. Ford Motor Co. the court held that the American Disabilities Act (ADA) may require an employer to permit telecommuting as a “reasonable accommodation” for a disabled employee, even if “attendance” is an essential job function. The case involved an employee with irritable bowel syndrome who had asked to telecommute several days a week as part of her “reasonable accommodation.”
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