BREAKING: Health Care Bill Moves to Debate on Senate Floor with 51-50 vote

In case you haven't heard, the motion to debate a version of the Health Care Bill after multiple renditions that has been dragging it's way through congress and stalled in the Senate has just been successfully passed with a narrow vote of 51-50 in favor with Vice President Pence casting the tie-breaking vote . The bill has a long road ahead and likely a vast number of revisions.

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Source: Wall Street Journal, Daniel Nasaw,Michelle Hackman

Access Live Updates on the Motion Here:

Moments ago:

Vice President Mike Pence just broke the 50-50 tie. The motion to proceed passes and the Senate will now begin debate on a bill to repeal and replace the Affordable Care Act.

With the motion passed, Senators will now proceed to 20 hours of debate on several proposals repealing parts of the 2010 Affordable Care Act, including their replacement package and a separate bill repealing the law with a two-year delay.

They are expected to debate numerous amendments – not counted toward the 20 hours – including proposals put forward by Democrats....




4 keys to picking the right benefits admin system

Original Post by

By: Jared Bilski

With HR departments at small companies stretched so thin (many times one staffer handles all of HR), it’s no surprise many small companies are using benefits administration systems for their needs. But with new software vendors popping up every day, how do HR pros find the right system?  

At the Dig|Benefits Conference in Austin, TX, Joshua N. Jeffries, a partner with Arkin Youngentob Associates, LLC, outlined the four most important steps small employers should take when selecting an “efficient, cost-effective” benefits administration system:

Selection checklist

Step 1: Define your needs. What are you looking for in a benefits administration system? This step needs to go beyond HR and incorporate all departments within the company. Jeffries reminded HR pros that Benefits has one of the top Profit/Loss (P/L) line items for most businesses. Any soft-dollar spending in this area needs to be justified in your compensation plans.

Step 2: Evaluate your vendor. With the sheer number of vendors out there, this step can seem a bit daunting. But the process is much less intimidating when HR pros break it down into small questions.

Examples: What type of back-end customer support do I need? Is it broker-friendly — in other words, will most brokers be able to use the system easily and effectively? Does the system account for all ACA and other federal and state regs? Does the system offer a mobile component? Does the data make it home? If the system is giving employees easy access to their benefits, it should offer a mobile component for spouses and dependents. After all, most families use smartphones for virtually everything.

Step 3: Understand the implementation process. Obviously, you’ll want the system to be as accurate as possible, so you’ll want to do your homework and find out any vendors with less-than-stellar track records in this area. You’ll also want to find out if the system updates automatically or if that’s a separate undertaking.

Step 4: Change your culture. For many employees, any type of change is difficult. If your benefits administration system alters the way people are used to doing things, which it most likely will, you have to account for that — and find ways to make sure the new system can positively impact your company’s culture. Here, Jeffries lauded the use of employee committees as a means to educate staffers on how everything works and all that workers can get from a new system.

Based onPlatform Power — Solving Ben Admin For Small Businesses,” by Joshua N. Jeffries, as presented at the Dig|Benefits Conference in Austin, TX.

9 Tips for Closing the Gender Pay Gap

Original Post from

By: Jonathan A. Segal

Everyone knows there is a gender gap in how employees are paid, though estimates vary as to how large it is. But compensation inequity of any size does more than expose an organization to litigation; it can cause disengagement and lower productivity, which can translate into lower profits.

It can also push talented employees out the door in search of greener pastures (and higher paychecks). In fact, often the smartest and most marketable employees are the first to leave. Bottom line: The gender gap is everyone’s problem.

So let’s begin with the assumption that your organization is smart and wants to eliminate this business inhibitor and legal wrong. What do you do?

1. Lawyer Up on Data Collection

Sometimes HR professionals will collect data to demonstrate that a problem exists. I understand why, but this can be dangerous.

The information likely will be discoverable, and your good-faith efforts could be used against you. If you need data to break through denial at your company, you may want to work with your employment lawyer to collect it under attorney-client privilege. Then have it delivered in the form of legal advice.

Even then, the underlying data may not be privileged if, for example, it is gathered from existing nonprivileged documents and information. However, data compilation and analysis done by—or at the direction of—counsel might still be protected from disclosure by the attorney-client privilege and/or the work product doctrine.

The bottom line is that the scope of the attorney-client privilege is deceptively complex, so give careful and thoughtful consideration to how you work with your employer’s lawyer to maximize the likelihood that the privilege will apply.

One thing is clear: Simply copying your employer’s attorney on an e-mail does not make the information within the e-mail privileged; it simply makes the attorney a witness to it.

2. Analyze Positions Qualitatively

Once you’ve documented pay gaps, don’t automatically assume they are all attributable to gender.

There may be totally legitimate business reasons for wage differences. For example, someone who took four years off to have and raise a child might earn less than someone who did not spend time away from work and who has received regular raises over that time span.

So, while quantitative data provides a starting point, a qualitative assessment of the relevant factors at play—one that ideally is also done under attorney-client privilege—is needed to determine if changes are in order.

3. Allow Negotiation …

Ellen Pao, former CEO of Reddit, tried to ban salary negotiations at her company based on the theory that allowing such bargaining inherently benefited men. Let me count the reasons I disagree with this tactic. Actually, I’ll stop at three:

First, it reinforces the stereotype that women aren’t capable negotiators.

Second, it takes away a woman’s (or a man’s) power to play a role in determining her (or his) own pay.

Third, whether and how someone negotiates may be relevant to whether you hire them. It is better than a behavioral question—it is a behavioral simulation.

4. … But Reconsider Asking About Salary History

When we ask about prior salary, we may be unwittingly perpetuating the gender gap created by prior employers. If someone was paid too little at her previous employer, the low part of your range may result in a material increase in compensation but still be less than the candidate deserves.

Consider eliminating the salary history question from your applications. After all, what does prior compensation really have to do with what someone should earn for a new opportunity? Ask only if it is truly relevant to the job—and document why you believe it is.

5. Create Pay Ranges But Recognize Exceptions

Establish pay ranges for positions to maximize consistency, and develop criteria for how you will place a new hire or promotion in the range.

But also realize that there will be times when exceptions are necessary. Develop a procedure to determine when and why you should depart from the norm, and conduct periodic audits to make sure that exceptions are not made only for men.

6. Consider Access Issues

Pay is often linked to performance. At certain levels, I think that works (at least to some degree). But I firmly believe that you cannot perform as well as your peers if you don’t have access to the same opportunities that they do. In my view, this is where many employers miss the mark, big time.

I hate unnecessary bureaucracy as much as anyone, but if there is no structure as to how work is distributed, the plum assignments too often may go to someone “just like” the manager. While slights like this are not intentional, they are often very real. Are the highly desired assignments typically meted out among the guys while playing golf or drinking at the neighborhood watering hole? If so, the boys’ club may be rearing its ugly head in a way that perpetuates the access gap and, with that, the gender gap.

Access to key assignments, customers, clients and information is essential to successful performance and the resulting link to higher pay. Of course, managers must have some discretion, but there should also be guardrails in place so that access issues don’t translate into unequal opportunity.

7. Appraise Performance Appraisals

Gender bias is often evident in performance appraisals, which are linked to pay. Two examples:

  • A man is refreshingly assertive, while a woman engaging in the same behavior is labeled with the scarlet “B.”
  • Or, a new twist on the double standard: A woman and a man are both involved in equally unacceptable behavior, but he is described as having engaged in “abrasive conduct,” while she is simply labeled “abrasive.” It’s a subtle but important difference—between a behavior that can be changed and a fixed character trait.

Train your leaders on these and other potential biases.

8. Be Aware of Persistent Biases and Their Effects

Yes, some of what an employee is paid is a result of his or her ability to negotiate. So workers have a major role to play, too: An employee should not complain with impunity about making less than others if he or she did not ask for more or apologizes for having done so.

Unfortunately, ambition is not always viewed as laudably in a woman as it is in a man. Sheryl Sandberg makes that point in Lean In: Women, Work, and the Will to Lead (Knopf, 2013) multiple times. Here is the sad but persistent reality: A woman may have to decide between conforming to the societally accepted stereotype of being nice (and making less money) or being liked less because she asks for what she has earned.

9. Train Your Leaders

Of course, a woman who leans in should not have to choose between being well-liked or well-paid, so educate your leaders about the unconscious biases that can come into play in cases where women negotiate no differently from men. Once people are made aware of their own prejudice, they are less likely to unconsciously engage in it.

Inevitably, some folks on the leadership team will deny that the bias exists at all because they have not personally experienced it. Let me conclude by saying this: I have never experienced labor pains. But I would be foolish to deny their existence based just on my life experience. You can take the analogy from there.

Jonathan A. Segal is a partner at Duane Morris in Philadelphia and New York City. Follow him on Twitter @Jonathan_HR_Law.

Bridging the Gap: What HR Managers Wish Their Front Line Mangers Knew About Effective Leadership

Original Post from

By: Paul Falcone

John is a successful manager, but he’s concerned about potential staff turnover in light of today’s hot job market. He’s wondering what he could do to proactively avoid employee resignations and is taking an objective, introspective look at his leadership style. So John reaches out to the vice president of human resources at his company for advice, and learns a lot more than he bargained for.

As John soon realizes, retention of key employees comes from both leadership offense and defense practices. More importantly, it stems from exercising leadership wisdom that allows team members to motivate themselves, find new and creative ways of solving problems and finding solutions, and, when necessary, removing roadblocks that may impede team growth. Minimizing the effects of unwanted turnover and building a team with solid tenure comes from each leader’s ability to foster motivation in teams and instill a strong sense of accountability. Therefore, as unnerving as it sounds, John realizes that he needs to reassess his own strengths and shortcomings in order to reinvent his relationship with his team.

Leadership Offense

Getting all your company’s managers on the same page in terms of motivation, employee satisfaction and engagement is no easy feat.

“But first get one thing straight:  Your job as a leader is not to motivate your employees; motivation is internal, and you can’t motivate them any more than they can motivate you,” said Jo-Anne Smith, outplacement executive, career coach and equity owner with Career Partners International in Southern California. “Your job as a successful leader, however, is to create an environment where your workers can motivate themselves.”

It may sound like a fine distinction, but it’s an important one. For example, try delegating what you enjoy most and are particularly good at as a means of professional development for the employee taking on the task (not of offloading work). Monitor what you’ve delegated by asking your employee how she’ll follow up with you and what the concrete and measurable outcomes will be throughout the delegation exercise. Then be sure to celebrate successes along the way.

Further, conduct “stay interviews” by asking your top performers what motivates them, what suggestions they have for improving the work flow and how you can help them prepare for their next career move.

“This is your chance to recognize and acknowledge their contributions, and employees will always feel engaged and excited when they’re making a positive difference at work while building their resumes,” Smith said. After all, top performers will always be resume builders, and learning is the glue that binds an individual to a company, despite offers from headhunters or competitor organizations. You’re always better off conducting proactive stay interviews rather than needing to make reactive counteroffers once a top performer has tendered notice.

While stay interviews are a smart longer-term strategy, you may have a turnover crisis that’s suddenly thrust upon you, and under certain circumstances, extending a counteroffer may make sense. Just make sure that if you’re going to make such an offer, you do it the right way.

According to Smith, “Counteroffers should always remain the exception, not the rule, because of their potential to backfire. After all, most employees [think], ’Why should it take my resigning to trigger a salary increase or promotion?’ ”

But if your strategy is to openly address what’s been plaguing the individual beyond money and identify ways where you can help the individual reconnect and regain a sense of value, the counteroffer may make sense.

Invite the individual to consider a counteroffer like this: “Even though I can’t promise anything at this point, I hope that you’ll allow us to explore some new avenues with you. If we can’t develop an overall career development strategy and growth trajectory that would motivate you to remain with us, then we’ll certainly support your transition to the new company. But we want to keep you, Sarah, and we appreciate your contributions every day. Would you be willing to engage in those kinds of discussions with us?”

Leadership Defense

One key reason for employee dissatisfaction that drives top performers to pursue greener pastures is a perception of unfairness or a leader’s inability to hold everyone accountable to the same performance standards.

John realizes he needs to develop some critical muscle around addressing subpar performance and certain poor behaviors that have calcified in his team over time. The wise vice president of HR counsels him, however, that suddenly addressing substandard performance and conduct issues can shock employees and potentially open up the organization and John personally to employment-related liability. Therefore, in a spirit of full transparency, John will announce to his team that he’s committed to reinventing himself as a leader in this critical area of accountability and setting high and consistent expectations for everyone.

Taking precautions to avoid litigation land mines protects the individual supervisor and the organization as a whole.

“While 1 in 4 managers will likely be involved in employment-related litigation at some point in his or her career, it’s important that leaders like John remain aware of potential pitfalls that might blindside an otherwise unsuspecting supervisor,” said Sharon Bauman, partner in the employment and labor practice group at Manatt, Phelps & Phillips LLP in San Francisco.

Employees are very sophisticated consumers and often realize that the best way to protect themselves from managers’ complaints about their individual performance is to strike first by filing complaints about their supervisors’ conduct. John learns from the vice president of HR why he should run, not walk, to HR when he needs a partner to address a subordinate’s subpar performance or inappropriate workplace conduct. Leadership is a team sport, and it’s shortsighted to think that he can do it all on his own.

After all, whoever gets to HR first triggers the investigation—either focusing on John’s subordinate’s performance problems (if John gets to HR first) or on allegations regarding his conduct as a supervisor (if the employee gets to HR first). That’s when terms like “hostile work environment,” “harassment” and “retaliation” come into play.

John’s lesson? Don’t allow employees to engage in the pre-emptive strike of “pretaliation” by lodging complaints about him before he has a chance to speak with HR about problems that certain staff members may be causing.

Next, John is advised to avoid the biggest problem facing corporate executives today: grade inflation on the annual performance review. Too many unsuspecting managers take staffers through the progressive discipline process all the way to the final written warning stage, only to issue a “meets expectations” overall score on the annual performance evaluation. John now understands that by doing this, he’ll end up creating a major roadblock if the company wants to terminate the employee in the future.  After all, by giving a “meets expectations” rating, he’ll have validated an entire year’s performance despite the final written warning on file.

In short, it is John’s responsibility to demonstrate consistency between a subordinate’s corrective action history and overall performance review score. When these documents contradict one another, the company will likely have to continue with the documentation process in order to clarify the record. When both are in alignment, the company should have the discretion to terminate the employee upon a clean final incident.

John’s final lesson from the meeting with the vice president of HR: From a practical standpoint, you can’t just terminate, lay off or “give a package” to someone who’s not fitting in or otherwise contributing to your team’s overall success.

“The employment-at-will defense will not guarantee a summary judgment of a wrongful termination claim at the hearing stage, so you’ve always got to assume that a case will make it all the way to the trial stage, and that the jury will be looking for a really good reason to justify the termination decision,” Bauman said. Therefore, John recommits to engaging in those challenging but necessary conversations and to documenting his findings in the form of progressive discipline to reduce or eliminate the possibility of the claim coming back to bite him and his company in litigation. Bauman advises, “Remember, it’s not just the potential dollar cost of being sued; it’s the time and disruption of interrogatories, depositions, hearings, mediations and potentially trials that will zap your team’s energy for six months to a year—or more—after the termination that are the biggest challenges you face.”

As a leader, you can give your company no greater gift than a motivated, energized and engaged workforce. Spikes in turnover may happen from time to time, but what’s critical is your response, the counsel you seek and your willingness to reinvent yourself so that everyone benefits from the crisis. Follow these offensive and defensive leadership practices not only to cultivate your own leadership capabilities but also to foster an environment where motivation, engagement and satisfaction become the hallmarks of your shop. That’s the greatest workplace wisdom of all.

Paul Falcone ( is an HR executive in San Diego and has held senior leadership roles with Paramount Pictures, Nickelodeon and Time Warner. A long-time contributor to HR Magazine, he’s also the author of a number of SHRM best-sellers, including 96 Great Interview Questions to Ask Before You Hire (Amacom, 2008), 101 Sample Write-Ups for Documenting Employee Performance Problems (Amacom, 2010), 101 Tough Conversations to Have with Employees, and 2600 Phrases for Effective Performance Reviews (Amacom, 2005). His newest book, 75 Ways for Managers to Hire, Develop, and Keep Great Employees (Amacom, 2016), will be released this month. 


IRS Reporting: Now What?

Original Post from

By: Danielle Capilla, Chief Compliance Officer at United Benefit Advisors

Applicable large employers and self-funded employers of all sizes have now completed the first round of required IRS reporting under the Patient Protection and Affordable Care Act (ACA). The ACA requires individuals to have health insurance, while applicable large employers (ALEs) are required to offer health benefits to their full-time employees.In order for the IRS to verify that (1) individuals have the required minimum essential coverage, (2) individuals who request premium tax credits are entitled to them, and (3) ALEs are meeting their shared responsibility (play or pay) obligations, employers with 50 or more full-time or full-time equivalent employees and insurers were required to report on the health coverage they offered. Similarly, insurers and employers with less than 50 full time employees but that have a self- funded plan also have reporting obligations. All of this reporting is done on IRS Forms 1094-B, 1095-B, 1094-C and 1095-C.

Now that the first set of forms has been completed, many employers are wondering what the next steps are. Employers that did not fulfill all of their obligations under the employer shared responsibility provision (play or pay) might owe a penalty to the IRS. A penalty will be owed in regard to the 2015 plan year if:

  • The employer does not offer health coverage or offers coverage to fewer than 70 percent of its full-time employees and the dependents of those employees, and at least one of the full-time employees receives a premium tax credit to help pay for coverage on a Marketplace; or
  • The employer offers health coverage to all or at least 70 percent of its full-time employees, but at least one full-time employee receives a premium tax credit to help pay for coverage on a Marketplace, which may occur because the employer did not offer coverage to that employee or because the coverage the employer offered that employee was either unaffordable to the employee or did not provide minimum value.

As of March 2016, the only information from the IRS on the payment of these penalties is as follows:

The IRS will adopt procedures that ensure employers receive certification that one or more employees have received a premium tax credit. The IRS will contact employers to inform them of their potential liability and provide them an opportunity to respond before any liability is assessed or notice and demand for payment is made. The contact for a given calendar year will not occur until after the due date for employees to file individual tax returns for that year claiming premium tax credits and after the due date for applicable large employers to file the information returns identifying their full-time employees and describing the coverage that was offered (if any).

If it is determined that an employer is liable for an Employer Shared Responsibility payment after the employer has responded to the initial IRS contact, the IRS will send a notice and demand for payment. That notice will instruct the employer on how to make the payment. Employers will not be required to include the Employer Shared Responsibility payment on any tax return that they file.

Employers will be notified if an employee who either was not offered coverage, or who was not offered affordable, minimum value, or minimum essential coverage, goes to the Exchange and gets a subsidy or “advance premium tax credit.” To understand this “Employer Notice Program” the appeals process, and how affordability must be documented, request UBA’s newest ACA Advisor, “IRS reporting Now What?”

Health Care Consumerism Is More Than A Benefit Design

Original Post from

By: Steven Auerbach

The shift to health care consumerism is well underway. Trends continue to point to increased financial responsibility for consumers with rising deductibles, increased consumer out-of-pocket responsibilities, and accelerated adoption of consumer-directed health care plans (CDHPs), health savings accounts (HSAs), and other account-based benefit offerings.

According to Mercer, enrollment in CDHPs among large employers nearly doubled in the past three years from 15 percent to 28 percent of covered employees.

Employer adoption of these consumer-directed benefit designs will continue to grow for the foreseeable future, driven by the need for cost control, the impact of health care reform and the looming excise tax. The costs of providing health care continue to rise, surpassing $25,000 for an average family for the first time in 2016 (Milliman Medical Index).

However, the fact that the term “consumer-directed health care (CDH)” has become almost synonymous with CDHPs and HSAs is a bit of a misnomer. In reality, CDH is much more than a benefit design – it is a paradigm shift for how consumers must manage their health care and make health care decisions going forward.

Dimensions of consumer-directed health care  

The underlying premise of CDH is that, if given more financial responsibility for health care and empowered to make informed decisions, consumers will make better choices – leading to improved health outcomes and decreased overall health care costs. Implicit in this definition are two equally important dimensions:

  1. Benefit designs that require increased consumer financial accountability
  2. Empowerment and engagement to support decision-making

The market has made considerable progress shifting to benefit models that increase consumer financial responsibility, as evidenced by the data above. While new plan designs have been created and successfully implemented, financial accountability is only the beginning— behavior must change too, not just costs. We have only just begun to unlock the second dimension of health care consumerism.

Giving somebody new responsibility without the education, tools and support to manage those responsibilities is like giving a teenager the keys to the car without teaching them to drive.

Unlocking consumer engagement

So where does the health care industry really stand in terms of engaging and empowering consumers to make better choices?  The health care industry is still struggling to drive meaningful consumer engagement.

Consumer fluency is low. Alegeus research is clear that consumers still don’t have a good grasp on how the plans work, how to predict and manage out of pocket costs, how to determine coverage, etc.  Engagement overall is low. The average consumer interacts with their health plan just one or two times per year – and more than 40 percent of members have never taken the time to log-on, dial-in, subscribe, or download any content from their benefit providers.

And in many cases, consumers are resistant to change. When asked whether they wanted to take a more active role in managing their health care, 50 percent said no thanks.

Employers are now spending nearly $700 per employee on various employee engagement programs related to health care, per Fidelity. There are more tools and resources than ever before. Yet most of these programs are delivered with a “one-size-fits-all” approach, and the consumer experience is still very fragmented.

However, by its very nature, CDH may be the key to unlocking consumer engagement. CDHP members are significantly more engaged than their counterparts in traditional coverage for one very important reason…

People pay attention to their money

According to our research, people enrolled in CDHPs scored universally higher on all measures of engagement.  CDHP members:

  • Are considerably more fluent in the details of health care coverage, costs and billing
  • Are more value-conscious - 50 percent more likely to research and compare costs for health care purchases
  • Interact more frequently– the average CDHP member interacts with their account 10-50 times per year
  • Leverage available resources & channels - one-third more likely to consume content and engage with their benefit service providers through available channels
  • Are more likely to participate - twice as likely to participate in employer engagement and wellness programs

Although CDHP members interact more frequently, the key to true engagement and behavior change is not just driving more interactions, it is driving strategic engagement that is targeted, timely and relevant.

Health & wealth must converge

The path to true, meaningful engagement in health care may lie in the convergence of these financial components with the traditional health care domain.  No matter what age, health status, or consumer segment, the responsibility for managing finances and costs will become universal.

The convergence of claims, financial transactions and other behavioral and demographic data will provide a robust foundation for targeted engagement.

The fact that consumers pay closer attention to their finances presents a unique opportunity to tap into a captive audience with personalized offers, messages and value-added tools designed to improve engagement, influence behavior and enhance decision-making.

For the vision of consumer-directed health care to be fully realized, it is imperative that employers and benefit providers do not overlook the critical importance of education and targeted engagement to empower better decision making – and better outcomes for all stakeholders.

4 Ways Benefits Administrations Can Stop Cyberattacks

Original Post from

By: Tom Pohl

There are reports of data breaches in the news every week, impacting a range of organizations and industries. These cyberattacks are costing businesses, both large and small, a great deal to resolve — from financial expenses to IT and legal resources to reputation recovery efforts.

According to a new study by the Ponemon Institute, data breaches are costing the health care industry $6.2 billion annually. Nearly 90 percent of health care organizations were victims of a breach in the last two years, raising concern for patients, employees, and others involved in the health care system.

Today, the leading cause of health care data breaches are targeted criminal attacks that seek to place valuable personal information into the hands of malicious actors. The personal information given out to health care organizations can be some of the most valuable to cybercriminals. For example, when enrolling in benefits, the information submitted can include patient names, family history, Social Security numbers, and billing information.

It’s important to also note that not all breaches are malicious. Human error is often a cause of breaches, asCompTia’s International Trends in Cybersecurity report found the 58 percent of security breaches are typically due to human error.

So what can benefits administration technology providers do to keep sensitive data secure from human error and malicious threats?

Conduct extensive user testing on your security systems

Implementing user testing through a third party vendor allows benefits administration technology providers to discover gaps or holes in their security systems. This can be done via a user testing group, which is comprised of individuals trained to discover the predominant methods that cybercriminals would abuse to compromise web-based applications.

The group is given a platform with authorized access and fake scenarios, all set up to act as if the system was running as usual. As these experts go into the system and know what areas to try and hack, the organization is able to develop plans to combat or repair these issues. User testing is similar to proofreading a paper; getting a second set of eyes on a program allows companies to see the full risks of its security system.

Educate employees on cyberthreats

As data breaches become a daily concern for IT departments, educating employees on the risks and dangers of cyberattacks becomes even more of a priority. Benefits administration technology providers need to prioritize educational resources and programs to teach employees how to spot potential cyberattacks, especially as they are handling their customers’ private information.

An effective and simple way to train employees on how to spot strange activity can be done via an email phishing awareness campaign. This involves delivering emails to employees with mocked up links or downloadable materials that, if real, would have the potential to open users’ accounts up to cyberattacks. Organizations should also consistently remind its employees to report any suspicious activity and to change their passwords regularly for a more secure system.

Automate processes to reduce the risk of human error

Recently, Google was in the news for a suffered data breach via its benefits provider. Yet the reason for this incident was human error, in which an email sender accidentally sent a document to the wrong contact. Fortunately for Google, the damage was limited, but human error is not always so forgiving.

With automation, benefits administration technology providers have the ability to decrease the chances of sensitive information getting into the wrong hands. This can be done by sending dummy files before sending the actual files to contacts. Another option is to implement triggers on email accounts when certain information is involved. For example, if a file is attached to the email, prompt the sender to confirm it is the correct file before sending. Implementing automation is a key factor in combatting human errors that could increase the risk of a cyberattack, especially when it comes to personal data.

Beware of the insider threat

While public perception is that these attacks result solely from the actions of malicious hackers outside of an organization, insider threats are a growing and serious concern. Vormetric’s 2015 Insider Threat Report reveals that over 90 percent of U.S. organizations believe they are vulnerable to insider threats such as stolen passwords or email spam. In fact, the National Association of Manufacturers released a statement in April 2016 stating the theft of trade secrets has cost businesses $250 billion per year.

Benefits administration technology may want to go a step further to ensure employees are operating in the correct space. Requiring background checks and limiting access to sensitive data will provide an extra level of security for patient, employee, and others’ personal information.

OFCCP Updates Sex Discrimination Rule

From the Department of Labor.

On June 14, 2016, the Office of Federal Contract Compliance Programs (OFCCP) announced publication of a Final Rule in the Federal Register that sets forth the requirements that covered contractors must meet under the provisions of Executive Order 11246 prohibiting sex discrimination in employment. This Final Rule updates sex discrimination guidelines from 1970 with new regulations that align with current law and address the realities of today’s workplaces. The Final Rule deals with a variety of sex–based barriers to equal employment and fair pay, including compensation discrimination, sexual harassment, hostile work environments, failure to provide workplace accommodations for pregnant workers, and gender identity and family caregiving discrimination.
The Final Rule becomes effective on August 15, 2016.

Read the final rule.

Wellness Programs Benefit Employers, Employees

Original post

Offering employee wellness programs isn’t just an exercise in altruism for employers. It pays off where most companies would value it most: the bottom line.

According to Forbes, companies are jumping on the wellness program bandwagon right and left, to varying degrees. In fact, Society for Human Resource Management statistics indicate that in 2015, 80 percent of employers offered preventive wellness resources and educational information, with 70 percent providing full strategic wellness programs.

But while companies are happy that such programs pay off in healthier employees — 59 percent of employers offering such programs believe they’ve resulted in improved worker health — those programs also pay off in ways that have more to do with the balance sheet than the scales.

The cost of wellness programs is nothing to be sneezed at, but on the other hand, employees involved in them often shift their diets to healthier foods, quit smoking, have a better mental outlook on life, and watch the pounds come off through diet and exercise. That means they’re less likely to have to take so much advantage of company-provided health plans, if they’re reducing or eliminating some of the risk factors that could send them to the doctor more often.

Healthy employees might exercise more and weigh less, but they’re also more engaged, and thus more productive. Better health can also keep them on the job longer, with better results and better job satisfaction. They’re less stressed, miss fewer days at work and don’t look for a new job as often; all those things add up to an 8 percent improvement in productivity.

All of that can translate, for most programs, to dollars and cents: a return on investment of approximately 3:1. It can, however, go as high as 6:1, thanks to reduced health care costs that result when workers are eating better, exercising more, and forestalling some of the conditions that can result in mega health care bills — and equally mega premiums.

DOL Overtime Rule Will Impact Hospitality Industry

Originally Posted by

By: Allen Smith

The hospitality industry will be hit hard by the Department of Labor’s updates to the overtime rule implementing the Fair Labor Standards Act (FLSA), experts say. With high overhead costs and a low-profit margin, hotels and restaurants typically don’t have enough money in reserve to give employees big raises to preserve their exempt status or to pay many hours of overtime if employees are eligible.

As a result, hospitality employers will need to explore alternative compensation models, schedules and staffing options to try to mitigate costs, according to Ryan Glasgow, an attorney with Hunton & Williams in Richmond, Va.

Some choices will be simple, he noted. For employees with relatively high salaries who work long hours, the logical choice is to increase their salaries, as the minimum increase in salary likely will be less than the employer would have to pay in substantial overtime hours. As for employees with low salaries who don’t work much overtime, it makes sense to convert them to nonexempt and pay overtime for the few overtime hours they might work.

“For all other employees, the decision will be much more difficult and will require a lot of strategic planning and analysis,” Glasgow said. “For example, in certain circumstances, it may be feasible for the employer to combine two exempt positions into one position so that the cost of increasing the salary for the remaining one employee is offset by the cost-savings from the elimination of the other employee’s position.”
He added that it may be better for the employer to convert a position to nonexempt and hire more employees to perform the work so that none of the employees work overtime. “Similarly, employers should evaluate each impacted position to determine whether there are unnecessary and/or inefficient tasks that can be eliminated or given to another employee so that the position requires fewer hours of work, thus lowering the impact of paying overtime,” he noted.

Domino Effect

Be aware of the potential domino effect when an employee’s salary is increased above the new salary level. The employee and the employee’s supervisor may suddenly be making similar salaries. Supervisors may ask for an increase as well, leading to salary increases up the organizational chart, Glasgow said.

Bonus and commission plans will have to be re-evaluated since there may be overtime pay consequences if employees who have been converted to nonexempt are paid bonuses or commissions, noted Robert Boonin, an attorney with Dykema in Detroit and Ann Arbor, Mich., and immediate past chair of the Wage and Hour Defense Institute, a network of wage and hour lawyers.

Rule’s Potential Winners

Salaried workers earning less than $913 a week or $47,476 annually and who regularly work more than 40 hours per week stand to gain from the overtime rule, said Wendy Stryker, an attorney with Frankfurt Kurnit Klein & Selz in New York City. These workers will have their salaries raised above the new threshold, be paid overtime or have their hours reduced to a 40-hour workweek, she said. These employees include entry and midlevel professionals, such as chefs, sommeliers, and hotel or restaurant managers and assistant managers, she added.

The hospitality industry has a lot of employees earning in this range, according to Stryker. She noted that the average U.S. wage for chefs, head cooks and pastry chefs is $45,920. For bakers, the average U.S. wage is lower, at $26,270, Stryker noted.

While workers may benefit from the overtime rule, Michael Layman, vice president, regulatory affairs for the International Franchise Association in Washington, D.C., said the overtime rule will hit the hospitality industry particularly hard. Its employers “disproportionately face unpredictable season- or weather-dependent schedules and variable labor demands, which makes tracking hours and managing overtime costs a significant challenge,” he said.

“Given the need for onsite guest services, employers in the hospitality industry may have less flexibility than other employers to automate or offshore operations,” said Nancy Vary, director of the compliance consulting center at Xerox HR Services in New York City.

However, Carolyn Richmond, an attorney with Fox Rothschild in New York City, said, “I think we will see the live reservationist all but disappear as reliance on [online booking apps] OpenTable, Resy and the others grows.” She added, “Owners are looking at more and more automation—programs that monitor and control labor costs and even how to replace certain employees.”

Other Significantly Affected Industries

Hospitality isn’t the only industry to feel the brunt of the new overtime rule.

“The construction and retail industries will be impacted significantly because, like the hospitality industry, they have unusually high concentrations of low-salaried managers,” Glasgow said. He also expected large research and educational hospitals to be uniquely impacted because they have many low-salaried professionals.

“Any industry that has traditionally offered low pay to its skilled workers is likely to be hard-hit by the new overtime rules,” Stryker said. “In New York City, this is likely to be the creative industries such as advertising and film/television production, where hours are traditionally long, and the work product cannot necessarily be created on a 40-hour-per-week schedule.”

The point of the rule isn’t to benefit employers, though. “The new overtime rules were created to benefit employees,” Stryker said. “As the president noted when he directed the Department of Labor to update the relevant regulations, the FLSA’s overtime protections “are a linchpin of the middle class, and the failure to keep the salary level requirement for the white-collar exemption up to date has left millions of low-paid salaried workers without this basic protection.”

That said, Richmond noted that “While the Department of Labor hopes and expects these changes will lead to increased wages through overtime, I don’t expect that to be the case in [the hospitality] industry. Payroll has already risen dramatically with minimum wage increases and resulting wage compression, and owners will spend more time looking at controlling overtime.”

Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.

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