It’s Time to Give Your Performance Review… a Performance Review

Fifty-eight percent of executives believe that their current performance review processes neither drive employee engagement nor high performance, according to a recent survey from Deloitte. These findings have many organizations looking into how they are conducting reviews. Read this blog post from UBA to learn more.


If you’ve felt the itch to reimagine your company’s performance review structure, your head is probably in the right place.

According to a recent Deloitte survey, 58 percent of executives believe that their current performance management processes neither drive employee engagement nor high performance. If engagement and performance are low, it’s time to start addressing how you’re conducting performance reviews.

History of Performance Reviews

The modern performance review originated during the Industrial Revolution, when a laborer’s performance could be accurately measured by their product output: the number of railroad ties installed, textiles produced, for example.

In today’s economy, there are more “knowledge workers” than ever before: people who are paid to think and produce ideas rather than material goods. In this type of work model, that traditional approach to performance reviews is no longer suitable.

The Problem

Beyond their outdated structure, today’s widespread ranking- and ratings-based performance reviews damage employee engagement by isolating high performers and costing managers more overhead evaluation time. Only eight percent of companies report that their performance management process drives high levels of value, while 58 percent said it isn’t an effective use of time.

Tips to Improve Your Performance Review Model

Consider an Ongoing Conversation vs Yearly Review

Many employees find that annual check-ins are simply not enough to gain a big-picture understanding of performance over time. Instead of waiting until the end of the year to evaluate, consider bi-weekly or quarterly check-ins with all direct managers. Accenture—one of the largest consultancies in the world—recently scrapped annual performance reviews in favor of a system in which employees receive timely feedback from their managers immediately after a completed assignment.

The big takeaway is that leading organizations are ditching the annual evaluation cycle and replacing it with ongoing feedback and coaching. By opting for a continuous review model, organizations can promote more gradual, holistic employee development.

Decoupling Yearly Performance from Compensation

Several years back, the separation of pay from performance was making its way into corporate playbooks. In 2015, General Electric actually abandoned its merit pay model.

The most common method for decoupling salary and performance (in a linear way), is to instill more continuous, instant feedback per project, while still retaining a single annual conversation about money.

This approach fosters a 360-degree view of compensation and gives employees more time to think about their performance and ways to improve throughout the year.

SOURCE: Olson, B. (19 November 2019) "It’s Time to Give Your Performance Review… a Performance Review" (Web Blog Post). Retrieved from http://blog.ubabenefits.com/its-time-to-give-your-performance-review-a-performance-review


Why using a 401(k) to pay for emergencies is hurting employers and employees

Are your employees financially stressed? According to HR leaders, more and more employees are withdrawing $1,000 or less from their 401(k) retirement accounts to help pay for emergency expenses. Read this blog post from Employee Benefit News for more.


More than ever, HR leaders at Fortune 500 companies are reporting that employees are withdrawing $1,000 or less from their hard-earned 401(k) retirement accounts to pay for emergency expenses. These employees — often living at the brink of being financially unstable — are using the funds for unexpected emergency expenses like car repairs, medical bills or even to purchase books for their college-age children.

Corporate leaders are now, more than ever, concerned that many of their employees live under a high degree of financial stress that can affect their productivity, creativity and even their health, resulting in absenteeism and drops in productivity that ultimately impact the bottom line. HR managers are especially feeling the pain as they are called upon to handle the excessive paperwork needed for the 401(k) plan withdrawals, causing extra work that could be spent more productively on other projects that benefit all employees.

The fact that more Americans than ever are dipping into their 401(k) accounts for emergency funds reveals that many are living above their means or working below their needs financially. While it’s important to have an emergency fund, for many people savings is a luxury they simply can’t afford. According to a Federal Reserve survey, nearly 40 percent of Americans said they don’t have enough cash on hand to cover an unexpected $400 expense. The quick fix for many is to use credit cards or ask family or friends for a loan when an emergency arises, but when those are not options, tapping into the 401(k) accounts is becoming increasingly common.

Some companies are partnering with payday loan companies so employees will refrain from tapping into their retirement funds. This is actually a worse idea because they’re setting their employees up to fail by enabling a vicious cycle of debt employees may never be free of.

Financial education could be the key to helping employees gain control of their financial lives. Companies that promote financial literacy courses and attendance at financial seminars or conferences offer the first step toward a better path for future financial stability. Offering or subsidizing the cost of continuing education courses help inspire employees to begin a lifelong journey of education for higher salaries and career advancement. Companies that promote education and career advancement attract, engage and retain employees longer than companies that don’t.

Flexible benefits can help

Companies can help their employees refrain from using their 401(k) retirement accounts as a bank if they offer flexible benefits. Employees get to choose how to use their earned benefits, like utilizing the monetary value of their unused paid time off (PTO) for other priorities such as paying for an emergency expense, paying down student loan debt or funding a vacation, among other things. Companies that offer flexible benefits are giving workers the ability to finally be in the driver’s seat of their careers and lives. When companies empower employees in this way, job satisfaction, productivity and creativity go way up.

Flexible benefits are a no brainer to organizations that want to attract, recruit, engage and retain top talent. Salary isn’t the only factor in determining a good career move, and companies that want to win the talent war will offer some type of flexible benefits. Every employee should have the ability to choose benefits based on their individual needs, avoiding the damaging financial practice of using 401(k) accounts for emergency expenses.

SOURCE: Whalen, R. (25 November 2019) "Why using a 401(k) to pay for emergencies is hurting employers and employees" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/employees-are-using-401k-funds-for-emergencies


Key factors in choosing your benefits during open enrollment

Even if your employees are veterans when it comes to open enrollment, the employer-sponsored benefits landscape is shifting. With the number of benefits that are now available to employees, how do employees select the right benefits for them? Read this blog post from Employee Benefit News for a few key factors to consider when choosing your benefits during open enrollment.


Even if you are a veteran in choosing employer-sponsored benefits, the landscape is shifting. Over the past years, we’ve seen changes to mental health counseling stipends, extended maternity/paternity leave and family building. Companies across industries are realizing that in order to attract and retain talent, they need to provide best in class benefits that save employers unforeseen costs in the long run, and shows employees that their employers are invested in their well-being — in and out of the office.

With all these available options and only a short window to select what’s right for you, here’s what should you look out for during open enrollment.

Which benefits matter to me?

The beauty of a diverse workforce is that employees may represent various walks of life. However, this means that not all benefits make sense for every person. Perhaps your boss is prioritizing childcare for his toddler while your colleague is looking to refinance student loans. Whatever your life circumstance, ask yourself, “Which benefits are most pertinent to my life and life goals in the coming year?”

For instance, fertility benefits may not be immediately attractive at first glance, even if you’re actively thinking about starting a family. But 1 in 8 couples will be impacted by infertility and treatment without coverage can be wildly expensive. It’s important to make sure you’re thinking critically and getting all the necessary information when browsing for your benefits. Rule of thumb: if this could impact you in the coming year, even if you’re not 100% sure, opt-in for coverage.

What’s actually covered?

During open enrollment, be sure to ask your benefits team about how robust each offering is and what’s included. A particular benefit may look like it has a lot to offer, but after further investigation, you may uncover restrictions, unforeseen out of pocket costs and other obstacles that may make it harder for you to utilize the benefit.

With fertility benefits, many conventional carriers offer coverage with a dollar maximum, meaning you’d max out on coverage before completing a full IVF cycle. Plus, there are additional costs outside of the basic IVF procedure, like diagnostic testing, medications, and genetic testing which may come with a hefty price tag you’d have to pay for. Without adequate coverage, many people have to make cost-based decisions, forgoing the technology they need to reach a successful outcome.

As an alternative, Progyny’s coverage is bundled, meaning your entire treatment event is covered and you do not have to worry about what is or is not included, or fear running out of coverage mid-way through. Many vendors have similar disruptive solutions to ensure they’re not leaving their members high and dry during difficult times.

When sifting through options, be sure you’re asking what’s covered and not covered under your plan. A lot of benefits may seem expansive, but make sure you’re getting the most out of the coverage that’s available to you. Ask: Are the best clinics in your area included in your plan as “in-network”? Do you have to meet medical necessity requirements before being allowed to access your benefits?

Which benefits are supported?

Once you’ve opted in for benefits during open enrollment, how do you access your benefit? How do you move forward with treatment? Does your benefit provide access to the doctors in your area? Since many of these offerings are complex and without proper onboarding, how can you be expected to understand the next steps?

With the growing emphasis on mental health and concierge member experience, companies like Progyny try to eliminate some of the member’s burden and create an easy to use benefit model that provides member support. For example, our dedicated Patient Care Advocates — a concierge-style fertility coach — helps members navigate the clinical and emotional aspects of your fertility treatment, making a difficult process a bit easier.

Another important factor to consider when shopping for benefits is access to care where you live — are the doctors that your insurance covers close by and easy to get to? When choosing your benefits, look out for any information about access to support. The goal of a benefit is to make your life easier, not leave you feeling confused and stressed in times of need.

What do I do if I’m unhappy with the benefits offered during open enrollment?

Often times, employers are unaware of what an employee wants until it’s brought to their attention. If you are unhappy with the benefits offered, raise the issue with your HR team! You are your own best advocate and change begins with you.

Not sure where to start? If you are comfortable, speak with your colleagues. Seek out a company resource group to see if others have similar needs. This way you can help form a plan or a way to approach HR. Once you have an idea of what you need, talk to HR to explain why the proposed benefit would be pertinent to you and your colleagues. Employers understand that the key to keeping good talent is making sure they’re happy.

Open enrollment can be overwhelming but take advantage of the resources you have. Ask questions, do your research, and discuss the options with experts in your office. With an arsenal of helpful information at your disposal, open enrollment should be stress-free and get you excited for all of the incredible employer-sponsored benefits in your future.

SOURCE: Ajmani, K. (25 November 2019) "Key factors in choosing your benefits during open enrollment" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/how-to-choose-benefits-during-open-enrollment


Improving your employee experience during open enrollment

Often, employers struggle with employee participation during open enrollment season. Switching company enrollments online is one way to increase employee participation. Read the following blog post for more tips to help ease this open enrollment season.


For HR professionals, open enrollment is one of the most stressful and demanding times of the year. Many employers struggle with employee participation and expensive, time-consuming roll-outs. They also have to provide resources to help employees make the right plan selections for themselves and their families. As we head into another open enrollment season, consider these tips to ease the process.

Switch your open enrollments to online platforms.

If you’re still relying on paper enrollment forms, you are likely spending more money and time than you need to in pursuit of your manual work process and its many inconsistencies. Online platforms provide optimum efficiency, accuracy and convenience for your workforce, offering employee self-service options that encourage employees to take initiative in selecting the best plan for their situation. Not only will members of your workforce benefit from the convenience of being able to explore their options on their own time, but you’ll be able to offer them multi-lingual enrollment materials and have more time to assist them than ever before.

Prioritize and diversify communication.

One of the top ways to ensure a smooth open enrollment period is to use multiple communication channels, including frequent reminders regarding open enrollment deadlines. Without consistent outreach on the part of your HR officers and general managers, you will likely find yourself hunting people down to meet your enrollment and extension deadlines. Using an online self-service portal as well as traditional in-person meetings allow you to remind your employees of critical dates and changes as enrollment closes in.

The robust benefits administration system you choose should offer enrollment tracking and reporting features so you can see at a glance who still needs to begin open enrollment, who has left enrollment documents incomplete, who has made changes to their benefits (such as adding a dependent) and more. You can arrange for the system to send automatic reminders to signal the employee that further actions are needed. Providing multiple reminders will improve participation and the completion of on-time enrollments.

Help employees choose the best health plan for their situation.

In order to have the most successful open enrollment period possible, educating your employees on the different plan options available will go a long towards ensuring employee satisfaction. Studies have shown that most employees don’t have the necessary understanding of terms like “deductible” and “coinsurance,” let alone the tools to know which plan is best for their individual needs. Incorporating at-a-glance comparison tools and charts into your online or print enrollment materials can help employees make the most informed decision possible. It can also be helpful to provide educational materials like videos and simplified plan charts or cost calculators.

Keep Up with Benefit Trends and Voluntary Offerings.

Given the current labor shortage and competitive talent market, you’ll want to make sure your company is up to speed on which new benefits your competitors are looking to add, as well as which ones are appealing to specific roles, locations or generations within potential candidates from your hiring pool.

Voluntary benefits, for example, are playing an increasingly important role in employee benefits portfolios and they don’t cost you anything. Some of the most popular voluntary benefits right now include identity theft protection, pet insurance, long term care insurance and critical illness protection. If you aren’t currently offering these types of additional benefits, they could be a cost-effective way to boost employee morale, increase participation in enrollment and attract more workers to your business.

SOURCE: Smith, M. (2 December 2019) "Improving your employee experience during open enrollment" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/improving-your-employee-experience-during-open-enrollment


Implementing Auto Safety in the Workplace

Driving requires concentration and awareness. It only takes one distraction to lose control of your vehicle and crash. Most drivers overlook the importance of keeping their eyes on the road with a significant number attempting to text while driving. In this article, Cathleen Christensen, the Vice President of Property & Casualty at Hierl Insurance, sheds light on this issue and highlights some measures employers can take to curb such accidents.

After falling from 42,836 deaths in 2004 to 32,744 in 2014, fatalities are on the rise again and stand at 37,133 for 2017. The number one cause of all car accidents is distracted driving. “These crashes are largely due to drivers’ negligence,” Cathleen explained. A car traveling at about 55 miles per hour takes approximately five seconds to cover the length of a football field. Five seconds is also the average duration it takes to read a text. At work zones, the few seconds it takes for a driver to get distracted are enough to have them crashing into the work zone. In fact, distracted drivers are 29 times more likely to crash in work zones.

Insurance Losses

Insurance companies are taking the brunt of the financial consequences of drivers’ carelessness by paying for serious losses. The 2016 industry-wide commercial auto combined ratio reached a 15-year high of 110.4%, and the segment has produced an underwriting loss for six years running after years of underwriting profits. According to Cathleen, “One of the primary causes of the industry losing money is distracted drivers. These are drivers who are either talking on the phone or texting while driving. The real consequences are higher insurance premiums for our business customers.”

Measures Employers Should Take to Avoid Losses

Everyone needs to be aware of these measures to minimize accidents caused by distracted driving:

  • Better public education – Drivers need to be educated on the dangers of using their mobile devices while driving.
  • Implement safety policies and make sure employees understand them. These policies include making drivers aware of speed limits, checking their speed gauges and locking their vehicles when they are away from them.
  • Implement a policy regarding the use of phones while driving. Consider using an app that will help keep this policy in place. Employers should prohibit any work-related activity that requires drivers to text or make calls while driving.

Commercial drivers should not be left behind when developing new safety standards for your workforce. Some great recommendations are the following:

  • Review driving records
  • Review and inspect equipment for commercial drivers on a regular basis
  • Implement a sleep safety policy – truck drivers are especially prone to falling asleep while driving due to fatigue as a result of driving very long distances without rest
  • Educate employees on these requirements

What Can Hierl Do to Help?

At Hierl, we listen to clients’ needs and learn about their business to create programs that meet or exceed their expectations. We continuously work with customers to ensure driver safety and provide them with a matrix to help them have an objective measure to look at driving records. We also provide employers with communication material to keep their drivers aware of issues and concerns related to their safety as a prevention measure.

For more information regarding this issue, you can contact Cathleen Christensen at 920-921-5921 or by email at cchristensen@hierl.com.


How to Handle Pay-History Inquiries —The Right Way

Is your hiring team educated and up to date on pay-history regulations? Currently, there are 17 state-wide and 19 local bans that prevent potential employers from inquiring about a candidate's pay history. Read this blog post from UBA to learn more.


We’ve all been there. You’ve gotten deep into the job interview process, and then you’re face-to-face with the awkward question: would you share your previous salary?

Whether the question rears its head in a digital application or during initial in-persons, none of us like answering it. Many people, especially young people, are less committed to their employers and seek new jobs every few years in order to rapidly spike their salaries, yet having to confront the pay question is never comfortable.

Why Pay-History Bans Exist

To date, there are 17 state-wide bans on potential employers inquiring about pay history, as well as 19 local bans. The goal of these bans is to end the cycle of pay discrimination, as well as the cycle of low-earning and poverty.

Everyone knows that it has long been illegal for employers to pay different wages to men and women for the same work, but despite this, the wage gap between men’s and women’s earnings persists. One 2019 PayScale report found that women still make only $0.79 for each dollar men do. A Bureau of Labor Statistics (BLS) analysis discovered that in 2018, median weekly earnings for female full-time wage and salary workers was 81% of men’s earnings. When it comes to minority women and women of color, the pay gap is even more pronounced. The salary history ban is designed to put a stop to that, and begin to repair the damage it has caused.

Pay-history bans allow people who have experienced historically low pay or pay discrimination to have a fresh start when they come in to interview. Some bans go even further than merely blocking pay history questions. A few also prohibit an employer from relying on an applicant's pay history to set compensation if discovered or volunteered; others forbid an employer from taking action against employees who choose to discuss pay with coworkers.

Navigating Pay History

It’s important to ensure your hiring team is educated and aware of pay-history regulations. Read on for thought-starters on what your team can do to make sure you are compliant with these laws.

  1. Audit and review recruiting materials. The first step for many employers is to audit and remove any recruiting materials that ask salary-history questions in states where this is illegal. This includes but is not limited to digital applications, printed materials, and interview scripts.
  2. Develop alternate methods for assigning salary. Your HR and recruiting teams should be focused on finding the right candidate for the job, not necessarily the one who has the right salary profile or history. Asking questions about a candidate's comprehensive experience, previous tenure, and education can be smarter ways to determine what is fair when discussing salary. Using a junior, mid-level, senior, coding model can help your team develop salary ranges that are fair.
  3. Foster a culture of transparency. If it makes sense for your organization, it’s not a bad idea to share salary ranges for each job internally. This will help employees feel confident that their compensation is fair in relation to their colleagues’.

SOURCE: Olson, B. (12 November 2019) "How to Handle Pay-History Inquiries —The Right Way" (Web Blog Post). Retrieved from http://blog.ubabenefits.com/how-to-handle-pay-history-inquiries-the-right-way


Know your people, know your data: Keys to measuring employee engagement

Does your organization offer a total compensation and benefits package that appeals to employees? According to research, over half of employees believe that health insurance is important in terms of their job satisfaction. Read this post for ways to measure employee engagement.


Offering a total compensation and benefits package that fits employee needs drives morale, motivation and performance in the workplace.

Simply put, people who are happy and healthy are more productive. When an organization offers benefits that appeal to employees (and workers know how to use these benefits) employers should see an increase in total productivity.

On the other hand, if a company is off the mark with the total compensation package, or simply hasn’t communicated the benefits to people correctly, it will either see unchanged productivity or a decline. Organizations struggling to find improvement in productivity should look at their employee benefits offerings for answers.

Providing effective group health insurance and well-being programs is a good way to reduce the amount of sick leave worker's take. If employees promptly get healthcare when they’re ill, they’re more likely to be healthier overall. If an organization doesn’t offer appropriate health benefits, the result can be presenteeism.

Additionally, the cost of presenteeism multiplies when sick staff are contagious. One sick person refusing to take a day off can snowball into multiple people arriving ill to work on subsequent days. When illnesses reach critical mass and it’s harder for people to recover from things like the flu or a cold, organizations may find themselves short-staffed when employees finally pay to see a doctor.

Job satisfaction and morale are also linked to employee benefits. Research shows more than half of employees believe that health insurance is important in terms of their job satisfaction — even more crucial if staff live in an area where medical services are expensive.

Strategies to measure benefits engagement. HR staff have multiple ways of measuring how certain workplace functions are performing. Here are some effective methods organizations can use to measure benefits engagement.

Staff surveys. Questionnaires that seek to understand what benefits your staff know they have, and how they’ll use them.

Pulse surveys. Asking staff short, frequent questions about a benefits platform.

Focus groups. Gathering cross-functional groups of staff members together to have a facilitated discussion about benefits.

Exit surveys. Include questions about benefits and satisfaction levels during exit surveys, and then investigate what their next employer might be offering to have lured them away.

If organizations are not regularly questioning how well their benefits plan is performing, they may be missing an opportunity to get key insights into how employees feel about their packages.

Offering employee benefits isn’t just to support an organization’s staff, it should also support an organization’s long-term sustainability. Employee engagement is one key measure. The challenge for organizations is ensuring not only that they include benefits that will be relevant to staff, but also that they properly educate them in what those benefits are.

The less staff are educated on what benefits exist and how they can use them, the less likely they are to engage with them. Not having an appropriate communication strategy can often set benefits plan performance behind.

Working with analytics and claims data can indicate when specific benefits aren’t being used. Knowing what causes the lack of engagement requires a bit of discussion and investigation, but finding sustainable solutions is completely dependent on understanding whether the issue is the benefits themselves, or the communication to staff.

SOURCE: Rider, S. (1 November 2019) "Know your people, know your data: Keys to measuring employee engagement" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/using-data-to-measure-employee-engagement


A benefits wishlist for millennial employees

Only six percent of millennials feel like they make enough to cover their basic needs, according to an Economic Innovation Group study. Many employers are now tailoring their job postings, descriptions and benefits to correspond with the millennial wish list. Read this blog post to learn more.


Millennials are the new core workforce. Their concept of work is different than the standards set by previous generations. They bring bold, new approaches of what work should be, how and where it should be performed, and what the rewards for work should be.

While this has made some employers uncomfortable, millennials are not likely to change their ways. Employers must reassess their concepts to bring out the best of the unique millennial personality.

When I look at the U.S. workforce, I see a dramatic shift in the attitudes, personalities and attributes of millennials, which makes up the majority of the workforce. Millennials bring many positive attributes to the table, including a preference for flat management structures, multiple degrees, technological skills, energy and self-confidence. They also have high expectations for themselves, prefer to work in teams, are able to multitask and seek out challenges.

However, millennials have the highest levels of stress and depression of any generation. About 20% of millennial workers have suffered work-related depression. Millennials want their own living space, but they’re less likely to become homeowners because of student loan debt. Only 6% of millennials feel they're making enough to cover basic needs, according to an Economic Innovation Group national survey of millennials. As a result, 63% of millennials would struggle to cover an unexpected $500 expense. This generation wants to live within their means, but they’ve never been taught how — they need and want to be educated on how to achieve financial independence.

Think about your corporate strategy for attracting millennials. Here are just a few of the ways companies are tailoring their job postings, descriptions and benefits to correspond with the millennial wish list.

Working with meaning. Millennials want to have meaning in their work. Past generations may have worked simply because they needed to pay the bills. Millennials want to get paid too, but they also want to know that their employer is doing more than making and selling products or services. They aspire to social causes and want to know why the organization exists and how they can personally participate and contribute in that culture.

Continued personal growth and career advancement. Millennials want to be coached and have work-life balance. They want management feedback, even if it’s negative. Regular pay increases and promotions are important to them too. It shows that you’re invested in their career path and value their contributions.

Flexible hours and the ability to work remotely. They want flexible hours and the option to work from a location of their choice. This flexibility also contributes to their desire for no added workplace stress. Technology has made it possible to connect 24/7 from anywhere on any device. If you have yet to adapt your culture to accept this new norm, you’ll likely be missing out on this generation of candidates.

Technology. Millennials are smart-device people. Who better to move your organization forward than the individuals who grew up knowing how to download and use an app, or create a widget that solves a problem? They think technology-first and is required for any organization looking to remain competitive.

Financial wellness. A robust financial wellness program that includes self-directed education, competitions, games and rewards will pique millennial interest. Products and services like financial coaching, cashflow tracking, early wage access and credit resources that address their financial challenges will keep them engaged. Above all, a financial wellness program must be tailored to each individual employee to achieve maximum participation and behavioral change.

Employers must be vigilant in order to keep the best and brightest talent. They should also be proactive in managing their employees on a personal level, especially millennials. Otherwise, they are likely to be disengaged and move on — and that will cost money.

As managers and leaders of the organization, it is your responsibility to ensure that millennials understand their future in the company and to communicate that they don’t have to go somewhere else to advance. Employers and leaders have a responsibility to provide millennials with a desirable place to land, and a culture that encourages them to thrive. Don’t give millennials reasons to leave your organization. We need to support them, engage them, reward them and give them reasons to stay.

SOURCE: Kilby, D. (6 November 2019) "A benefits wishlist for millennial employees" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/what-employee-benefits-do-millennials-want


It’s time to consider a wage and hour audit

When is the last time your company conducted a wage and hour audit? According to the Department of Labor (DOL), a record $322 million of unpaid wages were recovered for the 2019 fiscal year, $18 million more than what was recovered for the 2018 fiscal year. Read this blog post to learn more.


Those who believed the Trump administration would scale back the Obama-era Department of Labor’s aggressive enforcement of wage and hour laws may be surprised to learn that the DOL recently announced that it recovered a record $322 million in unpaid wages for fiscal year 2019. This is $18 million more than that recovered in the last fiscal year, which was the previous record.

The agency has set records in back wages collected every year since 2015, according to data released by the DOL. This year, the average wages DOL recovered per employee were $1,025. The agency’s office of federal contractor compliance also announced that it had recovered a record $41 million in settlements over discrimination actions involving federal contractors, an increase of 150% over the last fiscal year.

Effective Jan. 1, the new salary threshold that most salaried employees must earn to be exempt from overtime pay will be $35,568, or $684 per week, under the final rule issued by the DOL in September.

With the new salary threshold taking effect soon, and the DOL continuing to aggressively enforce wage and hour laws, it is a good time to consider conducting a wage and hour audit to ensure that employees are properly classified as exempt or nonexempt and that other pay practices comply with the law.

Employers who did this in 2016, only to find out later that the Obama administration’s proposed hike in the salary threshold would not take effect, may have a strong feeling of déjà vu. But this time, there does not appear to be any viable legal challenge that would delay or block the salary threshold change, so employers must be prepared to either increase salaries of “white-collar” exempt employees (who earn less than $35,568) or reclassify them as hourly employees by January.

Among other things, a wage and hour audit should include the following:

  • Review all individuals classified as independent contractors;
  • Review all employees classified as exempt from overtime under one or more “white-collar” exemptions (administrative, executive, and professional), who must earn at least the $35,568 salary threshold beginning January 1, 2020;
  • Review all other employees classified as exempt from overtime, including computer and sales employees; and
  • Review all individuals classified as interns, trainees, volunteers, and the like.

In addition to ensuring whether employees are properly classified as exempt or nonexempt, a thorough wage and hour audit should look at a number of other issues, including timekeeping and rounding of hours worked, meal and rest breaks, whether bonuses and other special payments need to be included in employees’ regular rate of pay for calculating overtime, and payments besides regular wages, such as paid leave and reimbursement of expenses.

SOURCE: Allen, S. (8 November 2019) "It’s time to consider a wage and hour audit" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/employers-should-consider-a-wage-and-hour-audit