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Category Archives: Labor and Employment Law

California Seeks to Enact Law Prohibiting Employers from Seeking Salary Histories. A Few Thoughts…

21 Monday Sep 2015

Posted by Rory C. Trotter Jr in Compensation, Labor and Employment Law

≈ 1 Comment

Tags

hr, human resources, internal equity, market pricing, negotiation, salary history

<www.kcmsolutions.com

<www.kcmsolutions.com>

…So thanks to the HR Policy Association for bringing this one to my attention. You can read the HRPA synopsis here, and the text of the bill itself here, but in summary if this bill is passed it would prohibit employers from seeking salary history information about an applicant for employment (i.e. compensation and benefits).

^The idea here (I think) is that many companies will often base their salary offers to candidates on their prior earnings as opposed to making said offers based on market data and internal equity. Ergo, an employee that makes, say, $62k in a job that pays $75k at the median (and $80k within the organization extending an offer) might see an offer that is closer to the $62k number than something more market competitive because they disclosed what they’re currently working for. And – since most job applicants are afraid to push back when asked to disclose prior salary – those employees that start their careers under market compensation-wise remain perpetually under market as employers continue to lowball them. By putting this law in place, California lawmakers are hoping that they can create a conditions wherein employees and employers are on a more level playing field when going through salary negotiations (e.g. employers seldom disclose the range for a position).

…I have mixed thoughts on this. I will say – based on my own meandering experience and the anecdotes of others – that (once disclosed) prior salary often does play a significant role in driving an employer’s offer(s). This isn’t always the case – I’ve seen candidates offered well above median salary increases to step into a new role because of both market and internal equity considerations – but on balance I would say that job seekers currently paid below market for their KSAs are right to prefer to keep salary history close to the vest if they can.

Conversely, I would also say that – just as employers have the right to refuse to disclose their pay ranges for jobs – job applicants have every right to do the same. An employer that wants to hire a candidate badly enough will extend a job offer with or without a prior salary history. A lot of this is just about knowing what you’re worth and not being afraid to hold your ground.

^Further supporting the position that asking for salary disclosure should be kosher –  a candidate’s salary more often than not does communicate something about their level… which makes it a valid data point for employers to request. Seldom is the case that a candidate qualified to a Vice President at a Fortune 100 company only makes, say, $50,000. Instead, more often salary and job title are good indicators of a person’s skills relative to peers in the marketplace.

That said, if we start from the place that employers have an advantage over job seekers in the marketplace as a product of (I) supply/demand and (II) the frequency with which they hire… then a society that wants to even that playing field is heading in the right direction with a policy such as the one sitting with the Governor in California. To be sure, I’m not sure that striving for such a marketplace makes U.S. workers more competitive in a global economy… but I understand the sentiment. Additionally, it’s possible that by implementing a policy like this and (presumably) raising the wage water level, California becomes a more attractive market for top talent and see a ROIC in the form of increased productivity and an improved bottom line over time.

Readers: Do you think this is a good policy? If so, are you wearing your employer/business owner hat or employee hat? I’m not quite ready to stake out a position yet one way or another, but welcome your thoughts in the comments section below.

Best,

Rory

The Secret Sauce of Success?

04 Tuesday Aug 2015

Posted by Rory C. Trotter Jr in Labor and Employment Law, Personal Development

≈ Leave a comment

Tags

hr, human resources

<www.business2community.com

<www.business2community.com>

…So a few days ago I read a story from the HR Capitalist about a class action lawsuit filed against Burger King by employees alleging they were mis-classified as exempt on account of being in management trainee programs. From the piece (here):

According to allegations in a recently filed overtime pay class action lawsuit brought by a former employee, Burger King Corp. misclassified its operations coaches and trainees as exempt employees in order to stiff them of overtime pay, saving the fast-food chain millions of dollars.

By classifying the coaches and trainees as exempt employees with no supervisory or administrative responsibilities, whose jobs consisted of performing “menial laborious tasks, including, operating cash registers, cleaning bathrooms, greeting and serving customers, and cooking food,” Burger King intentionally and repeatedly violated the federal Fair Labor Standards Act, according to the unpaid overtime class action lawsuit filed by plaintiff Ronald R.

^So Dunn argues in his post that the BK employees shouldn’t be complaining about being (mis?)classified as exempt on the grounds that they are in fast-track management trainee programs. He says:

Someday my boys are going to grow up and they may land in a management training program right out of school.  If they even so much as give a peep about not getting comped appropriately for the work they’re doing as grunts, you know I’m going to tell them ST_U and do the job.  Because you and I know that’s the way the world works.

They have access to a program.  The best way to get ahead is to work hard and get promoted 5 times before you’re 30.  That’s what the ballers do.

^So – caveating here that if BK is mis-classifying its employees it should stop doing so immediately – this is nevertheless an interesting idea because it goes to the power of access. It reminded me of something a mentor told me once – that early in your career you should make career decisions based not on the biggest job you can get right now… but based on what role will position you for the biggest job five years from now. Mara Schiavocampo reinforces this point in a Linkedin influencer post here. The relevant section is below:

…I remember calling one of my mentors for guidance several years back, feeling stalled in a lot of ways professionally. I expected feedback on my performance. But what I got was something quite different.

My mentor and I stayed on the phone for well over an hour that day, with her giving me advice on everything but my performance: the importance of building and maintaining good relationships; what kind of image I should be working to project; how the hierarchy of the company was set up. That day, she taught me all of the things I needed to know (but didn’t know I needed to know), summarized by what she called PIE: Success is 10% Performance, 30% Image, and 60% Exposure. To this day those lessons long ago continue to be some of the most practically useful of my career.

…So I don’t know if I agree with this distribution or not… but the idea that success is driven in large part by a combination of performance, image/perception, and exposure is in my mind very accurate.

…In our careers, it is easy to feel in any given moment like we are being treated unfairly – particularly when comparing ourselves to others. But I think that what both authors are saying here is that when given an exceptional opportunity sometimes the best thing you can do is put your head down and perform with a smile on your face. Because if you don’t put yourself above doing arduous or otherwise menial tasks, work hard, and have a good attitude then – mixed with the right level of visibility – over the long run you will see a return on your efforts in the form of the career advancement of your dreams.

Best,

Rory

Infographic Thursday: DOL Proposed OT Regulations

30 Thursday Jul 2015

Posted by Rory C. Trotter Jr in Infographic Thursday, Labor and Employment Law

≈ 1 Comment

Tags

DOL, FLSA, hr, human resources, OT

Check out this great infographic (below) from G&A Partners outlining a visual overview of the DOL’s proposed overtime rule changes. This is the best summary of the changes I’ve seen so far, so I wanted to share. As always, if you like this weeks’ infographic then follow its author in Twitter here.

GA_Partners_DOL_Proposed_Overtime_Regulations

Happy Thursday,

Rory

The Importance of Training Managers on Fed and State Labor and Employment Laws

05 Friday Jun 2015

Posted by Rory C. Trotter Jr in Labor and Employment Law

≈ 1 Comment

Tags

hr, human resources

<www.chicagobookclinic.org

<www.chicagobookclinic.org>

…So this morning I was reading the DOL website and came across this piece highlighting a $275k plus back wages settlement levied against Staples Contract and Commercial for failing to properly notify an executive of his right to take job protected leave under the Family and Medical Leave Act prior to discharging his employment. For those unfamiliar with the act (abbreviated FMLA for short), it essentially entitles workers in the U.S. to job-protected and unpaid leave for qualifying medical and family reasons.

In the case outlined on the DOL site, Staples terminated an employee for lost time associated with the care of his wife without informing him of his right to take job protected leave as outlined by the FMLA. The resulting settlement and excoriation by the DOL on its’ website will lead to bad press that may ultimately damage Staples’ employment brand to the tune of damages that far exceed the monetary costs outlined in its settlement with the DOL and employee.

…That said, I share this piece not to draw attention to Staples, but to note that any company that doesn’t properly train its leaders on employer obligations under the law could find itself in a similar situation. To this point, consider a few facts:

1. An employee doesn’t have to specifically ask for FMLA coverage in order to be protected under the act – he/she only needs to provide enough information about their situation for said employer to be able to infer it may be covered under the act.

2. There are a number of nuances to the FMLA that a manager not trained on the act may not know about – such as the fact that employees that accumulated part of their initial qualifying 1,250 hours and 12 month’s service while working as contractors must have those hours counted for purposes of calculating FMLA eligibility once employed full-time.

…In essence, any company with 50 or more employees working within a tight geographic region that doesn’t educate its managers on the rules governing FMLA risks creating a scenario in which an employee isn’t informed of their right to job protection under the act… and an outcome like that experienced by Staples.

^To this point, perhaps the most important takeaway from the DOL posting is below:

…Staples also agreed to promote an enterprise-wide policy for compliance with the FMLA by providing training for human resources and other managerial personnel with respect to FMLA notice and eligibility requirements.

^More than anything, educating people managers on the labor and employment law issues conceivably likely to impact their workforce is key to incorporating policies and processes that (i) properly manage risks, and (ii) ensure that employees are treated fairly. After all, as I’ve said before most people want to do the right thing… so long as they know what it is.

Happy Friday,

Rory

Infographic Thursday: The Staggering Costs of FLSA Non-Compliance to U.S. Employers

23 Thursday Apr 2015

Posted by Rory C. Trotter Jr in Infographic Thursday, Labor and Employment Law

≈ 1 Comment

Tags

Fair Labor Standards Act, FLSA, hr, human resources

Check out this great infographic from G&A Partners highlighting the costs of FLSA non-compliance to employers in 2014. As always, if you like this infographic then follow its author here.

2014-FLSA-Statistics-Infographic

Best,

Rory

Non-Exempt Employees Earning Less Than $50k Might Soon Become OT Eligible If…

14 Tuesday Apr 2015

Posted by Rory C. Trotter Jr in Labor and Employment Law

≈ 2 Comments

Tags

FLSA, hr, human resources, overtime

<chieforganizer.org

<chieforganizer.org>

1. I was originally going to title this “Preparing for FLSA White-Collar Overtime Pay Exemptions”, but that would have gotten way fewer views.…the DOL’s rumored changes to the FLSA act come to past. 1

As background, several months back the DOL signaled that they were looking to modernize OT pay rules, specifically emphasizing the need to update the salary threshold to reflect present day wages. Currently, employees must make a minimum salary of $23,660 ($455 per week) to qualify as salaried exempt employees. That salary threshold has only been changed once since 1975, however, and raising it to the Economic Policy Institute’s recommended $50,440 ($970 per week) would make many Supervisors / Line Managers across the U.S. that are currently classified as exempt eligible for overtime.

This change is not coming tomorrow (the latest estimate is sometime this spring), so employers will have time to prepare for any changes. But while the rollout has been delayed several times, changes are coming.

There’s also been speculation that California’s quantitative duties test 2. If you want to know more about the difference between California’s exemption test and the one outlined in the FLSA, this resource from SHRM is a great place to start.may be applied to the FLSA executive exemption 2, which as a practical matter means that regardless of if the Department of Labor ultimately opts for a much lower salary threshold than that recommended by the EPI, many exempt employees will end up needing to be re-classified even if they comfortably meet the new salary threshold.

…As Michael V. Abcarian over at Texas Lawer notes, the employers that stand to be most impacted by this are those currently (i) classifying Line Managers whom engage in the same job duties as their direct reports as exempt and (ii) those firms employing a sizeable number of exempt employees underneath the EPI’s proposed salary threshold. Employers in this latter category are already likely to be pay followers with tighter margins, and so could find themselves needing to pass their rising human capital costs onto consumers simply to remain viable (or to identify dramatic new efficiencies in their supply chains).

With all that said, while I don’t know that I personally agree with ratcheting up the exemption pay threshold more than 45% (unless it’s staggered over a large enough period of time that it gives impacted employers time to make the no doubt required changes to their business models), with the U.S. economy becoming more and more service oriented this was a long-time coming; after all, there are a lot of people in the country right now that are working very high hours for very low pay. And whether looking at low-wage workers or the population as a whole, U.S. wages haven’t kept up with productivity for a very long time.

…Anyway, I just wanted to share my thoughts on this subject as it came up while talking to an HR colleague the other day. For those wondering how these changes might impact your client group, as a starting point check out sheet #17 A, “Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act.” found on the U.S. Department of Labor website here. And as always, please share your own thoughts in the comments section below.

Best,

Rory

Does Managing the HR Function in California Require an SPHR?

07 Tuesday Apr 2015

Posted by Rory C. Trotter Jr in HR Management, Labor and Employment Law

≈ 2 Comments

Tags

California, employment law, hr, human resources, labor law, sphr

open_law_book

1. Don’t judge me. -_-…So the other day I was chatting with another HR Pro about state laws 1, and at one point she commented that “opening a business in California is like opening a business in another country”, going on to say that having a California designated SPHR certification is a table stakes requirement for any HR Leader hoping to make informed policy recommendations around how to manage the workforce.

Ergo, this morning I started to do a little bit of research examining the differences between HR in California and HR everywhere else, assuming I’d find significant but not mind-blowing variations. Imagine my surprise then when I found the following:

California Employees Must be Paid Immediately at the Time of Discharge:
In California, if an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately. For each violation of this rule, an employer must pay $200 per employee, plus 2. See section’s § 201. and § 210. of the California labor code here.25% of the amount unlawfully withheld. 2

The “Exemption Test” is much higher in California than elsewhere:
Under the standard outlined in the FLSA (and most other states), the executive overtime exemption is defined by a number of factors, but mainly focuses on one’s “primary job duties and responsibilities.” Conversely, California’s executive exemption requires exempt employees to (i) earn at least 2xs the 3. $9 an hour and going to $10 in 2016.state’s minimum wage 3, (ii) supervise two or more employees, and (iii) spend 50% or more of their time on exempt activities. This can easily lead to situations like Heyen v. Safeway wherein employees are misclassified by an employer as exempt in California, even if that designation might have held true had that business been open almost anywhere else.

Meal and Rest Periods:
In contrast to federal law, in California an employer may not employ an employee for more than five hours per day without providing said employee with a meal period of at least thirty minutes. If an employer fails to comply, the employee must be paid one hour of pay at their regular rate of compensation for each workday that the meal period is not provided. Failure to pay this penalty (referred to as a meal period premium) on the paycheck that the violation occurred can – as in the case of failing to pay wages at the time of discharge – result in additional penalties.

…I spent about an hour and a half reviewing California Labor and Employment Law before I became convinced that running a business there like one might run it anywhere else in the country can result in significant fines and 4. Depends on if you’re the employer or employee, I suppose.penalties. I am not saying that this is good or bad 4 – it just is what it is.

With that said, revisiting our original question: As an HR pro can one learn enough to protect one’s business through good old-fashioned independent learning, or is the SPHR or some other professional training required?

As always, please share your thoughts in the comments section below.

Best,

Rory

Infographic Thursday: What’s in a Name? Independent Contractor vs. Employee Status

19 Thursday Jun 2014

Posted by Rory C. Trotter Jr in Infographic Thursday, Labor and Employment Law

≈ 2 Comments

Tags

hr, human resources, independent contractors

WunderLand Group has an infographic up showing the differences between being classified as an independent contractor vs. being classified as an employee. This is important info because businesses can face issues with the IRS for improper employee classification. Furthermore, employees that are improperly classified might not be receiving the right pay and benefits.

After checking out the infographic below, if you’d like to learn more about this topic you can do so by visiting Wunderland’s site here. Additionally, you can also follow them on Twitter here.

Finally, thanks to Matt Zajechowski at marketing agency Digital Third Coast for sharing today’s infographic. You can follow Digital Third Coast on Twitter here.

Contractor-vs-Employee-Risks-and-Rewards-Infographic

As always, please share your thoughts in the comments below.

Best,

Rory

How to Know When a Policy is Illogical

26 Wednesday Mar 2014

Posted by Rory C. Trotter Jr in Employee Relations, Talent Management

≈ 1 Comment

Tags

employee relations, Godzilla policies, hr, hr policies, human resources, workplace policies

Image Credit: <www.logic-alphabet.net

Image Credit: <www.logic-alphabet.net>

Jacque Vilet, President of Vilet International, has a great post up on Compensation Cafe recounting a famous research experiment dealing with Rhesus monkeys.

I won’t go into details (Vilet does an incredible job of that herself here), but in a few sentences:

1. Five monkeys are put into a cage with a banana hanging from the ceiling.

2. Every time a monkey attempts to get the banana, it and its peers are blasted with cold water from a hose.

3. Eventually the monkeys associate attempting to get the banana with being blasted with cold water and don’t attempt to get it anymore

4. Even once the threat of the hose is removed, future monkeys to enter the cage are (physically) discouraged from attempting to climb the cage by the original monkeys to have experienced the cold water.

5. As such, when the original monkeys are (gradually) removed from the cage, the remaining monkeys (who have never experienced the cold water) become enforcers of the “no going after the banana” policy despite having no firsthand experience on why they shouldn’t.

Vilet asks us to consider the above story when thinking about the utility of our own workplace policies. This is good advice, but the challenge here is knowing the scope of the reasoning behind why a policy was put into place to begin with. Many of the seemingly asinine policies, rules, and yardsticks put in place 1. Human Workplace CEO Liz Ryan calls them Godzilla Policies.to govern employee behaviors 1 were put in place to manage the behaviors of the small minority of employees who would cross a line in the absence of such rules. Dress codes and attendance point systems and the like exist because of the 5% of people that would wear flip flops and show up 15 minutes late to everything in their absence. And so it’s easier to hold everyone to a rigid policy than it is to manage outliers on a case by case basis.

It could be argued that in such instances a more common sense approach would be to coach managers on how to address deviant behavior (as opposed to 2. The relative rarity of great managers admittedly makes this admittedly easier said than done.treating the entire population like children). But conversely, some policies exist because the absence of them would expose an organization to significant legal liability or because of a specific business need. For example, scheduling breaks for production line workers makes sense because not having enough employees present to make sure it runs smoothly would harm the business.

Identifying which policies are in place because no one wants to do the harder (but ultimately better for employee engagement) work of managing exceptions versus the ones that are in place because their absence would cause mayhem is not an easy job.

What are you doing in your organization to identify that line?

As always, please share your thoughts in the comment section below.

Best,

Rory

Sunday Reading: March 23, 2014 – Overtime Rules, Trusting Yourself, and Money Versus Wealth

23 Sunday Mar 2014

Posted by Rory C. Trotter Jr in Compensation, Labor and Employment Law, Personal Development, Sunday Reading

≈ Leave a comment

Tags

FLSA, hr, human resources, overtime eligibility

Image Credit: <savingsangel.com

Image Credit: <savingsangel.com>

Sunday reading for March 23, 2014:

1. As many in the comp space are aware, President Obama has launched a Presidential initiative to expand overtime eligibility to include employees that have historically been considered exempt due to falling into broadly defined “executive” and “professional” classifications. Unfortunately, very few details of the proposal are available at this time. With that said, Jim Brennan, Senior Associate of ERI Economic Research Institute has a great post up on Compensation Café helping us to understand exactly what the Presidential Order might mean for employers, and what resources we can utilize to stay abreast of updates going forward. If you’re an HR/comp person I highly recommend checking this one out here.

2. Author/blogger/entrepreneur Penelope Trunk has a great post up on her website highlighting the importance of trusting yourself in your 20s. She recounts a period of time immediately following undergraduate school where she had no money, no friends, and a sense that she’d failed to meet her expectations in life to date. At the time – despite doing something she loved and having a lifestyle that allowed her to learn a lot about herself – she was deeply unhappy because she wasn’t confident that she was making the right choices. This was a good read for me because I’m beginning to understand that it isn’t enough to just follow your heart. The hard part really comes after that. See, no matter what choices we make we are going to have moments of self-doubt and insecurity. But in order to enjoy the present and really get the most out of the time we’re in, we must have the confidence to embrace our choices and everything that comes with them. Generally speaking I disagree with at least 80% of what Penelope Trunk says (or at least dislike the way she says it), but this piece is a really good read. Check it out here.

3. Deepak Chopra, Founder of the Chopra Foundation has an insightful post up on Linkedin about the difference between money and wealth. In it, citing numerous examples he demonstrates that having money doesn’t necessarily make a person or society wealthy. See… while money is a thing with tangible value, wealthiness is fundamentally a psychological state. Fortunately, by understanding this fact we can take steps to lead better, more fulfilling lives. Chopra summarizes his understanding of how we can do this here.

As always, please share your thoughts in the comments section below.

Best,

Rory

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