September 2015 Archive

A new analysis of how many U.S. workers are actually taking FMLA leave at any given time — and why they’re taking it — clearly illustrates why administering this type of leave has become such a huge pain in the butt. 

FMLASource is a third-party FMLA administration program offered by ComPsych Corporation, an EAP provider. ComPsych provides services to more than 29,000 organizations covering 78 million people. As a result, it has a wealth of employee data on its hands.

Recently, it put that data to use looking for FMLA-usage trends and benchmarks — and what it found was staggering: At any given time, 10.7% of the U.S. workforce is on FMLA leave.

That’s right, according to FMLASource’s analysis, one in every 10 employees is taking FMLA leave right now. And that’s the average — in some industries the number is far greater.

For example, in health care organizations and call centers, the number of people on FMLA leave at a given time is as much as 30%.

Breaking down the numbers

The analysis also looked into the types of FMLA leave employees are taking, the average duration and the top qualifying reasons.

The findings:

• 63.6% of employees are on continuous FMLA leave
• 34.9% are on intermittent leave
• 1.5% are on a reduced work schedule.

The average duration of leave: 14.2 days.

The top reasons for leave:

• 64.1% of the time it’s due to employees’ own health conditions (see below for a breakdown of what these conditions are)
• 17% of the time it’s to provide care for a loved one
• 9.1% of the time it’s due to pregnancy
• 6.8% of the time it’s to care for a new child.
• The remaining 3% was attributed to “other.”

The medical conditions for which employees are taking leave:

• Surgery — 36%
• Pregnancy (no complications) — 13%
• Bonding — 10%
• Cancer — 7%
• Knee surgery — 5%
• Hospitalization — 5%
• Pregnancy (complications) — 4%
• Depression/anxiety — 4%
• Broken bone — 3%
• Back injury — 3%
• Migraine — 2%
• Back surgery — 2%
• Asthma/COPD — 2%
• Heart surgery — 2%
• Accident — 2%

Finally, FMLASource dug into the top reasons employees’ leave requests were denied:

1. Employee’s supporting documentation wasn’t received in the allotted amount of time.
2. Employee’s requested dates weren’t certified by a physician.
3. Documentation for leave wasn’t received at all.
4. Employee was ineligible for FMLA leave.
5. Employee had exhausted his or her allotted amount of leave time. ***

*** It’s important to mention that just because someone’s exhausted his or her 12 weeks of leave under the FMLA, the employee may still be eligible for additional leave under the ADA.

This has been a point of emphasis for the DOL over the past year. Here’s our breakdown of why, how and when you must grant leave under the ADA.

For a visual representation of all the data outlined above, check out ComPsych/FMLASource’s latest infographic “FMLA By The Numbers.”

Background checks have come under heavy scrutiny from the EEOC in recent years, and knowing when they should and shouldn’t be used isn’t always easy. But car maker BMW should’ve known better in this case. 

What did it do? It asked some of its existing workers — who seemed to be working out just fine — to submit to the same criminal background screening that new hires were being subjected to.

In the EEOC’s eyes, that was a problem.

Incumbent workers tested, too

Here’s the full story:

The EEOC recently sued BMW Manufacturing Co., claiming the company discriminated against African-Americans.

When BMW switched which contractor was handling logistics at its Spartanburg, SC, facility, it required the new contractor to perform a criminal background check on both new applicants for logistics positions and all existing logistics employees who re-applied to keep their current positions.

BMW’s strict hiring guidelines at the time excluded from employment all persons with convictions in certain categories of crime, regardless of how long ago the crime was committed. And as a result of sending existing logistics workers through the screening process, including some of whom had been with the company for several years, 100 incumbent workers were denied re-employment.

The EEOC claims these actions had a disproportionate impact on African-American workers. Specifically, it claimed that 80% of those affected were African-American.

Was there a business necessity? No

The Civil Rights Act stipulates that when a background screening disproportionately affects one group of employees (i.e., African-Americans, Latinos, etc.), and there’s no business necessity tied to the screening, it’s illegal.

Since it was likely hard for BMW to argue there was a business necessity for excluding the incumbent workers — after all, they seemed to be doing their jobs just fine up until this point — the EEOC declared the screening a big no-no.

The agency then sued on behalf of the majority of the African-American workers who lost their jobs.

The result? BMW has since changed its guidelines, and it has consented to pay $1.6M and provide job opportunities to the victims of the alleged racial discrimination to avoid litigation. In addition, BMW agreed to offer employment opportunities to up to 90 African-American applicants who were denied employment as a result of the previous conviction guidelines.

If you’re looking to attract (and retain) the best and brightest recent grads, you may want to look into how you can help them with the financial burden that accompanied those new diplomas.  

Employees saddled with student-loan debt are looking for repayment assistance from their employers.

And they’re willing to give up a lot to get it.

More important than a 401(k)

In fact, according to a study by iontuition, nearly 80% of individuals with student loans would like to work for a company with repayment assistance with a matching opportunity.

What’s more, 49% of those individuals said they’d prefer student loan payment contributions to an employer-sponsored 401(k) plan.

Plus, 55% of workers said they’d rather have the money they’re putting toward health care go toward lowering their student loan balances.

A golden opportunity

While younger employees may be clamoring for student loan help, very few employers are currently offering this option, which means forward-thinking employers can cash in on this unfilled need.

A recent study by the Society  for Human Resource Management (SHRM) study found that just three percent of employers student loan repayment benefits, and fewer than one percent of employers plan on offering the perk within the next year.

Companies that do offer this benefit will cover about $4,591 per worker, on average.

One company that has decided to test the waters of the student loan repayment benefits is PricewaterhouseCoopers (PwC). According to CNN Money, PwC will offer all associates — workers ranging from entry-level staffers to those with six years of experience — $1,200 per year to help them pay down their student loans, beginning in 2016. Employees will be able to take advantage of the benefit for up to six years.

The move makes sense for PwC. The company recruits around 11,000 employees straight out of college each year.

 In regards  to the loan repayment benefits, Michael Fenlon, global talent director for PwC, said:

“Student loan debt impacts the ability to save for retirement, so it has lots of secondary impact as well. We saw this as a way to provide leadership on a major societal issue, as well as something that’s really important to our people.”  

Talent management is a hot topic within the Human Resources (HR) software market. This software category refers to two primary functions: the acquisition of new hires and development of employees. There are more than 100 different software solutions available to improve your processes of interviewing, hiring, onboarding and retaining employees. Let the unbiased experts at Software Advice help. They’ve reviewed 46 talent management systems and can provide you with free demos and quotes to narrow your search and identify the vendors that best meet your needs.

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Pretty much everybody agrees: The annual performance review process is deeply flawed. But there’s another common review procedure that needs to be torn down and rebuilt as well, according to guest poster Glint CEO Jim Barnett.  

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The Washington Post said it best: “Big business is falling out of love with the annual performance review.” Some of the world’s most admired organizations, like Accenture, Deloitte, and most recently, GE, are eliminating traditional annual processes for evaluating employee performance in favor of “more frequent conversations.”

This transition is indicative of a major shift in the way we work. Once viewed as a traditional “rite of corporate life,” the annual performance review has now been abandoned by more than 10% of Fortune-500 companies. We believe this is just the beginning of a dramatic change in performance management systems and practices.

The goal of eliminating the annual performance review is to replace an ineffective, often painful process for managers and employees alike with regular check-ins about development. No more high-stakes, once-a-year grades that go on your “permanent record:” Instead, a regular dialogue where feedback and course correction happen much more frequently.

But first …

If that’s our goal, then we also need to blow up the annual employee engagement survey. In fact, we should start with the employee engagement survey.

Engagement and performance are inseparable. If you improve employee engagement, you will improve performance, and your approach to performance management and talent development can have a meaningful impact on employee engagement.

Yet, most approaches to employee engagement have not kept up with the pace of change and are now way outdated.

We live in an always-on, constantly-pulsing world. We share feedback on a continuous basis, “liking” our friends’ photos and relying on crowdsourced product reviews to make decisions. We also rely on active monitoring of our systems and activities to optimize performance. We have state of art solutions in finance, sales, marketing, and customer success to monitor results in real time and empower our managers with actionable data.

So why haven’t human resource systems evolved with the times? Why aren’t more companies keeping a finger on the pulse of employee engagement? Despite overwhelming evidence that frequent measurement of employee engagement levels makes a difference, 80% of organizations still rely on the annual (or worse, the bi-annual) engagement survey to solicit employee feedback.

At the same time, organizations across the globe report a troubling inability to understand employee motivations and needs. Attrition has become highly expensive, as more employees look outside their organizations for growth opportunities. How can we expect to get the most out of our employees when we can barely grasp what drives them to come to work each day?

Stakes are high

We’ve found, based on data from thousands of employees, that those with unfavorable engagement scores are five times more likely to leave in the next six months than those with high scores. After one year, they’re twelve times more likely to leave.

By gathering employee feedback on a quarterly or even monthly basis, organizations can better understand emerging engagement challenges and act to reduce employee turnover before it’s too late.

Regular engagement check-ins allow managers, leaders and the HR team to take quick action to address problems and to track the impact of actions as time goes on. These check-ins provide organizations with meaningful feedback and enable them to take action to help people be more successful in their jobs.

As more organizations begin to adjust to the significant shift in the way we work together, my hope is they will start with employee engagement. More frequent feedback from employees, actionable insights from systems, and data in the hands of managers — followed by quick action to solve problems that are uncovered — will help organizations increase engagement, build stronger teams, and improve results.

To quote a senior HR executive at GE, “If you’re waiting a year to give meaningful feedback, it’s already old news.” Let’s make our people processes continuous conversations and start building strong teams that thrive.

Jim Barnett is CEO & co-founder of Glint, a company specializing in employee performance analytics and talent management.

There aren’t a lot of employers asking this question of job candidates. But after a recent million-dollar lawsuit, employers may want to consider doing so. 

The question: Did you sign a non-compete agreement with your last employer?

The reason to consider asking it: As it turns out, yes, you can be sued by a new hire’s former employer if A) the person breaks his or her non-compete, and B) you knew or reasonably should’ve known about it.

(Note: If you’re in an industry in which a lot of non-competes are signed, it may not be hard for another employer to prove you “reasonably should’ve known” about a non-compete.)

Employer taken to the cleaners

Medical device manufacturer Biosense Webster has to shell out $1.2M following a lawsuit brought on by the fact that it knowingly hired an individual who’d signed a non-compete with his former employer and had to break that covenant when he went to work for Biosense.

Meet Jose de Castro, who at the start of this story worked for one of Biosense’s competitors St. Jude Medical.

de Castro sold medical devices for St. Jude and was recruited by Biosense to sell similar products — and to similar customers.

At the time de Castro was under a three-year non-compete agreement he’d signed with St. Jude.

Biosense knew this but told de Castro that for a number of technical reasons it believed the non-compete was unenforceable. As a result, Biosense told de Castro that if he took the job at Biosense, it would provide him with a legal defense should St. Jude try to enforce the non-compete.

de Castro then left St. Jude for Biosense. Immediately after, St. Jude sued Biosense.

St. Jude claimed that Biosense was liable because it deliberately interfered with the non-compete.

Biosense tried to fight the suit by claiming — again, for technical reasons — the non-compete was invalid.

The ruling

A U.S. district court disagreed with Biosense and upheld the non-compete. It then ruled Biosense was guilty of willful interference and ordered it to pay St. Jude $47,680 to cover the costs associated with replacing de Castro. It also had to pay St. Jude $550,952 in lost profits.

And in a final blow, the court also ruled that Biosense’s conduct essentially forced St. Jude into litigation to enforce the non-compete. As a result, Biosense was ordered to pay another $662,018 to St. Jude to cover attorney’s fees.

The total bill for Biosense: $1,260,650.

Cite: St. Jude Medical S.C. Inc. V. Biosense Webster Inc.

With less than six months to go until the bulk of the ACA reporting deadlines kick in, the IRS has released new versions of the reporting forms as well as some important details on what’s expected of employers when it comes to the actual reporting process.  

First, here are updated versions of the four IRS reporting forms all applicable large employers (ALEs) should be very familiar with at this point:

• Form 1094-B— Transmittal of Health Coverage Information Returns.
• Form 1094-C— Transmittal of Employer Health Insurance Offer and Health Coverage Returns.
• Form 1095-B— Health Coverage.
• Form 1095-C— Employer Provided Health Insurance Offer and Coverage Insurance.

Then, there’s the deadlines that correspond with these reporting forms. A copy of the applicable Form 1095, or a substitute statement, must be given to each employee by January 31 every year and can be provided electronically with the employee’s consent. But since January 31 falls on a Sunday in 2016. The 2016 deadline has been moved to February 1.

Employers must file the returns with the IRS for the 2015 year by Feb. 29, 2016 (March 31 if filed electronically). Any employer filing at least 250 returns must file electronically. The deadline for future year’s returns will be Feb. 28.

Extra HRA obligations?

In the final instructions, the IRS addressed one major confusion point: Employers’ reporting obligations for major medical plans tied to a health reimbursement arrangement (HRA). Based on the draft instructions the agency had issued earlier in the summer, employers were worried there would be additional reporting obligations for HRA plan sponsors with fully insured health plans.

However, in the section titled of the instructions titled “Coverage in More Than One Type of Minimum Essential Coverage,” the agency laid those concerns to rest. According to the IRS, employers with fully insured plans with an HRA that have employees enrolled in both plans aren’t required to report the cover under the HRA. This is also true for firms with self-insured plans with HRAs.

Note: If a health plan and an HRA are sponsored by different employers, each employer will have to separately report the coverage. An example of how this would happen: An employee is enrolled in both his own employer’s HRA and his spouse’s employer’s non-HRA self-insured group health plan.

COBRA considerations

Another favorable clarification centers on COBRA offers. Under the final IRS instructions, COBRA offers made to terminated employees are not reported as offers of overage under any circumstances even if a former employee elects that COBRA coverage.

Not having to report COBRA coverage offers shields employers from potential Shared-Responsibility Reporting penalties.

This clarification is a reversal of the IRS’ initial guidance that said employers would have to report the offer of COBRA coverage based on former employees’ elections.

Finally, tucked away in the instructions are some useful tips on truncation or shortening of the Employee Identification Numbers (EINs) on the statements provided to individuals as well as what to do when there are missing taxpayer IDs.