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  • November 19, 2018 8:19 AM | Bill Brewer (Administrator)

    Image result for Paying More

    NOVEMBER 2018

    Author(s)

    Dan Besser Associate Account Manager

    ASSOCIATE ACCOUNT MANAGER

    BOSTON

    Daniel Besser

    As 2018 comes to a close, most HR teams have turned their attention to 2019 salary budget planning—a task that should not take place without reputable market data. In this strong job market, ensuring salaries are competitive across your organization may keep your workforce focused on their own group’s 2019 planning, rather than spending time over the holidays testing the waters for higher pay elsewhere. Pearl Meyer’s 2019 Compensation Planning Survey is a valuable source of reliable, current data that will help you make informed decisions as you plan for the upcoming year.

    A Key Three-Year Trend

    Across the board, salary budget figures are up and more companies than ever are planning to give increases. In fact, an impressive 94% of surveyed organizations are planning a compensation increase program in 2019, up from 91% just a year ago. A notable shift has occurred this year, as that increase is larger at 3.2% than the near-flat 3% year-over-year that we’ve become accustomed to. In fact, the average projected compensation increase budget is the highest since Pearl Meyer started collecting this data in 2012.

    percent-of-companies-planning-salary-increases-and-amounts-chart

    * 2019 survey results based on preliminary data (for 211 participating organizations) as of November 7, 2018.

    When looking at compensation increase budgets for different employee types (e.g., exempt, non-exempt, management, or executive) there is little difference, suggesting this factor does not have significant bearing on projected salary budgets.

    Global Increases

    Survey participants also provided global data regarding the percentage adjustment to base compensation. This gives organizations a good starting point to determine if they are adjusting pay competitively abroad, as the Compensation Planning Survey collects this data for 60 countries outside of the United States. Three countries to note are India, China, and Russia, as survey respondents indicate that they are providing the largest percent adjustment to base compensation for employees in these countries.

    global-percent-adjustment-to-base-compensation-chart

    * 2019 survey results based on preliminary data (for 211 participating organizations) as of November 7, 2018.

    Preliminary Results Available Now

    Preliminary results of the 2019 Compensation Planning Survey are now available to participating organizations. If you would like to participate in this complimentary survey, please contact survey@pearlmeyer.com.

    Complimentary Custom Reports for all Participants

    All survey participants can run unlimited complimentary custom reports. This tailored reporting tool makes the Compensation Planning Survey unique, as you can view up-to-date survey results for all participating organizations, or for a specific peer group of companies. The custom reporting tool is available to participating organizations immediately after completing the survey and a dedicated Account Manager is ready to assist you, should you have any trouble accessing this tool. Organizations that participate in the Compensation Planning Survey will also receive a free copy of the final report when it is published in January 2019.

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    Source: Pearl Meyer & Partners, LLC

    https://www.pearlmeyer.com/blog/salary-budget-survey-shows-companies-are-paying-more

  • November 19, 2018 8:15 AM | Bill Brewer (Administrator)

    401k, retirement, HSA, health savings account

    by John Sullivan, Editor-In-Chief

     

     November 18, 2018

    Low-cost colossus Vanguard has partnered with HealthEquity, which claims to be the nation’s largest independent health savings account (HSA) custodian.

    The two will team to provide DC sponsors and participants a new service integrating health and wealth planning for retirement.

    Vanguard will offer sponsors the ability to provide HealthEquity HSA products to their employees that feature Vanguard funds or the same investment options as their 401k plan line-up.

    For Vanguard participants who choose a HealthEquity HSA, Vanguard’s Retirement Readiness Tool technology will integrate their HSA information with their 401k balance and other assets “to give them a comprehensive view of their current and future retirement savings,” according to the announcement. “Participants will also benefit from highly personalized communications that are rooted in behavioral finance and proven to successfully encourage their next best action.”

    “Consumers who learn to use HSAs and DC plans together are on the fast track to retirement readiness,” Jon Kessler, President and CEO at HealthEquity, said in a statement. “Our partnership with Vanguard offers plan sponsors a powerful solution to connect health and wealth.”

    With $1.1 trillion in DC assets under management, Vanguard serves as recordkeeper to more than 1,900 qualified plan sponsors and 4.8 million participants.

    As a supplement to its new HSA solution, Vanguard plans to introduce a new proprietary health care cost calculator that will help participants to better plan and save for health care expenses in retirement.

    Participants investing in an HSA enjoy several benefits, including a triple tax advantage:

    1) contributions are made pre-tax or are tax-deductible;

    2) earnings and interest accumulate tax-free; and

    3) withdrawals for qualified medical expenses are also non-taxed.

    After age 65, account owners can make withdrawals for any expense without a penalty; however, withdrawals used for anything other than medical expenses are taxed as income.

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    Source: 401k Specialist

    https://401kspecialistmag.com/major-401k-player-enters-hsa-space/

  • November 19, 2018 8:12 AM | Bill Brewer (Administrator)

    AUTHOR

    Valerie Bolden-Barrett

    PUBLISHED

    Nov. 15, 2018

    Dive Brief:

    • Employers are offering healthcare benefits at the highest level since 2013 despite uncertain times for the U.S. healthcare system, according to a new survey of benefits decision-makers released by the Transamerica Center for Health Studies. The online survey, conducted by Harris Poll, showed 28% of respondents made changes to their healthcare benefits, with 32% adding health insurance and 36% adding other healthcare benefits.
    • Company size was cited as the top reason for not offering or being unable to offer health insurance; 59% of small business reps in the survey said their company offered healthcare benefits to full- and part-time workers, compared to 85% of overall employers. Respondents also cited cost (28%) as an obstacle. Only 16% of respondents said they think offering the best health benefits package is the biggest benefit-related priority. Just 1% of those currently offering health insurance said they won't be providing it in two to three years.
    • The survey results also showed that 61% of benefits decision-makers said their company is "extremely/very aware" of potential healthcare policy changes at the federal level. Just over a third (39%) of respondents anticipate health insurance quality improving in the next one to three years.

    Dive Insight:

    Healthcare coverage remains top consideration for job applicants. According to a survey released in February by America's Health Insurance Plans (AHIP), health coverage is the reason 56% of employees remain on their current job. The AHIP survey also showed that most employees are satisfied with their employer's health plan. Health coverage, therefore, can be an effective means of attracting, hiring and retaining talents.

    After a being a strong point of discussion in the late months of 2017, Congressional health policy has generally failed to impact larger employers' pain points. Most employers in the Transamerica survey were aware of the potential healthcare policy changes, but were uncertain about the potential impact of repealing the Affordable Care Act's employer mandate. A smaller contingent (27%) in the survey were concerned about protections for preexisting conditions being overturned.

    Employers are continuously trying to curb healthcare costs, which the Transamerica survey and other studies affirm. But those efforts have proven difficult, given healthcare system issues regarding the ability to evaluate quality of care, as well as the increasing cost of prescription drugs.


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    Source: HR Dive

    https://www.hrdive.com/news/employers-offering-health-benefits-at-highest-level-since-2013/542217/

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  • November 19, 2018 8:10 AM | Bill Brewer (Administrator)


    AUTHOR

    Valerie Bolden-Barrett

    PUBLISHED

    Nov. 16, 2018

    Dive Brief:

    • In a new Staples Business Advantage survey, 44% of the respondents said they had the flu last year, and 45% of them blame their colleagues for coming to work sick and spreading the virus. Citing a Centers for Disease and Prevention (CDC) report, the business-to-business Staples division noted that people can be infected with the flu a day before symptoms appear and up to a week afterwards, and that people are the most contagious three to four days after becoming ill. According to Staples, employees took on average just 2.7 days of sick time, which likely means that employees are coming to work during the most contagious stages of the illness. More than half of respondents (53%) who were out with the flu last year admitted returning to work before feeling better.
    • Survey results suggested that employees skipping the vaccine and being fearful of taking enough sick days to get well is behind the spread of the flu virus at work. Just 47% of the respondents said they normally get a flu shot. However, when asked what employers are doing to protect the workplace against the flu, only 53% of their employers offer sick leave; just 51% provide cleaning services for bathrooms and common areas;  and fewer than half offer tissues and anti-viral cleaning supplies. Also, 36% of employers offer vaccination days and 17% let employees work from home.
    • Baby boomers and women in the survey were more proactive about taking precautions against the flu. However, given the severity of last year's flu season, half of the respondents said they were concerned about the flu this season. According to the CDC, the virus was widespread in more than two-thirds of the U.S. by the end of the week of Dec. 23, 2017, and widespread throughout the country between Dec. 30, 2017, and March 3, 2018.

    Dive Insight:

    Employers can better protect the workplace from flu outbreaks by stepping up the precautions that survey respondents addressed, including allowing employees to work from home or providing vaccination days to encourage inoculations. Some employers are offering vaccinations on-site and including a focus on flu prevention in their wellness programs. Three basic tips employers can use to get through the flu season are: 1) offer flu shots at work; 2) encourage workers and their families to get vaccinated; and 3) ask employees to stay home when they're sick.

    Also, HR managers can help mitigate employees' fear of staying home sick beyond a few days by creating a culture of health. Just telling employees to stay home while sick or to get vaccinated might not be enough to get them to do so. By building and sustaining a culture of health, employers can create a supportive and energizing work environment that engages workers in healthful activities, habits and lifestyles.

    According to the CDC, the flu leads to $10.4 billion in direct medical costs and $16.3 billion in lost earnings each year. But mandatory flu vaccinations have consequences. In 2017, Saint Vincent Health Center in Erie, Pa., paid $300,000 to resolve a U.S. Equal Employment Opportunity Commission (EEOC) suit over its mandatory flu shot policy. Similar suits have followed.

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    Source: HR Dive

    https://www.hrdive.com/news/short-sick-time-policies-might-be-helping-to-spread-the-flu-at-work/542332/

  • November 07, 2018 10:12 AM | Bill Brewer (Administrator)

    In a politically split Congress, the House will have more pull against the Senate on wages, leave, immigration and labor unions

    Dana Wilkie By Dana Wilkie


    November 7, 2018

    Paid parental leave, a federal minimum wage hike and union-friendly laws are among the issues Democrats will work to advance on Capitol Hill after winning control of the House of Representatives following Tuesday's mid-term elections. 

    "You can absolutely anticipate more worker-friendly legislation," said Lisa Horn, vice president for congressional affairs at the Society for Human Resource Management (SHRM). "Of course, those would be hard to get enacted because they require the [Republican] president's signature, and if they're too progressive, Trump is unlikely to sign them."

    More Oversight, Appropriations Battles

    Controlling just the House is not that much different than if Democrats had taken control of both houses, Horn said. That's because they'll have the political heft to demand more oversight of workplace laws and policies, conduct investigations, and curtail Republican labor proposals through the appropriations process.

    "Oversight efforts will really ramp up, and many employee-friendly proposals will certainly be pushed in the House," she said. "They'll likely be met with resistance in [the GOP-controlled] Senate, unless they could be modified to be less progressive or less employee-friendly."

    For instance, Horn said, the Department of Labor (DOL) is scheduled to release its new overtime regulations in March. Those regulations are expected to raise the salary threshold for white-collar exemptions but not as high as the Obama administration had attempted. With Democrats controlling the House, they could try to stop the rule from being finalized through the appropriations process and oversight hearings, Horn said.

    "Democrats might want to bring up the DOL secretary [to testify before Congress] and have him justify the rule," she said. And by controlling the House, the Democrats will have subpoena power should they wish to conduct investigations into President Donald Trump's or the GOP's policies.

    SHRM has recommended that the DOL raise the salary threshold for exempt employees from $23,660 to nearly $32,000 annually. The Obama administration overtime rule, a regulation that the courts halted while the Trump administration developed its own overtime rule, would have doubled the salary threshold. SHRM opposed this doubling as "too much, too fast."

    Paid Leave Laws

    With the addition of many women and minorities to House seats following Tuesday's election, and given the likelihood that Rep. Nancy Pelosi, D-Calif., will return as House Speaker, Democrats are likely to champion policies that promote gender pay equity, diversity and workplace flexibility.

    They may resurrect the Family and Medical Insurance Leave (FAMILY) Act, a national paid-leave program that would let workers receive a portion of their pay when they need time away from their jobs for family or medical reasons. Right now, federal law offers eligible workers up to 12 weeks of unpaid leave for such purposes.

    Although only a handful of states offer paid family leave, others are expected to follow.

    Also likely to resurface is the Healthy Families Act, which would require employers with 15 or more workers to provide up to seven job-protected paid sick days each year that employees could use to recover from their own illnesses, access preventive care, provide care to a sick family member, or attend school meetings related to a child's health condition or disability.

    While SHRM supports employers providing paid sick leave, "we tend to oppose a mandated approach," Horn said. SHRM hasn't taken a position on the FAMILY Act. "We're still talking to [SHRM] members about what national, paid family leave might look like. Some elements raise challenges, like how it would interact with state laws, or how it would interact with employers who already offer paid family leave."

    SHRM supports the Workflex in the 21st Century Act, under which employers would voluntarily offer full- and part-time employees a guaranteed minimum level of paid leave, plus flexible work options such as telecommuting. 

    Federal Minimum Wage

    The federal minimum wage stands at $7.25 an hour—a rate that hasn't changed since July 2009. Several states have raised their own minimum wages.

    Horn said she expects that, with Democrats in control of the House, raising the minimum wage will "certainly be on the table."

    SHRM does not take a position on the federal minimum wage.

    Labor Unions

    Democrats are also likely to pursue the Workplace Democracy Act, versions of which have been re-introduced in Congress from 1992 to 2018. Provisions in various forms of this proposal might:

    • Make it easier for workers to support unions through a majority sign-up process by allowing the National Labor Relations Board (NLRB) to certify a union as an exclusive bargaining representative if a majority of eligible workers sign valid authorization cards and the NLRB verifies that majority.
    • Require an employer to begin negotiating within 10 days of receiving a labor-organizing petition.
    • Breach attorney-client privileges and require employers to disclose money paid to anti-union consulting firms. 

    SHRM opposes these ideas.

    Workplace Immigration

    Democrats are likely to conduct more oversight of the administration's immigration agenda, while Republicans are likely to double down on their regulatory agenda, according to SHRM's Government Affairs staff.

    Horn said the Trump administration is expected to propose regulations that could make it more difficult to hire foreign nationals on H-1Bs visas, and Democrats will no doubt push back.

    She said SHRM will continue to advocate for H-1Bs "to access needed talent."

    Even though stalemates are to be expected with Democrats in charge of the House and Republicans in charge of the Senate and White House, both parties may wish to cater to voters as the 2020 presidential election approaches by negotiating to resolve some workplace issues.

    "It can't be a 'do nothing' Congress," Horn said.

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    Source: Society for Human Resource Management (SHRM)

    https://bit.ly/2OyxfId 

  • November 05, 2018 10:05 AM | Bill Brewer (Administrator)


    EBRI report highlights 2017 trends in contributions, distributions

    by Jessa Claeys 

    November 1, 2018 

    in Research/ToolsYour 401k News

    -----------------------   

    The popularity of HSAs is exploding—which is great—yet most employees aren’t using them as retirement savings vehicles—which is… unfortunate.

    It’s a trend highlighted in the latest report from the Employee Benefits Research Institute (EBRI).

    According to “Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics, 2017: Statistics from the EBRI HSA Database,” most Americans with HSAs aren’t investing their funds, maxing out contributions or otherwise using it to save for future medical expenses.

    Instead, over three-quarters who contributed to such an account in 2017 also withdrew at least some of the money.

    One would think in the time since 2004, when the HSA concept first launched, employees would have gained a better understanding of its intended purpose. But that doesn’t appear to be the case.

    Part of the problem could be that many HSA enrollees are fairly new to the game. In fact, 2017 data showed 77 percent of existing accounts were less than three years old.

    In spite of largely ignoring its intended use as a long-term savings vehicle, average HSA balances continue to grow year-over-year. Overall, “two-thirds of account holders ended 2017 with positive net contributions,” EBRI noted in its report. “The average HSA balance among account holders with individual or employer contributions in 2017 was $2,764, up from $1,873 at the beginning of the year.”

    Still, few employees are maxing out their accounts or investing their assets. A mere 13 percent contributed the fully allowable annual amount last year. Even fewer invested beyond cash—just 4 percent.

    Those who did invest ended the year with higher account balances. However, they were also far more likely to take distributions (69 percent versus 31 percent). And when distributions were taken, investors tended to withdraw larger amounts on average than non-investors ($2,293 compared to $1,696).

    “Plan sponsors and administrators will need to support and educate account holders about tactics for self-funding uninsured medical expenses, including the benefits of moving beyond cash when investing HSA assets and explaining how contributing closer to the maximum allowed by law will increase the likelihood of being able to cover uninsured medical expenses in the future,” said Paul Fronstin, Ph.D., director of the Health Research and Education Program at EBRI and author of the study.

    “With health care costs comprising such a large percentage of retirement expenses, the HSA should be viewed as an important retirement savings vehicle.”

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    Source: 401(k) Specialist magazine 

    https://401kspecialistmag.com/heres-how-employees-are-misusing-hsas/

  • November 05, 2018 9:59 AM | Bill Brewer (Administrator)

    401k, retirement, IRS, contribution limits

    Limit increases take effect January 1

    by Jessa Claeys 

    November 2, 2018

    in RegulationYour 401k News

    --------------  

    The Internal Revenue Service announced Thursday that it will raise contribution limits for employees who participate in 401k, 403b, most 457 plans, as well as the federal government’s Thrift Savings Plan, from $18,500 in 2018 to $19,000.

    Limit increases are calculated annually according to inflation rates and take effect January 1.

    “Based on Betterment for Business analysis, over roughly 30 years, that extra $500 can equate to $41,900.84 at a 6 percent rate of return. Taxpayers who are on the fence about increasing their contributions should see this as a great opportunity for a long-term investment in their retirement savings,” Eric Bronnenkant, head of Tax at Betterment for Business, told 401(k) Specialist in an interview.

    For employees without access to workplace retirement plans, the cap on Individual Retirement Accounts (IRAs) has finally gone up, as well. The new max is $6,000, compared to $5,500—an amount that had been in place since 2013.

    The annual catch-up contribution for IRA savers age 50 and older, however, remains unchanged at $1,000.

    The IRS issued technical guidance detailing these items in Notice 2018-83.

    Phase-out ranges were updated for 2019, as well.

    IRA deductions:

    • For single taxpayers covered by a workplace retirement plan, the phase-out range is $64,000 to $74,000, up from $63,000 to $73,000.
    • For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $103,000 to $123,000, up from $101,000 to $121,000.
    • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $193,000 and $203,000, up from $189,000 and $199,000.
    • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

    Roth IRA deductions:

    • The income phase-out range for taxpayers making contributions to a Roth IRA is $122,000 to $137,000 for singles and heads of household, up from $120,000 to $135,000.
    • For married couples filing jointly, the new range is $193,000 to $203,000, compared to $189,000 and $199,000 last year.
    • For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

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    Source: 401(k) Specialist magazine 

    https://401kspecialistmag.com/irs-reveals-401k-ira-contribution-limits-for-2019/

  • October 29, 2018 9:43 AM | Bill Brewer (Administrator)


    BY JOYCE M. ROSENBERGAP Business Writer

    October 29, 2018 07:59 AM

    A sign in the window of a clothing store in Manhattan is already putting shoppers on notice: It will be closed on Election Day so employees will have time to vote.

    Companies aren't required to shut down on Nov. 6, but many give their staffers paid time off to go to the polls — 44 percent, according to a survey by the Society for Human Resources Management, a trade group. Small business owners who wonder what to do should first check their state and local laws.

    There's no federal law requiring employers to give staffers time off to vote, but a majority of the states do. Many states provide for two hours of paid time off to vote, but the laws vary widely in how much time companies must give, and when they must give it. For example:

    — California says employers must give workers sufficient time to vote either at the beginning or end of their shifts but can agree to time during the shift. Employers are only required to pay for up to two hours of time off.

    — Kentucky gives workers four hours and gives bosses the right to determine what hours staffers can take to vote.

    — New York provides for two hours off; however, if an employee has four hours off between the time the polls open and their start time, or, if they have four hours to vote after the work day ends, there is no required time off.

    — Minnesota's law is more liberal. It says a staffer has the right to take "the time necessary" to vote, and to be paid for that time.

    Some states also require employees to give bosses advance notice that they'll need time off to vote; how much notice varies from state to state.

    As long as owners are meeting the requirements of state and local laws, they can make their own policies on time off for voting. Many companies are more liberal than the laws require — the Society for Human Resources Management survey also found that 29 percent of companies give their staff more unpaid time off to vote than their state laws require.

    As with all other workplace policies, a voting policy should be in writing and made available to staffers.

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    Source: San Luis Obispo Tribune

    https://www.sanluisobispo.com/news/business/article220785225.html

  • October 24, 2018 8:35 AM | Bill Brewer (Administrator)


    AUTHOR

    Valerie Bolden-Barrett

    PUBLISHED

    Oct. 24, 2018

    Dive Brief:

    • International auction house Sotheby's has launched a student loan repayment benefit program. The company said the initiative aims to reduce the $1.5 trillion owed by former students in the U.S. Plan participants must have outstanding student debt owed to an accredited loan organization. Former students and parents responsible for paying their children's debt can participate.
    • When an employee makes a student loan payment, Sotheby's will contribute $150 toward the principal amount of a student loan, up to $1,800 a year. The program covers workers for as long as they're eligible, U.S.-based, full-time Sotheby's employees with qualifying student loans.Employees can participate in the program so long as they remain eligible, full-time, U.S.-based employees of Sotheby's with student loans.
    • Sotheby's has partnered with Gradifi, a firm specializing in financial employee benefits, to support the benefit plan. The partnership offers Sotheby's employees advice on college savings programs, refinancing and other related issues.

    Dive Insight:

    Employees are entering the workforce with thousands of dollars in student debt. Financial problems are the greatest distractions on the job for workers, according to one in three respondents in a 2017 study by the Center for Financial Services Innovation. And in a 2018 study by the same organization, nearly half the respondents cited finances as a major stressor. Stress takes a toll on workers' health and their ability to perform their jobs; for employers, that means higher absenteeism, lower retention rates and productivity losses in the millions each year. These statistics alone incentivize employers to intervene, if they can, to help relieve workers of astronomical amounts of student debt.

    In a statement to HR Dive, Gradifi CEO Tim DeMello wrote: "If employers are able to help their employees pay off that debt faster, they're able to alleviate some of the stress; ultimately creating a better quality of life both at work and in their employee's personal lives, and in turn creating a decisive hiring advantage in recruiting highly skilled workers."

    Workers said they would welcome help with repaying their student-loan debt. Nearly half (46%) of participants in a Student Loan Hero survey said they would accept a student loan repayment plan over a 401(k), if they had a choice. And another 53% said they would prefer a repayment program over paid time off. Offering workers the benefit they value most has the potential to enhance engagement​ and raise retention rates. Employee satisfaction and engagement are crucial in a tight labor market, where dissatisfied employees are more likely to leave their current jobs for better pay, benefits and opportunities elsewhere. This is not lost on Sotheby's CEO Tad Smith, who said in a statement that the benefit speaks to workers' satisfaction and engagement. Satisfaction and engagement contribute toward the company's success and the value it delivers to its clients and shareholders, Smith added.

    The IRS has also stepped in to help workers with student loan debt. In August, the agency issued a private letter ruling allowing an employer to amend its 401(k) plan in order to contribute to the retirement accounts of employees paying down their student loans. The hybrid plan has yet to catch on, but it could be a welcome solution to helping workers pay down their student loans, while getting them to save for retirement.

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    Source HR Dive

    https://www.hrdive.com/news/sothebys-rolls-out-student-loan-repayment-benefit/540303/

  • October 18, 2018 10:48 AM | Bill Brewer (Administrator)



    Lisa Nagele-Piazza, J.D., SHRM-SCP By Lisa Nagele-Piazza, J.D., SHRM-SCP
    October 17, 2018

    Consider legal and employee-relations risks

    The holiday season is coming, and many employers will be hosting social events at the workplace and offsite. Workers may look forward to participating in the annual festivities, but can you require that they attend? Here's what employment law attorneys said.

    "Under most circumstances, an employer can require an employee to attend a social function during or even outside of normal work hours," said Christopher Anderson, an attorney with Littler in Nashville. But there are a host of legal issues that employers should consider before requiring attendance at a social or team-building event.

    For example, employees may have religious beliefs that prohibit them from attending an event that falls on a religious holiday or where alcohol is served. In these cases, an employee cannot be compelled to attend, Anderson said.

    Rebecca Bennett, an attorney with Ogletree Deakins in Cleveland, suggested that employers create a culture that encourages employees to participate. Find out what employees want and what would truly motivate them, she said.

    Make Exceptions

    If employees resist attending, evaluate their reasons on a case-by-case basis, said Jay Glunt, an attorney with Reed Smith in Pittsburgh. In addition to faith-based reasons, some workers may prefer to avoid social functions due to mental or physical impairments or other legally protected reasons, he added.

    Event sites should be accessible to workers with disabilities, and employees should be excused if they can't participate in a meaningful way because of a disability, noted Erin Galbally, an attorney with Clark Hill in Philadelphia. Employees also shouldn't be required to attend if they are on a job-protected leave of absence, she added.

    Employment discrimination issues can arise if employers discipline workers for not attending social functions. For example, if an employee doesn't want to attend because she is being harassed by her co-workers, disciplining her for not attending could strengthen any hostile work environment claim she filed under federal and state discrimination laws, Glunt noted.

    "It's a balancing act," Galbally said. "The critical point is to understand why the employee doesn't want to go."

    Compensate Employees

    Nonexempt employees must be paid for all hours worked in accordance with the federal Fair Labor Standards Act and state wage and hour laws. So when attendance is mandatory, employees need to be paid for that time at their regular rate of pay and must receive overtime pay, if applicable. "Also, employers may not deduct hours spent at a required social function from exempt employees' salaries," Glunt said.

    If employees refuse to attend an event during work hours, it's probably not a good idea to make them use their vacation time to bow out. "While it may be legal to take this approach, it may not be wise," said Adam Bartrom, an attorney with Barnes & Thornburg in Fort Wayne, Ind.

    Vacation benefits are generally governed by state law. Even though no states require employers to provide paid vacation benefits, many require employers to follow their company policies and practices on using, accruing and paying vacation benefits. If a company's policy states that employees have sole discretion to determine when they use vacation, then requiring them to use vacation days in this way may violate wage and hour laws in those states, Glunt noted.

    Consider Morale

    Employers should weigh the pros and cons of hosting a mandatory social event from an employee-relations perspective, not just a legal one. Legally, an employer can tell workers that attendance is required and that they will be compensated for their time, "but this heavy-handed approach will almost certainly not be well-received," Bennett said. "Furthermore, HR should view employees' reluctance to attend a social function as a window into a potential human-relations or culture issue at the company."

    If employers force workers to attend or risk losing hard-earned vacation, employees can perceive this as insensitive, Anderson noted. "Employers who, in effect, punish employees for failing to attend a social event are damaging employee morale by undermining the very objective the event is designed to accomplish, which is to create community and encourage collegiality."

    The company should view the event through employees' eyes and ask for their help to plan it, Bartrom said. When employees are involved, they are more likely to attend. "This helps avoid the issues of insubordination, required vacation days and diminished morale resulting from mandatory attendance," he said.

    Create Policies 

    Companies that require employees to attend social functions should have a related policy in their handbook. "The policy can be straightforward and brief," Glunt noted. It should state:

    • The purpose of the policy.
    • The type of social events it covers (e.g., the holiday party, summer picnic or annual barbecue).
    • That all employees are required to attend these social events absent extenuating circumstances.

    Employers shouldn't discipline workers for violating the policy, Glunt said. "Participation should generally be excused if employees articulate a reasonable basis for resisting the event."

    Make sure there is workers' compensation insurance coverage for social events, he added.

    Employers should note that they are responsible for maintaining a safe and respectful environment during sponsored social events. If alcohol is served at the function, the company could be liable for injuries or accidents caused by an employee who consumed alcohol at the event, Bartrom said.

    Workplace policies also apply at such events, so employees must display the same level of respect and professionalism as they would in the workplace, Anderson said. As a result, employers have an obligation to enforce their anti-harassment policies by investigating complaints and taking appropriate corrective action.

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    Source: Society for Human Resource Management (SHRM)

    https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/require-employees-attend-social-functions.aspx/

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