Ultimate Software's Blog https://blog.ultimatesoftware.com Thoughts on Putting People First in the Workplace Thu, 28 Jun 2018 12:28:37 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.7 Discipline vs. Performance – Spotting the Differences and Finding Solutions https://blog.ultimatesoftware.com/poor-performance/ https://blog.ultimatesoftware.com/poor-performance/#comments Wed, 04 Apr 2018 13:27:15 +0000 https://blog.ultimatesoftware.com/?p=1298 From time to time, we invite guest contributors to provide their personal perspectives about trending HCM topics. The views, opinions, and comments expressed below are solely those of the author and do not represent Ultimate Software. This post was commissioned by Ultimate Software and the author has or will receive compensation for their work. Being […]

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poor performanceFrom time to time, we invite guest contributors to provide their personal perspectives about trending HCM topics. The views, opinions, and comments expressed below are solely those of the author and do not represent Ultimate Software. This post was commissioned by Ultimate Software and the author has or will receive compensation for their work.

Being able to tell misconduct apart from poor performance isn’t necessarily rocket science. But the differences often confuse managers, and that can cause missteps when they’re addressed. Managers might put someone who is late a lot on a performance improvement plan (PIP), or—as is usually the case—discipline an employee for poor performance. However, when an employee is disciplined for poor performance, he’s often left on his own to figure out what went wrong, or even left thinking he’s bound to fail. That’s not helping anyone improve.

Misconduct

Misconduct differs from poor performance. Misconduct involves intentional or negligent conduct (such as not caring enough to be on time to work), whereas poor performance is actually doing the job poorly. Being late isn’t doing the job. Lying to a manager isn’t doing the job. While it may impact the work, misconduct is separate and apart from the actual work.

Here’s a simple way to spot the difference: you may be able to train away poor performance, but you can’t train an employee to get to work on time, not lie to you, or not steal from you.

Misconduct requires discipline. Simply put, we have to discipline when employee misconduct warrants it. Managers dislike having disciplinary conversations. However, failure to discipline will result in poor morale overall and, ultimately, poor productivity and employee engagement.

Discipline for misconduct includes, in escalating order of severity: verbal warning, written warning, suspension, and termination. Except where a union has bargained otherwise, an employer gets to choose what level of discipline it will apply in a particular situation. An employee who is late four times might get a verbal warning and may get a written warning if she continues to be late. An employee who steals a truck usually gets fired. Imagine discipline issues as the concepts we learned in kindergarten—don’t hit people, clean up your messes, don’t take things that aren’t yours, tell the truth, and so on.

Poor Performance

Poor performance also looks different than misconduct. Poor performance is the inability to get a job done or done to the employer’s expectations. For performance issues, we expect that employees will get the chance to improve. Fairness also tells us that employees should get that chance.

Employers often address poor performance with a PIP, which typically has three parts: it explains why the performance is subpar; what the employee can do to improve his performance; and what tools, training, or other support the employee can expect to receive throughout the process. This is really what sets discipline apart from performance management—performance management requires the employer do something to help improve the performance.

Handling Discipline and Improving Performance

Here are just a few things managers can do to help improve performance:

  1. Coach. Managers have an opportunity to coach employees to improve performance.  Whether it is spending more time with the employee, shadowing, providing encouragement, or simply providing more hands-on training, coaching is a great way to show how to do something correctly.
  2. Assign a partner. If there is another team member who does the job well, match that individual with the employee whose performance misses the mark.  If both have a good attitude, performance will improve.
  3. Provide more training. If available, additional training on the technology used, the process, or product could improve performance.

Finally, don’t forget to check in.  Performance is not something organizations can afford to ignore.  When it is poor and improving performance, spending the extra time for a one-on-one or quick chat will go far in improving and monitoring performance.

We as HR professionals have to teach managers how to properly address an employee issue. When we treat a discipline issue as a performance issue, we take on too much. When we discipline a performance issue, we don’t give the employee the tools she needs to succeed.

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Ultimate Software is Prepared for the European Union General Data Protection Regulation (GDPR) https://blog.ultimatesoftware.com/what-is-the-gdpr/ https://blog.ultimatesoftware.com/what-is-the-gdpr/#comments Thu, 09 Nov 2017 11:00:38 +0000 https://blog.ultimatesoftware.com/?p=1143 What is the GDPR? The new European Union General Data Protection Regulation (2016/679) goes into effect May 25, 2018,  replacing the current EU Data Privacy Directive (95/46/EC) that has been in place since 1995. The main objective is to harmonize data protection laws throughout the EU.  The GDPR establishes a set of standardized data protection […]

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what is the gdprWhat is the GDPR?

The new European Union General Data Protection Regulation (2016/679) goes into effect May 25, 2018,  replacing the current EU Data Privacy Directive (95/46/EC) that has been in place since 1995. The main objective is to harmonize data protection laws throughout the EU.  The GDPR establishes a set of standardized data protection laws that apply to all EU member countries in order to “protect the fundamental rights and freedoms of natural persons and, in particular, their right to the protection of personal data.”

Although the GDPR will retain many elements of the 1995 Directive, it has been greatly enhanced and strengthened with additional obligations to account for the current technological society we live in.  The GDPR increases the rights for individuals and strengthens the obligation of companies. The GDPR will become the most progressive and strongest privacy and data protection regulation in the world and will impose stiff fines and penalties for non-compliance.

The GDPR applies to all organizations that store and/or process personal information of EU residents, who are defined as “data subjects.” The responsibilities of an organization vary depending on if that organization is defined as a “data controller” or a “data processor.” For the purposes of the services provided by Ultimate Software, our customers with employees who are residents in the EU are considered data controllers and Ultimate Software is considered a data processor per the GDPR.

What is Ultimate Software responsible for under GDPR?

The GDPR has specific requirements for data processors, regardless of whether they operate within the boundaries of the EU or not.  Ultimate Software has the following key practices in place which align with our responsibilities as a data processor under the GDPR:

Processing Based on ContractAll processing we carry out on our customers’ behalf is governed by our formal contract with each organization.   Ultimate Software has no ownership of employee personal data, and we only take processing actions that are defined in the contract and actions our customers instruct us to take.

Personnel Access based on Business NeedUltimate Software employees and subcontractors that are authorized to access customer employee personal data are governed by confidentiality terms. Access is granted only to personnel with a business need to carry out the contracted services and/or instructions provided by the customer.

Security of ProcessingUltimate Software has technical and organizational security measures in place that govern and protect our customers’ information and employee personal data.

  • Our systems and services are designed to provide ongoing confidentiality, integrity, availability and resilience of processing;
  • Customer data is stored on encrypted servers and transmitted via encrypted sessions;
  • We maintain systems and processes that allow us to restore the availability and access to customer employee personal information in the event of a physical or technical event;
  • We maintain processes and procedures for regular testing, assessing and evaluating the effectiveness of technical and organizational measure that provide for the security of processing.

Demonstration of Compliance and Ongoing AssessmentUltimate Software utilizes a combination of internal teams and independent external parties for regular testing, assessment and evaluation of the effectiveness of our technical and organizational measures. Our current Service Organization Control (SOC) 1 and SOC 2 reports and ISO 27001 and ISO 27018 certifications can be viewed in our customer portal under the Compliance and Audit Reports section.  Our privacy policy with links to current privacy certifications can be accessed here.

Cross Border Data TransferUltimate Software has a formal privacy program and is certified and registered with the US Dept of Commerce to the EU-US Privacy Shield program.  This certification permits personal data of EU residents to be legally transferred to Ultimate Software data centers located in the United States. Our privacy policy with a link to our EU-US Privacy Shield registration can be accessed here.

For our Canadian customers implemented in our Canadian data centers, the European Commission recognizes Canada as having adequate domestic data protection laws in place, and permits personal data of EU residents to be legally transferred to Canada. The current adequacy ruling for Canada can be found here.

Breach NotificationUltimate Software will notify our customers after becoming aware of a personal data breach involving customer employee personal data.

Deletion of DataUpon termination of a customer’s contractual agreement with Ultimate Software, customer data, including employee personal data, is deleted after all contracted services have been completed, which may include subsequent governmental reporting, or other items the customer has requested of Ultimate Software.

What is an Employer responsible for under GDPR?

The GDPR will harmonize data protection laws, which will be helpful for employers established in multiple Member States across the EU.  However, the GDPR specifically states that individual Member States can implement additional or specific local rules for processing personal data in the context of employment.  It will be important for HR professionals with employees in the EU to continue to monitor local Member State laws’ impact on the workplace.

Your HR team, ideally with guidance from your legal counsel, will want to review internal business processes and policies to ensure they align with data controller responsibilities under the GDPR.  Below are some of the key areas your HR team and legal counsel will want to review:

Processing employee personal data based on “Consent” vs “Legitimate Interests”The GDPR requires there to be a lawful basis in order to collect and process personal data.  Under the GDPR, consent must be “freely given, specific, informed and unambiguous”, in addition to other requirements.  Many employers have commonly relied upon consent. However, there is often debate if employee consent can be “freely” given.  Employers that collect consent from employees should review those notices along with the processes in which they are communicated, captured, updated and maintained to ensure compliance with GDPR consent requirements.

Employee personal data may also be lawfully processed on the “legitimate interests” of the employer. Examples of “legitimate interests” may include (i) in order to fulfill the employment contract, (ii) to pay the employee, and (iii) payment of various taxes by the employer, etc.  Employers will want to ensure they have clearly captured why personal data is captured from employees and the reasons for each instance in which it is used.

Rights of Data SubjectsThe GDPR has enhanced and clarified the individual rights of data subjects. HR professionals will want to ensure they update any processes or procedures in order to provide employees with the ability to exercise their rights under the GDPR, without “undue delay” and in any event within one month.

Right of AccessEmployees have a right to access all personal data that the employer retains on them.  Access could be granted via a system if the data is stored in electronic form or in a way the HR professional has decided.

Right to Rectification—The GDPR allows employees to have inaccurate personal data concerning him or her corrected.

Right to ErasureThe GDPR allows employees to have personal data about them erased when it is no longer necessary in relation to the purpose it was collected or if consent is withdrawn.

Employers still have time to review their processes and procedures before the GDPR comes into effect on May 25, 2018, but the clock is ticking. Ultimate Software will continue to review all areas of UltiPro and make further enhancements as needed to assist our customers with their responsibilities as data controllers.

This information does not constitute legal advice. Employers should always seek independent legal advice regarding compliance with any laws, rules, or regulations. For questions or more information about GDPR, please email privacy@ultimatesoftware.com.

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Ethics of Social Media Searching During Recruiting https://blog.ultimatesoftware.com/social-media-searching-during-recruiting/ https://blog.ultimatesoftware.com/social-media-searching-during-recruiting/#comments Thu, 02 Nov 2017 10:00:47 +0000 https://blog.ultimatesoftware.com/?p=1133 From time to time, we invite guest contributors to provide their personal perspectives about trending HCM topics. The views, opinions, and comments expressed below are solely those of the author and do not represent Ultimate Software. This post was commissioned by Ultimate Software and the author has or will receive compensation for their work. by […]

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social media searching during recruitingFrom time to time, we invite guest contributors to provide their personal perspectives about trending HCM topics. The views, opinions, and comments expressed below are solely those of the author and do not represent Ultimate Software. This post was commissioned by Ultimate Software and the author has or will receive compensation for their work.

by Kate Bischoff, Employment Attorney & HR Consultant, tHRive Law & Consulting LLC

These days, employers have oodles of information at their fingertips. However, when it comes to hiring, some employers are still reluctant to dive headfirst into the sea of information that includes social media searching during recruiting. I’m here to tell you, the water is calm, deep, and welcoming. In fact, pretty soon, not diving in could become a problem for organizations looking to hire the best talent.

As employers, we know that someone with a violent past should not work with children or vulnerable adults. We know that an accountant candidate should not have a prior grand-larceny conviction. This is why we conduct background checks: to prevent potential harm to our customers or organizations.

For some employers, though — even those who routinely administer background checks — social media searching during recruiting seems rather taboo. But in my opinion, you should gather as much information about potential candidates as you can. It’s publicly available information, and it’s perhaps the easiest way to combat hiring regret.

Consider this hypothetical situation: You are hiring a Customer Experience Manager. You’ve got several great candidates with excellent resumes, but you haven’t conducted any Web searches because you’ve heard looking at social media profiles could get you into legal trouble.

Soon, the hiring manager makes a decision, and you bring on Sebastian.

Sebastian’s first few weeks are great, but by the end of the first month, his work ethic is rapidly deteriorating and he’s spewing negativity everywhere he goes. Suddenly, your Social Media team discovers tweets he’s published that decry the organization and complain about general ineptitude in management and customer care. Backdating his profile, it becomes obvious that he took this same socially aggressive stance at his previous employer, appearing unable to control his negativity after a difficult day at work.

What do you do?

There are many different paths you can take. You may be able to let Sebastian go, but his activity could be protected under the National Labor Relations Act steering you right into an NLRB charge.  You could keep him and ask that he delete his posts, but again, you could run head-first into an NLRB charge.  You could ask him why he feels this way, address his poor work ethic through a performance improvement plan, and counsel him on your social media policy.  But you could have likely prevented this issue in the first place by quickly glancing at his social media activity, which would have revealed his 140-character tirades with a previous employer, before preparing the offer letter.

Using a simple search engine will usually provide all you need for social media searching during recruiting. Only the public versions of those profiles are available, but you can usually learn more about each candidate based on the information they choose to share. If you’re already using Facebook, Twitter, and LinkedIn to source candidates, you can also use these to research candidates. And you can do it while mitigating any legal liabilities.

Here are the steps to do this safely:

  1. Decide what will disqualify candidates in advance. A small typo in the cover letter may not disqualify a potential engineer, but it probably will disqualify a copyeditor applicant. It’s the same with conducting social media-based “background checks,” but it’s important to agree to disqualifying terms ahead of time.
  2. Have HR search. The main concern about reviewing social media is the potential to gather protected-class information. HR is more likely to know and work against bias than a hiring manager who has only heard the phrase but has not been aptly trained. Also, HR probably isn’t a decision maker—they simply report the information. (Quick reminder, if you have a third party do your social media searches, the Fair Credit Reporting Act applies, so tread carefully.)
  3. Wait. Do not search the profiles of every candidate. That’s way too time consuming. Wait until you’re down to your top five, three, or two candidates.
  4. Ask the candidate. I know this one is difficult, but social media is rife with mistaken identity, unknown trolls, and more. Even if you find objectionable content, give the candidate an opportunity to explain it. This provides a sense of fairness to the candidate and gives them an understanding of why you may decide to move in another direction.

Today’s social discourse is full of sensitive and objectionable opinions and activities. Wouldn’t you rather know about these issues beforehand? I certainly would.

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Employee Handbooks: Your Ultimate Guide https://blog.ultimatesoftware.com/employee-handbook-guide/ https://blog.ultimatesoftware.com/employee-handbook-guide/#respond Thu, 11 May 2017 10:00:58 +0000 https://blog.ultimatesoftware.com/?p=997 From time to time, we invite guest contributors to provide their personal perspectives about trending HCM topics. The views, opinions, and comments expressed below are solely those of the author and do not represent Ultimate Software. This post was commissioned by Ultimate Software and the author has or will receive compensation for their work. Guest […]

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From time to time, we invite guest contributors to provide their personal perspectives about trending HCM topics. The views, opinions, and comments expressed below are solely those of the author and do not represent Ultimate Software. This post was commissioned by Ultimate Software and the author has or will receive compensation for their work.

Guest post by Kate Bischoff, Employment Lawyer & HR Consultant

Shoved deep in some desks of supervisors and employees, the employee handbook resides.  For some, the handbook has lived in this dark corner of the workplace for years without a thought or care. In other workplaces, the handbook rests right there on the desk, enjoys frequent reading, and is referenced when needed. Where does your employee handbook live?

employee handbookLawyers, like me, love handbooks (I’m not joking). Handbooks set expectations—both employer and employee expectations. Take, for example, one of the most important policies: sexual harassment. From this singular policy, employers can expect employees not to engage in sexual-harassing conduct, and employees can expect the employer to do something about it. Employees learn what the employer defines as sexual harassment and how employees can report it if they see, hear, or otherwise experience it. And, as a bonus for lawyers, we can use the policy to protect the employer if a claim is ever raised.

Employee handbooks take on all shapes and sizes. Some are true tree-killers, coming in at over 100 pages.  Others are on smartphone apps available at employee fingertips 24-7, with links to forms that an employee might need. Here are a couple of tips for all handbooks:

Make Them Readable & Accessible

Some of the best advice I ever received was “write for fourth graders.” This is especially true for handbooks. While all of your employees might be post-graduate-degree holders, a handbook with too much legalese, jargon, or seven-syllable words is not going to be understood by most.  If you write it to a fourth grader, your employees (and potential jurors) can better understand it. It’s accessible and, therefore, meaningful.

Handbooks Should Contain Only What’s Necessary

Hundred-page handbooks make my heart hurt. Employees are probably not going to read such tomes, even though they acknowledge an in-depth reading at the start of employment. Plus, with such detail, it is unlikely that the employer is doing everything it says it will do in a handbook of that size. An at-will employment statement, harassment, discrimination, retaliation, leave (and FMLA, if it applies), and some state-specific policies are the only policies employers must include. My favorite add-on policy is “use good judgment in all situations.” It pretty much covers everything else.

Use Your Handbook!

If you say you’re going to do something in your handbook, do it. Forgetting, picking and choosing, or actively working against what’s in your handbook hurts you and your people, because you show that the handbook doesn’t mean what it says. This breeds mistrust and resentment among employees. You don’t want this, even though you have the power to change the handbook at any time, with or without notice.

Talk About Your Handbooks with Employees

Employees should have a handbook available to them. They also should have a member of management, including HR, available to answer questions about what’s in there. Walk through the handbook with new employees. Hold a meeting to discuss changes when you make them.  Being open and honest about what’s in there helps create an environment of trust.

Update, Update, Update

One last thing, please update your employee handbook. Run it past your friendly neighborhood employment lawyer. Like life, employment law moves pretty fast. If you don’t stop and look around at it once in a while, you could miss it. In all seriousness, new requirements are made all the time. Being out of compliance is easy if you don’t regularly have someone take a look.

Handbooks are creatures of culture. If your handbook sets a tone of doom and gloom, that will be reflected in your culture. Think about this when you draft, revise, and rollout a handbook.  Find the right person to work with you to make your handbook a useful tool that employees look at, value, and don’t shove into the dark recesses of their desks.

Kate Bischoff is an energetic and enthusiastic human resources professional, employment/labor law attorney, and technology aficionado. She loves HR and wants to make companies better – not just compliant. To read more from Kate, find her HR-related posts here: http://www.ultimatesoftware.com/blog/author/katebischoff/

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Using Payroll Software to Alleviate Tax-Time Woes https://blog.ultimatesoftware.com/payroll-software-simplify-taxes/ https://blog.ultimatesoftware.com/payroll-software-simplify-taxes/#comments Fri, 28 Apr 2017 01:05:25 +0000 https://blog.ultimatesoftware.com/?p=990 Just like how February is for sweethearts and November is for feasting, for many Americans, April is synonymous with one thing: filing taxes. Depending on your personal and financial situation, the process can be relatively smooth or plagued with technicalities, and the same is true for businesses. If you’re a small company with a few […]

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Just like how February is for sweethearts and November is for feasting, for many Americans, April is synonymous with one thing: filing taxes. Depending on your personal and financial situation, the process can be relatively smooth or plagued with technicalities, and the same is true for businesses.

payroll softwareIf you’re a small company with a few local employees, it’s possible that your tax services process can be reasonably handled by an in-house employee. But for most businesses, managing employee taxes is an extremely complex endeavor, as you’ll need to manually navigate through thousands of tax jurisdictions—there are 7,000 in Pennsylvania alone—to assign the correct tax code for each employee. And the price of non-compliance is steep; in 2014, the IRS issued 6.8 million penalties related to employment taxes alone, costing US businesses $4.5 billion. For these reasons, it often makes more sense to use payroll software and services that can meet your organization’s unique needs while conserving internal resources and ensuring IRS compliance.

How Payroll Software Can Help

Some payroll solutions offer a comprehensive tax management feature to help businesses handle all tax and compliance computations, including withholding requirements, multi-state taxing rules and reciprocity, and more. All U.S. federal, state, and local tax regulations can be updated automatically, as well as Canadian federal and provincial/territorial regulations. And to simplify things even further, these solutions often leverage the latest geographic information systems to automatically determine the correct tax codes for employees.

As a result, tax information is processed quickly and accurately, simplifying the administrative process and mitigating compliance risk. Technology providers can even provide services to print, seal, and send you your year-end tax forms, ready for immediate distribution. For Ultimate Software, tax services are just another way we’ve designed our solution to put people first.

Service: Putting People—and Their Taxes—First

In addition to UltiPro’s strong payroll solution, service has always been a differentiating factor. In an industry where 7 out of 10 HR decision makers report regretting their HCM provider choice, Ultimate stands proud with a 95% customer satisfaction rate. We’re in the people business, and we treat our customers as partners for life. This means that you’ll work closely with one of our dedicated representatives—throughout the entire process—to define and implement the strategies that make sense for your company.

To learn more about how Ultimate’s HR, payroll, and talent management software can fulfill your human capital management needs, join us for a live UltiPro Web Demo on April 27, at 2:00 p.m. Eastern time.

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HR Compliance in a Legal Whiplash World https://blog.ultimatesoftware.com/hr-compliance-predictions/ https://blog.ultimatesoftware.com/hr-compliance-predictions/#respond Wed, 15 Feb 2017 11:00:45 +0000 https://blog.ultimatesoftware.com/?p=873 From time to time, we invite guest contributors to provide their personal perspectives about trending HCM topics. The views, opinions, and comments expressed below are solely those of the author and do not represent Ultimate Software. This post was commissioned by Ultimate Software and the author has or will receive compensation for their work. Guest […]

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From time to time, we invite guest contributors to provide their personal perspectives about trending HCM topics. The views, opinions, and comments expressed below are solely those of the author and do not represent Ultimate Software. This post was commissioned by Ultimate Software and the author has or will receive compensation for their work.

Guest post by Kate Bischoff, Employment Lawyer & HR Consultant

HR compliance is hard. Employers are subject to so many different laws that even the most seasoned HR practitioners can innocently overlook legal changes. Last year was a particularly fast-paced year for employment law changes. We saw so many different laws and minor tweaks that one would hope 2017 would slow this down just a smidge. Don’t hold your breath, HR, because 2017 promises to be just as fast and maybe even more confusing.

Watch the Locals

With the federal government in conflict over nominees, travel bans, and religious policies, state legislatures, county commissions, and city councils are busy bees. Sick and parenting leave, minimum wages, and scheduling rules are all under consideration by local lawmakers. Even Linn County, Iowa with just over 210,000 residents upped its minimum wage and continues to study whether it’ll increase wages even further.

Employers need to know what their local lawmakers are doing. The laws being made on local levels always differ from the eventual state or federal laws that follow. We may be forced to doing some fancy HR yoga to comply with both. If you want a voice, get involved through industry-specific organizations or local chambers of commerce, or by contacting lawmakers directly. Trust me, when HR has a say in making the law, compliance is easier.

Ice Your Legal Whiplash

HR complianceLast year was a whirlwind year for employment law at the federal level. The U.S. Department of Labor’s fiduciary rule, the “blacklisting” rule, and new overtime regulations among others had employers confused and working diligently to find ways to comply. Yet, it appears that only a few of the new federal laws will actually come to fruition. The fiduciary rule is now under review. The U.S. House of Representatives recently voted to repeal the “blacklisting rule.” And, the last-minute injunction imposed by a Texas federal judge remains in place on the overtime regulations. While we don’t know how the U.S. Court of Appeals for the Fifth Circuit will decide whether the salary-basis part of the new regulations is within the DOL’s discretion, it’s only natural that employers feel like they’re suffering from legal whiplash.

This feeling will likely continue. We’re almost a year away from filing a new EEO-1 pay report that the new Acting Chair of the EEOC dislikes. So, could this change? Maybe. The makeup of the ever-controversial National Labor Relations Board will change and, with it, the Board’s decisions on social media and respectful workplace policies will likely swing the other way too.  Get out your icepacks. We are likely in for a bumpy ride for awhile.

Count Your Sick Leave

For the last decade, employers have known that they need to provide some sort of paid time off (PTO) for employees. This PTO has included sick leave, vacation, and even time off to attend school conferences. But, PTO has not been a legal requirement for many employers until now. Chicago, Minneapolis, Trenton, and many others have all enacted new sick-leave ordinances with other localities considering enacting such ordinances soon. Employers have to ask themselves, Got sick leave?

The challenge with the new sick-leave laws is how to calculate the PTO. For example, in St. Paul, Minnesota, employees earn one hour of sick leave for every 30 hours worked. This calculation may be very different than the years-of-service method that determines the amount of PTO a full-time employee accrues under an employer’s policy. For HR, this means we have to be careful calculating earned PTO, and even reverse-engineer the amount of time offered to employees. Remember, employers can always pay more—even in sick leave—just never below.

Befriend an Employment Attorney

The only guarantee I can make for 2017 is that you’re going to need to know an employment law attorney. Employment attorneys are required to know the laws in their jurisdiction. The need to pay attention at city council meetings, attend hearings at state legislatures, or at the very least follow the #emplaw hashtag on Twitter to keep up are essential functions listed in our job descriptions. Meet us, let us buy you a donut or lunch, and ask us lots of questions to help keep you in compliance.

Kate Bischoff is an energetic and enthusiastic human resources professional, employment/labor law attorney, and technology aficionado. She loves HR and wants to make companies better – not just compliant. To read more from Kate, find her HR-related posts here: http://www.ultimatesoftware.com/blog/author/katebischoff/

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One-Stop Compliance Shop – Top 19 Compliance Resources https://blog.ultimatesoftware.com/one-stop-compliance-shop-top-20-compliance-resources-flsa-aca/ https://blog.ultimatesoftware.com/one-stop-compliance-shop-top-20-compliance-resources-flsa-aca/#respond Wed, 10 Aug 2016 21:27:43 +0000 https://blog.ultimatesoftware.com/?p=663 Whether preparing for upcoming Fair Labor Standards Act (FLSA) changes or planning for the next Affordable Care Act (ACA) deadline, compliance issues can make or break an organization. At SHRM 2016, we launched our #PeopleFirstPodcast in an effort to help HR professionals thrive in their careers and in the HCM cloud. We know that one […]

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Whether preparing for upcoming Fair Labor Standards Act (FLSA) changes or planning for the next Affordable Care Act (ACA) deadline, compliance issues can make or break an organization.

At SHRM 2016, we launched our #PeopleFirstPodcast in an effort to help HR professionals thrive in their careers and in the HCM cloud. We know that one important aspect of HR is keeping organizations compliant with increasingly changing regulations locally, nationally, and globally. To that end, Episode 4 discusses The Impact of Compliance on the Business. Listen here: http://www.ultimatesoftware.com/Compliance-and-Benefits-Podcast

In this episode, Sharlyn Lauby, the HR Bartender, and Maria Luther, Director of Compliance for Ultimate Software, discuss important issues such as how to strategically prepare for compliance changes. Maria explains how she grades risks in a risk assessment before determining the best ways to prepare, as well as determining implementation and preparation timelines. She also shares the role technology, mobile, and self-service features play in compliance. The 15-minute episode ends with a more serious discussion on cyber security.

Mentioned in the podcast, here are 19 of our favorite compliance resources—including information from SHRM, HR influencers who are compliance experts, employment lawyers, additional resources discussed during the episode, and a few others to round out the list!

Our 19 Favorite Compliance Resources

  1. #PeopleFirstPodcast Episode 4 – The Impact of Compliance on the Business – Ultimate Software
  2. New Report: Understanding the Final FLSA Overtime Rules and How to Prepare – Ultimate Software
  3. Breaking Down FLSA Overtime Changes Infographic – Ultimate Software
  4. ACA Resource Center – Ultimate Software
  5. ACA Planning 2016 and Beyond – Ultimate Software
  6. Navigating the PPACA – Ultimate Software
  7. Compliance for Federal Contractors – Ultimate Software
  8. An Overview of the New FLSA Overtime Rules – Ultimate Software
  9. New FLSA Overtime Rules: How to Develop and Effective Communication Strategy Webcast – Ultimate Software
  10. Drug testing employees post-accident is going to get harder starting in August (OSHA) – Michael Haberman, Omega HR Solutions, Inc.
  11. #SHRM16 Report Day 3 – Focus on the FLSA – Michael Haberman, Omega HR Solutions, Inc.
  12. FMLA, Termination and the ADA – Michael Haberman, Omega HR Solutions, Inc.
  13. HR Intel – The Calm Before the Wage and Hour Storm – SHRM, Michael Jacobson
  14. FLSA Answers – SHRM, Rue Dooley
  15. Here are the 3 biggest workplace compliance concerns for the next year? No. 2 will shock you! – Eric B. Meyer, The Employer Handbook
  16. Social Recruiting and Record Keeping (OFCCP) – Kate Bischoff, Employment Law Navigator
  17. HR Compliance: Shooting the Messenger – Kate Bischoff and Judy Langevin, Employment Law Navigator
  18. Exemptions for Executive, Administrative, Professional, Outside Sales and the Fair Labor Standards Act – US Department of Labor, Wage and Hour Division
  19. FLSA Overtime Rule Resources – SHRM

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An Overview of the New FLSA Overtime Rules https://blog.ultimatesoftware.com/flsa-overtime-rules/ https://blog.ultimatesoftware.com/flsa-overtime-rules/#respond Tue, 02 Aug 2016 15:33:20 +0000 https://blog.ultimatesoftware.com/?p=647 The U.S. Department of Labor (DOL) recently announced changes to overtime rules under the Fair Labor Standards Act (FLSA). These changes stand to impact millions of employees across the country, and it’s important for organizations to understand the rules, as well as the proactive measures they can take today to remain competitive and compliant. Let’s […]

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The U.S. Department of Labor (DOL) recently announced changes to overtime rules under the Fair Labor Standards Act (FLSA). These changes stand to impact millions of employees across the country, and it’s important for organizations to understand the rules, as well as the proactive measures they can take today to remain competitive and compliant.

Let’s take a closer look at these updates and their potential impact.

What’s Changing and When
Generally, there are three requirements that must be met for an employee to be exempt from overtime and minimum wage. If an employee is:

  • Considered an executive, administrator, professional, or outside salesperson—Duties Test
  • Paid on a salary or fee basis, except for outside-sales employees—Salary Test
  • Paid at a minimum rate of $455 per week for a regular employee or $100,000 per year for a highly compensated employee (HCE)—Threshold Test

Effective December 1, 2016, the threshold will increase to $913 per week for regular employees and $134,004 per year for HCEs, and will adjust every three years beginning on January 1, 2020. Additionally, employers may not count incentive pay—nondiscretionary bonuses of up to 10% of employees’ salaries, for example—toward meeting the new threshold. Certain employees, such as doctors, lawyers, and teachers, are statutorily exempt from the minimum wage and overtime requirements. Other classes of employees (e.g. software developers and computer engineers) have a different threshold amount of $27.63 per hour, if they are paid hourly.

Organizations Have Options
Employers have two options for navigating these changes: 1. Increase impacted employees’ salaries to meet the new threshold, or 2. Reclassify impacted employees to non-exempt and begin tracking their time. As part of their due diligence, employers will need to analyze compliance requirements, cost components, pay-structural changes, and strategy for communicating with employees. Most employers will find that the right strategy for them is a combination of these.

Once a strategic decision has been made on how to comply with the new rules, administrative considerations come into play, including:

  1. Is it necessary or beneficial to create new pay codes for reclassified employees?
  2. Has enough time has been set aside to establish such codes and ensure proper data feeds?
  3. Will reclassified employees lose eligibility for benefits tied to salaried or hourly status?
  4. Is it better to reclassify employees to salaried non-exempt status rather than hourly status (i.e., pay overtime on top of regular salary) to limit benefit or morale repercussions?
  5. Have preparations been made to transition employees to using time-tracking systems?

Additional Costs, Compliance to Consider
Employers should make sure they take into account other costs associated with the overtime-rule changes. These costs may include:

  • Employer taxes: FICA (employer portion of Social Security and Medicare tax), state and federal unemployment, employer-paid state disability taxes, workers’ compensation, or local business taxes (Oregon tri-county metro tax, for example)
  • Employee-benefit costs attached to salary: 401(k) matching contribution, life-insurance premium, or Health Reimbursement Account matching
  • Administrative costs: time and attendance administration, as well as additional processing time for timesheet approvers and payroll professionals

Finally, other preparations should be made to ensure employers avoid unintended consequences. For instance, employers should consider making pay-rate or reclassification changes effective the first day of the pay period, so as to avoid prorated calculations. It may also be beneficial to review employees’ job duties to ensure they meet the aforementioned Duties Test. Note that it’s common for employees to be paid above the threshold but still fail the Duties Test, resulting in a DOL fine.

A Proactive Approach
While employers have several months to prepare for these changes, now is the time to begin planning in order to mitigate the impact on their people and their organization as a whole.

For more information on ways to navigate the updates, check out Ultimate Software’s new infographic below, “Breaking Down FLSA Overtime Changes,” and download our whitepaper, “Understanding the Final FLSA Overtime Rules and How to Prepare.”

How is your organization planning for the Fair Labor Standards Act (FLSA) changes? Check out this infographic and blog post to see how you can start preparing for compliance.

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The Excise, “Cadillac” Tax – Start Thinking Ahead https://blog.ultimatesoftware.com/the-excise-cadillac-tax/ https://blog.ultimatesoftware.com/the-excise-cadillac-tax/#respond Wed, 04 Nov 2015 17:50:15 +0000 https://blog.ultimatesoftware.com/?p=386 The Affordable Care Act’s Excise Tax is coming January 1st, 2020, and applies to all employers—including small businesses, tax-exempt organizations and government entities. It may seem as though 2020 is a long way off, but it’s never too early to begin planning for your organization’s compliance needs. Some estimates indicate that as many as 60% […]

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The Affordable Care Act’s Excise Tax is coming January 1st, 2020, and applies to all employers—including small businesses, tax-exempt organizations and government entities. It may seem as though 2020 is a long way off, but it’s never too early to begin planning for your organization’s compliance needs. Some estimates indicate that as many as 60% of employers could be subject to this tax, which is sometimes referred to as the “Cadillac tax” since it targets high-cost health coverage, unless they make changes to their plans before it goes into effect. There are many differing opinions on the value of this controversial aspect of the ACA, with many economists and government agencies believing it is a necessary provision to support healthcare reform, and many politicians and employers believing it will have a net negative effect and calling for its repeal. As it stands, the Excise Tax is law, and the best thing you can do to prepare your business is to be informed.

This image shows the dollars that employers will have to spend on employee healthcare through the new excise or cadillac taxes detailed by the ACA starting in 2018.

By 2020, all employers will be responsible for employee healthcare coverage. Start preparing for the “Cadillac” tax now.

Essentially, the new rule sets a dollar limit on the total amount employers can spend on health care coverage for employees. Any excess costs above this limit during a “taxable period” will be taxed at 40% (non-deductible). In 2020, these limits are $10,200 for the year for self-only coverage, and $27,500 for family coverage (any coverage provided to an employee and at least one other beneficiary). These limits are slightly higher for retirees and high-risk professionals, and have been indexed to increase with inflation year over year as well. The “taxable period” is generally considered to be a full calendar year; though the language of the legislation does provide the IRS with the ability to prescribe different taxable periods for employers of varying sizes, this has not happened yet. The dollar limit is calculated on a monthly basis, using 1/12 of the annual amount. Calculations are based on the actual plan the employee is enrolled in, rather than the most expensive one offered to them. Exemptions exist for disability income insurance, liability insurance, workers’ compensation, automobile medical payment insurance, dental- and vision-only coverage, and a small number of other plans. However, any employer-sponsored plan that does not meet one of these exemptions may be subject to the tax, regardless of the size of the employer.

One major goal of the Excise Tax is to slow the rate of cost increase for healthcare across the market, which will especially benefit those in low-cost plans. It also aims to cap the amount of tax-free benefits that can be provided by employers, and generate revenue to offset some of the costs of the other aspects of the ACA. A Congressional Research Service report estimates that the tax will reduce healthcare expenditures nationwide by 3 to 4 percent, a savings of $60 billion by 2024, and estimates also show that the tax will reduce the deficit. Research on current health plans indicates that a large majority of covered employees will not be affected by the tax—the average employer-sponsored family plan comes in at 40% under the dollar limit that would be taxed. However, the Excise Tax has also come under fire across the political spectrum for placing an additional burden on employers that provide higher-tier health plans to their employees. The tax would not assist consumers with factors such as rising prescription drug costs, which contribute to a significant portion of health care spending. Many experts are also predicting that employers are likely to reduce health benefits for employees if they would otherwise incur the tax.

The IRS stipulates that the “coverage provider” is responsible for paying the tax. For fully-insured plans, the insurance company is responsible for the tax, though this is likely to be passed on to the employer. For Health Savings Accounts (HSAs) or Archer medical savings accounts (MSAs), the coverage provider is the employer. For self-insured plans, the person that administers the plan benefits is directly responsible, which will usually be the employer. In scenarios for which the employer is not the responsible party, costs are expected to be passed onto the employer. Insurance companies may also bill for a payment of the additional income tax incurred due to the Excise Tax reimbursement, because the tax is nondeductible.

The Excise Tax is perhaps the most controversial aspect of the Affordable Care Act, and several factors are still yet to be finalized and subject to change. For example. final regulations are likely to provide limit adjustments for the age and gender of the covered employee if they differ substantially from the national workforce average. As always, Ultimate Software will stay at the forefront of the legislative landscape and continue to offer updates and services to help your business remain compliant with the ACA.

For more information, take a look at our Demystifying Healthcare Reform volume on the Excise Tax.

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Navigating the Patient Protection and Affordable Care Act https://blog.ultimatesoftware.com/ultimate-affordable-care-act/ https://blog.ultimatesoftware.com/ultimate-affordable-care-act/#respond Tue, 02 Jun 2015 14:50:04 +0000 https://blog.ultimatesoftware.com/?p=278 Healthcare reform is here, and more is coming soon. With the Patient Protection and Affordable Care Act kicking into full swing, now is the time to ensure that your organization is 100% compliant and ready. At Ultimate, we’re harnessing our expertise and adaptability to provide businesses with the tools they need to face any challenges […]

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Healthcare reform is here, and more is coming soon. With the Patient Protection and Affordable Care Act kicking into full swing, now is the time to ensure that your organization is 100% compliant and ready. At Ultimate, we’re harnessing our expertise and adaptability to provide businesses with the tools they need to face any challenges that pop up along the way.

These changes to the landscape are complex, and will involve many different areas of your organization. Many of the important provisions of the ACA, such as the “pay or play” requirement for employers and the individual insurance mandate, are already in effect right now. Employers that are not providing adequate essential coverage to all full-time employees can already be penalized if the coverage isn’t offered to all qualifying employees or the coverage does not meet affordability and value requirements.

Starting in 2016, applicable large employers (or ALEs—those with 50 or more full-time employees) are also required to report compliance information to the IRS each year. Companies that exhibit a good faith effort in 2015 to meet these reporting requirements will not be penalized. However, any organization that does not report on 2015 employee coverage information can face a penalty of $250 per each complete return they fail to file (capped at $3 million). Moreover, there will be a $250 penalty for each missing payee statement (capped at $3 million). IRS Form 1095-C and transmittal page Form 1094-C are used for this reporting and must be filed by February 29, 2016 (or March 31, 2016, if filed electronically).

UltiPro makes it easier for businesses to be ready for the Afforadable Care Act and Patient Protection

We recognize the challenges businesses may face in adapting to these new requirements. That’s why we’re working tirelessly to help. With each new release of UltiPro, we’re targeting the most pressing issues for HR professionals and business owners with ease-of-access and streamlined reporting at every step. Right now, UltiPro can automatically analyze employee hours of service to rapidly determine full-time status, track hours over a variety of time periods for your entire workforce, and present the relevant data for all of your impacted full-time employees in one Healthcare Eligibility Dashboard. Specially-crafted reports can show you at a glance which employees are eligible and ineligible for coverage, as well as whether or not it is currently being offered to them. Beginning with our spring 2015 release, UltiPro will feature new tools that make it even easier to collect, review, and correct this eligibility and coverage data for ALEs before reporting it to the IRS. Critical information for Form 1095-C will be able to be stored directly in UltiPro’s records or easily imported from Excel. In UltiPro’s summer 2015 update, we’re adding the functionality to collect employees’ consent to receive their Form 1095-C electronically, along with a new template for capturing monthly information. Finally, our fall 2015 release will enable the import of previously collected data for Form 1095-C, the ability to generate and print Forms 1095-C and 1094-C, and new business intelligence reports to make completing these forms accurately even simpler.

When it comes to navigating healthcare reform, Ultimate’s work doesn’t end there. In 2016 and beyond, we’ll continue to simplify compliance, data collection, and reporting for employees and employers throughout the United States. For more information on healthcare reform and what UltiPro can do to help your organization, check out our Healthcare Reform Law Resources page.

 

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