EMPLOYMENT LAW SURVEYS HUMAN RESOURCES TRAINING

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APRIL 2014

Part XVIIII: Key Aspects of Employer Mandate Final RuleDiane Waters, Employment Law Services

The IRS recently published final regulations implementing the employer mandate of the Affordable Care Act. The mandate applies to applicable large employers (ALEs) - those with 50 or more full-time (FT) or full-time equiva-lent (FTE) employees. Given the complexity and number of topics addressed in the final regulations, this article is limited to high-lighting some of the key transitional relief and clarifications affecting employers. More detailed guidance is available on our Health Care Reform Learning Zone. We also will host a webinar discussing the impact of the final regulations on April 2, 2014.

Key transitional relief includes:

ALEs with more than 50, but fewer than 100 FT Employees: the employer mandate is delayed until the first day of the plan year beginning in 2016, provided the employer does not try to take advantage of the delay announcement by:

• reducing the size of its workforce or cutting employees’ hours in the period from February 9 to December 31, 2014; and

• making adverse changes to the group health plan or reducing coverage in the period from February 9 through December 31, 2014 (or for non-calendar year plans, from February 9 through the last day of the plan year that begins in 2015).

ALEs with 100 or more FT Employees: to avoid the §4980H(a) penalty for failing to offer coverage ($2,000 per FT employee), employers

were required to offer coverage to 95 percent of their FT employees and their dependents. For 2015 only, the final regulations phase in this penalty by reducing the coverage threshold from 95 percent to 70 percent and reducing the number of FT employees subject to the penalty by 80, rather than 30. Employers who satisfy the 70-percent threshold remain subject to the §4980H(b) penalty ($3,000 for each FT employee who purchases subsi-dized coverage through an Exchange and was either not offered coverage or the coverage did not satisfy minimum value or affordability requirements).

ALE Measurement Period: For 2014, employ-ers may use a six-month measurement period to determine whether they are an ALE.

The final regulations also make these important clarifications:

• Step children and foster children are not included as “dependents”;

• Bona fide volunteers for government or tax-exempt organizations (e.g., volunteer fire-fighters) will not be considered FT employees;

• Teachers and other educational employees will not be treated as part-time simply because school is closed for the summer;

• Employers may use reasonable methods to calculate hours of service of adjunct faculty, they can credit adjunct faculty with 2 ¼ hours of service per week for each hour of classroom

Continued on page 4

Page 1Key Aspects of Employer

Mandate Final Rule

Page2 Mentoring Strategy for Success

When Employees (Suddenly) Leave

Page 3 Managing Remote Workers

You Asked:What is Job Abandonment?

Page 4 Bridging Generational Differences

Page 5 Is Obesity a Disability?

Public Employers: Colorado Open Records Act

and Workplace Investigations

Page 6 Survey News

The Bulletin April 2014 MSEC.org2

Mentoring Strategy for SuccessVenita Bellen, Human Resource Services

Interest in mentoring programs has fluctuated over time due to economic and social factors. Changing demo-graphics such as greater numbers of women and minorities in the work-force and automation due to technical advances are examples of conditions that have caused businesses to use mentoring to develop necessary skills and competencies.

Recently, flatter organizational struc-tures have challenged businesses to provide sufficient growth opportuni-ties for employees. In addition, today’s labor force participation rate for per-sons 55 years of age and over is only 39.8 percent—its lowest since April 2009—and the decline is projected to continue. The Baby Boomers’ depar-ture from the workforce, coupled with the fact that generations fol-lowing the Boomers are significantly smaller, signals the loss of institutional and industry knowledge, and criti-cal skills and competencies necessary for long term business viability and competitiveness.

To counter these pressures, businesses are once again turning to mentoring to develop talent pools for succession planning, instill new skills and com-petencies, and transfer institutional knowledge. A study by Ellen Ensher, author of Power Mentoring: How Suc-cessful Mentors and Protégés Get the Most out of Their Relationships, found that 70 percent of major companies have mentoring programs.

For companies looking to initiate mentoring programs, experience and research suggest the following best practices:

• Select the right mentor. Not every-one can be a good mentor. A mentor is someone who is respected, success-ful, and understands the culture of the organization.

• Ensure proper pairing of men-tors and mentees. Assessment tools that address communication styles, strengths, and limitations can help make good matches.

• Educate both parties on their roles. Clarify that the mentor’s role is to coach and advise, not to interfere with a supervisor’s or manager’s decisions. The mentee, while expected to seek the mentor’s advice, particularly on critical issues, is not bound to follow it.

• Preserve confidentiality in the rela-tionship. Both parties need to feel confident that discussions remain between them and are not shared with a supervisor or manager.

• Clarify logistical issues at the onset; for example, preferred communication methods, time commitments, and any time limits on the mentoring period.

• Build openness and respect. Educate parties on receiving and delivering feedback.

• Establish a professional relationship. The relationship between the mentor and his or her mentee should be pro-fessional, not personal.

Continued on page 7

When Employees (Suddenly) Leave Denise Fazio, Human Resource Services

When an employee leaves your organization, your pri-mary objectives should be maintaining confidentiality about the employee’s departure, protecting your organiza-tion from potential litigation, and providing remaining staff the information they need to continue meeting their job responsibilities.

Remaining staff may be curious about why a co-worker has left, particularly if it appears to have been sudden. However, curiosity does not constitute a need or right to know any-thing more about why the co-worker left. What remaining staff do need to know is the impact on them and their work, such as who will be the point of contact going forward and whether the just-vacated position will be backfilled or if other staff will have to pick up the former co-worker’s responsibili-ties on a short- or a long-term basis. The message from the manager should be as simple and direct as, “Jack is no longer with the company effective yesterday, and Jill and Jane will be handling his primary responsibilities until we can hire a

replacement. If something comes up and you are not sure who to bring it to, please feel free to come to me.” Being brief and to the point minimizes potential confusion and protects the company from a possible defamation charge from the former employee, if the termination was involuntary. Main-taining confidentiality concerning the employee’s departure assures remaining staff that their personal business will also be treated respectfully and confidentially.

A note of caution: Be careful to ensure your verbal and non-verbal messages are congruent. You want to be matter-of-fact in the delivery of your verbal message, and you do not want your affect or tone of voice to communicate a different mes-sage. Be sure, too, you communicate promptly with those who need to know.

Some organizations send out broadcast emails when employ-ees leave for their next “opportunity” and when they retire. However, sending emails for those who leave voluntarily can

The Bulletin April 2014 MSEC.org

The Bulletin April 2014 MSEC.org 3

What is Job Abandonment?Tina Harkness, Membership Development

Job abandonment describes a situ-ation where the employee leaves work with no intent to return without resign-ing first. Employers can sometimes infer the employee’s intent to resign by his or her actions like packing up per-sonal items or leaving keys behind, but often the employee just stops showing up, leaving the employer in the lurch and wondering.

If this occurs at your organization, you should not automati-cally assume that a no-call, no-show is job abandonment. The employee may not be able to contact the employer due to a medical concern or some other crisis—potentially impli-cating the Family and Medical Leave Act or the Americans with Disabilities Act.

Instead of assuming the employee has resigned, you should investigate further using the avenues available to you. At a minimum, your investigation should include attempting to contact the employee. If the employee does not respond or cannot be reached by phone or email, send a letter to the employee’s last known address documenting your efforts to reach him or her and directing the employee to contact you by a specified deadline. Include in the letter that employ-ment will be terminated if you do not hear from him or her by that time.

Many employers develop “no-call, no-show” policies desig-nating a number of days of absence that will be considered job abandonment. Three days is the common number cho-sen, although no federal or state law dictates this amount. Three days gives the employer a reasonable amount of time to look into the employee’s absence and the employee a chance to respond prior to termination. Once the no-call, no-show deadline has passed, employers should act promptly to complete their termination procedures.

Employers understandably view job abandonment situ-ations as voluntary terminations. However, they should appreciate that state laws governing final pay and unem-ployment benefits may view this differently. When an employer has heard nothing from an employee, it is gener-ally best to pay his or her final paycheck following the state’s requirements for an involuntary termination. When respond-ing to unemployment claims, employers should include the facts leading up to the employee’s job abandonment so that the state has the information it needs to award or deny benefits.

Managing Remote WorkersMark Cicotello, Human Resource Services

In his book Good to Great, Jim Collins told us to put the “right people on the bus.” According to an Employment Rela-tions Today article by Michelle LaBrosse, “you also need to hire people who can succeed in a virtual work environment.” With telecommuting and flexible work arrangements on the rise, how do employers and employees work together to ensure this emerging relationship stays healthy? We’ll examine the issue from both perspectives and offer a few suggestions.

For employers, the array of telecommuting and flexible work arrangements is vast, and choosing what would be effective and employee-friendly is tricky. The primary goal of any work arrangement is getting the work done. This means focusing on results vs. managing activities. This puts more pressure on managers than employees. An ineffec-tive manager managing an office staff is going to be just as ineffective managing a remote staff. I had a conversation with a mid-level manager in a high-tech firm who manages a virtual team. She had this advice for employers of remote workers:

• Train the managers of virtual workers. They must get very comfortable managing by objective.

• Fully enable your virtual workers and pay for Internet access, phone lines, and equipment.

• Ensure that virtual workers have some face time (e.g., she does a day in the office once a month).

• Train teammates of virtual workers—assuming some of the team are co-located. Ensure virtual colleagues are not left out of hallway decisions. In addition, conference- call etiquette has to change.

Good advice.

For employees, one of the problems with working at home is ... working at home. In a life-meets-work article titled “Tips for Working Remotely,” the author provides practical sugges-tions for employees who chose to work near their couches:

• Set limits for work,

• don’t watch the kids and work

• set boundaries around household duties, and

• groom yourself.

Again, good advice. Lacking such discipline, work focus can drift.

Continued on page 7

The Bulletin April 2014 MSEC.org4

time and 1 hour of service for each non-teaching hour worked (e.g., faculty meetings). This is available until the end of 2015.

• Seasonal employees (now defined as individuals work-ing in positions where the customary annual employment is six months or less) generally will not be considered FT employees;

• Most employers may treat employees rehired after a break in service of at least 13 weeks as new hires. For educational institutions, the break in service requirement remains 26 weeks.

The final regulations contain numerous other provisions, transition relief, and safe harbors that employers must con-sider carefully as they review and modify their compliance strategies.

The IRS also recently published final regulations on how employers report information the IRS needs to enforce the employer mandate. A fact sheet on the §6056 and §6066 reporting requirements is available here.

Health Care continued from cover

Bridging Generational DifferencesShelley Blackman, Arizona Regional Office

“Children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chat-ter in place of exercise. Children are now tyrants, not the servants of their house-holds. They no longer rise when elders enter the room. They contradict their par-ents, chatter before company, gobble up dainties at the table, cross their legs, and tyrannize their teachers.”

You probably think this quote describes the youth of today. It may surprise you to learn then, that it is attributed to Socrates in 5th century B.C.! It con-firms how invariably throughout the centuries, each generation has held mis-conceptions of other generations. Now that we have four generations in the workplace, these misconceptions play out among workers, at times resulting in conflict and lost productivity.

According to the Bureau of Labor Sta-tistics, Generation X and Y represent 57 percent of the workforce, Baby Boomers 38 percent, and the Mature/World War II generation 5 percent. A 2007 survey by Lee and Hecht Harrison found that “70% of older employees are dismis-sive of younger workers’ abilities and nearly half of younger employees are

dismissive of the abilities of their older co-workers.” That said, there are studies that indicate people are more alike than different, regardless of generation. In her book, “Retiring the Generation Gap”, Jennifer Deal concludes that each gen-eration places family, integrity, love, and spirituality as top values. What is differ-ent is how we demonstrate these values through our behavior.

Companies that recognize the genera-tional demographics of their workforce and proactively manage the strengths that each generation offers will create a culture of understanding, respect, and collaboration. This leads to competitive advantage through increased employee retention and engagement. Employers can start by using the company’s mis-sion and values to create a culture that encourages generational understanding and curiosity. Companies with mission-based hiring processes typically find fewer generational issues as employees are more committed to the organiza-tion’s goals.

All generations share a desire to learn. Perceptive organizations build training programs to help employees of all ages better understand generational- diversity

issues. These programs lead to increased awareness and dialogue. Traditional mentoring programs can ensure the transfer of institutional knowledge to the next generation of leaders. A new concept of “reverse-mentoring” is also showing promise. Proctor & Gamble and Siemens have set up tutoring for middle-aged executives with college-hires in the mentor role. The focus of the relationship is the knowledge transfer of technology skills.

Benefits are important to all employees and affect job satisfaction. The type of benefit each generation values, how-ever, can be very different. Employers who offer a menu of appealing flexible benefits have more success attracting and retaining key performers from all generations.

There is no one-size-fits-all when managing a multi-generational work-force. Creating formal and informal mechanisms to support and promote generational understanding will enable employers to successfully recruit, engage, retain, and manage employees from all generations.

The Bulletin April 2014 MSEC.org

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Colorado Open Records Act and Workplace Investigations Jody Luna, Specialized Legal Services

As a public employer in Colorado, do you understand when personnel information must be released pursuant to a Colo-rado Open Records Act (CORA) request? Does CORA require you to release an investigation report to the subject of the investigation? What if the media make a request in the “public interest”?

CORA is a complicated law, and its provisions can be confus-ing. For example, CORA contains lists of documents that are only available to the employee, and other documents that are available to the public. The difference between these documents can be minor. Unpublished decisions from the Colorado Court of Appeals discussing documents from inves-tigations provide some clarity, stating that public employers must release investigation reports to the “person of inter-est,” which is the subject of the investigation. The court has allowed employers to redact certain information in the report that was private to other individuals. In high-profile cases when the court has ruled that CORA requires release of an investigation report to the media, it has also allowed redaction of the names of participants. Other cases provide guidance for public employers faced with CORA requests for documents containing an employee’s personal information.

Even with these rulings, there are no easy answers to CORA questions. That is because no two cases are identical, and the determination of whether information must be released is made on a case-by-case basis. Courts have to weigh the requestor’s interest in disclosure of the documents against the government’s interest in keeping the documents confidential.

With limited case law to guide a uniform response to CORA questions, your best approach is to seek advice from your attorney. In the event you have to defend a decision to release or not release documents, your attorney needs to be involved at the outset.

Is Obesity a Disability?Barbara Wyngarden, Employment Law Services

The Centers for Disease Control and Prevention estimates that more than one-third of U.S. adults (35.7 percent) is obese. This figure has increased dramatically in the last 20 years. In July 2013, the American Medical Association (AMA) adopted a new policy officially labeling obesity as a disease. The AMA’s action may affect how courts analyze whether obesity is a disability under the Americans with Disabilities Act (ADA).

When the ADA passed in 1990, the Equal Employment Opportunity Commission (EEOC) took the position that obe-sity was not a disability, but that severe or morbid obesity could be. In 2012, the EEOC settled two disability discrimi-nation lawsuits with obesity as the alleged disability. These cases offer insight on how the EEOC will be looking at obesity going forward.

In the first case, the EEOC sued the employer for discriminat-ing against Lisa Harrison because of her disability and for regarding her as disabled. EEOC v. Resources for Human Devel-opment, Inc. (E. D. Louisiana 2012). Harrison was responsible for overseeing a day care program at a long-term residen-tial treatment facility for chemically dependent women and their children. Harrison weighed 400 pounds when she was hired and 527 pounds when she was terminated eight years later. The EEOC alleged that RHD terminated Harrison due to her obesity despite the fact that she was able to perform her job duties. Harrison passed away two years after her termina-tion of “morbid obesity.” The court held that Harrison’s severe obesity—body weight of more than 100 percent over the norm—was an ADA disability. The court also said that if an individual is severely obese, there is no requirement that it be caused by a physiological disorder. RHD settled for $125,000 following this ruling.

The EEOC brought the second case on behalf of materials handler Ronald Kratz II, alleging his employer terminated him due to his disability and regarded him as disabled. EEOC v. BAE Systems Tactical Vehicle Systems, LP (D. Texas 2012). Most of Kratz’s job involved working at a desk, but approxi-mately 10 percent of his work was performed while standing or driving a forklift. BAE terminated Kratz after 15 years of employment because it felt he could no longer perform his job duties due to his weight—680 pounds. Kratz requested a transfer in lieu of termination, but BAE refused. The EEOC accused BAE of failing to discuss with Kratz whether reason-able accommodations were possible that would allow him to continue in his job. BAE settled, agreeing to pay Kratz $55,000 and provide him six months of outplacement ser-vices. The settlement required BAE to conduct training on EEO compliance, disability discrimination law, and reasonable accommodation.

The AMA’s designation of obesity as a disease may affect the EEOC’s approach and courts’ analysis of obesity as a disability. In adults, obesity is determined using the Body Mass Index or

BMI. An adult with a BMI of 30 or greater is considered obese. The lesson for employers is not to count obesity out when it comes to the ADA. Always conduct an individual analysis to determine if the employee is substantially limited and con-sider potential accommodations. Employers should also take care to avoid regarding an obese employee as disabled, and only base employment decisions on information, not specu-lation or perceived limitations.

The Bulletin April 2014 MSEC.org

Survey Highlights:Using Salary Surveys … Especially MSEC Surveys!The Surveys Department is in the midst of collecting data for the annual Bench-mark Compensation Survey. This survey collects data for more than 400 positions including information technology and executives. Why is it important as a mem-ber to participate? It is a time-consuming task but the benefits are worthwhile.

Labor market data can have a significant impact on the decisions employers make when designing and administering their compensation programs. The most objective and reliable sources available for these data are salary surveys. Most often, employers use salary surveys to evaluate the competitiveness of their overall pay plan or their pay for a particular job within the plan. Employers can also identify geographic pay differences for similar jobs, discover trends for pay planning, anticipate pay increases for budgeting, and validate their internal job hierarchy.

MSEC collects salary data based on job descriptions. Chances are surveys collect-ing data based solely on job titles will have erroneous job matching, meaning bad data. MSEC is a reputable publisher of market data because all data are vali-dated and updated on a regular basis. The more participants in the survey, the more reliable the market data will be for making compensation decisions.

Contact the MSEC Surveys Department if you have not received your question-naire packet or invitation email to participate in this valuable, annual report. 2014 Union Wage Increases Down from 2013First-year union wage increases, collectively bargained in 2014, for all industries without lump sums factored were 1.7 percent. This is down from the 2.4 percent reported in 2013. Manufacturing was the only industry reporting an increase with 2.1 percent reported for 2014 compared to 1.8 percent in 2013. When lump sum payments were included, the all-industries average for first-year wage increases in 2014 was 1.9 percent, compared to 3.1 percent in 2013. The following data was published by the Bureau of National Affairs.

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Survey News

To request copies of the surveys, please con-tact the MSEC Surveys Department. Copies of these resources are available to authorized personnel of MSEC members. Call 800.884.1328, email surveys@msec.org, or go online to MSEC.org.

Notice of Surveys Being ConductedColorado Compensation Survey Briefing SessionFinal results of the Colorado data from the benchmark compensation survey will be presented at the annual briefing ses-sion on June 10 or 23, 2014 in Denver. An economist from the Colorado Legislative Council will also present a Colorado eco-nomic overview at the Denver programs.

Results from the Colorado data will also be presented on June 17 in Glenwood Springs, July 17 in Fort Collins, and Sep-tember 25 in Colorado Springs. There is no charge for these sessions, but space is limited.

Register today for a program date: call 800.884.1328, email registration@msec.org, or go online to MSEC.org

Special Studies

Ultrasound Supervisor & Manager Health Care Industry 7 organizations. 06C/13

Education Requirements for Activities Director Senior Services Industry 4 organizations. 01A/14

Sterile Processing Techs I & II Health Care Industry 9 organizations. 02A/14

Retirement Health Savings Accounts Selected Public Employers 8 organizations. 05A/14

First-Year Average Wage Increases (Lump Sums not Factored)2014 2013

All Industries 1.7% 2.4%

Manufacturing 2.1% 1.8%

Non-Manufacturing (w/o Construction)

2.2% 3.8%

Construction Insufficient Data 3.3%

First-Year Average Wage Increases (Lump Sums Factored)2014 2013

All Industries 1.9% 3.1%

Manufacturing 2.9% 2.4%

Non-Manufacturing (w/o Construction)

2.4% 5.2%

Construction Insufficient Data 3.3%

The Bulletin April 2014 MSEC.org

The Bulletin April 2014 MSEC.org

Unemployment rates and Consumer Price Index (CPI) and Employment Cost Index (ECI) data for-merly provided in the Bulletin are available on the U.S. Bureau of Labor Statistics website at www.bls.gov. Contact our Surveys Department at 800.884.1328 or surveys@msec.org for assistance.

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Remote Workers continued from page 3

Telework and flexible work arrangements not only trans-form the way work gets done but also the very nature of the employee-employer relationship. The trend or move-ment to these arrangements is quickly becoming the rule vs. the exception. A phased approach is recommended for employers considering if and what kind of arrangement is appropriate. A World at Work article recommends four steps:

• Investigation - conduct a survey to identify existing tele-work practices, attitudes, benefits, and concerns.

• Design - use the data collected to identify what types of telework and other flexible work schedules will be available.

• Implement - train all employees on how to use the pro-gram and access program information.

• Support and Growth – fine tune training, documents, policies, and procedures to address concerns that popped up during implementation.

advertise that someone did not leave voluntarily because a farewell email was not sent. Admittedly, there may be some exceptions such as the CEO retiring after 15 years’ service. However, exceptions, or extraordinary events, should be just that.

Don’t forget to inform your external customers who may have worked with the former employee. The process should be similar. Maintain confidentiality about the employee’s depar-ture, protect the company from potential litigation, and let customers know who will be serving them going forward. You may need to reassure customers by letting them know your organization could be making some changes in the

interest of better meeting their needs, while also not suggest-ing the departing staff member was let go (involuntarily, for example) to further this objective. Focus on the present and future; namely, what the customer needs or wants and how you will meet those needs or wants going forward.

These situations are not easy, but you can make them less stressful on you and others by keeping your message simple and straightforward and by focusing on moving forward.

When Employees Leave continued from page 2