All posts by Michael J. O'Brien

Should HR Merge with RE?

Google and Facebook are both known for their innovative workplace policies on everything from hiring to parental leave.

A new post on JLL, however, offers those two organizations as a model for something else entirely: blending an organization’s HR and corporate real estate functions.

Google is already known for turning established thinking on its head when it comes to workplace design and policies, says Marie Puybaraud, global head of workplace research at JLL. “Its new £1 billion London campus features sports facilities some gyms can only dream of with a rooftop running track and a half Olympic sized swimming pool which act as a prime attraction for recruiting new talent, not to mention retaining existing employees.”

“Google’s high-end facilities are a physical demonstration that the organization is focused on looking after its staff,” continues Puybaraud. “Job-seekers will start to see such facilities as a benchmark —and all employers will put greater thought into how they use the quality of life at work as a way or recruiting and motivating staff.”

Meanwhile, the piece notes, Facebook’s new corporate village will include 1,500 apartments as well as a grocery store and offices. “The company is using its physical facilities to provide for its staff in ways which clearly go far deeper than the normal working relationship,” explains Puybaraud. “It is only when Real Estate and HR work seamlessly together that they can deliver such projects.”

Indeed, real estate teams suggesting such recreational facilities may well struggle to get them past the board without the backing of their HR colleagues. Equally, HR teams may be looking for new ways to increase engagement among staff yet may struggle with the practicalities of developing ambitious plans that require a rethink of current office space while working in a silo.

According to Puybaraud, if an organization’s workers are more engaged and fulfilled at work, they’re more likely to develop better relationships with colleagues and put more into their work. For companies, it equates to better productivity and lower turnover of staff., which is a key reason why more companies will merge their HR and Real Estate teams in the coming years.

“More businesses will realize how closely productivity follows on from deep level employee satisfaction,” Puybaraud says. “We predict that joint HR / Real Estate teams will be commonplace within a decade.”

Is your organization planning on merging HR with its real-estate functions? If so, we’d love to hear from you about the challenges and benefits of such a move.

New Guidance on Pay-Ratio Rule

In case you missed it, last week the Securities and Exchange Commission approved interpretive guidance to assist companies in their efforts to comply with the pay ratio disclosure requirement mandated by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Under the Commission’s rule implementing the pay ratio requirement, companies are required to begin making pay ratio disclosures in early 2018.

“It’s our priority to make sure that we implement disclosure rules mandated by Congress in a way that is true to the mandate and, to the extent practicable, allows companies to use operational data and otherwise readily available information to produce the disclosures,” said Chairman Jay Clayton.  “Today’s guidance on pay ratio reflects the feedback the SEC has received and encourages companies to use the flexibility incorporated in our prior rulemaking to reduce costs of compliance.”

In particular, the guidance:

  • States the Commission’s views on the use of reasonable estimates, assumptions and methodologies, and statistical sampling permitted by the rule;
  • Clarifies that a company may use appropriate existing internal records, such as tax or payroll records, in determinations about the inclusion of non-U.S. employees and in identifying the median employee; and
  • Provides guidance as to when a company may use widely recognized tests to determine whether its workers are employees for purposes of the rule.

The Commission’s staff is also providing guidance separately about the pay ratio rule.

“This additional staff guidance, which includes examples illustrating how reasonable estimates and statistical methodologies may be used, is intended to assist companies with their compliance efforts and reduce the costs associated with preparing disclosures,” said Bill Hinman, director of the division of corporation finance. “We encourage companies to contact the division staff if additional interpretive questions arise as the compliance date approaches.”

Another Coffin Nail for EEOC Merger?

After taking office in January, one of President Trump’s first orders of business was to act on a recommendation from the conservative Heritage Foundation, which recommended eliminating redundancies in the Labor Department’s Office of Federal Contract Compliance Programs and the Equal Employment Opportunity Commission.

Indeed, in the president’s budget, the OFCCP saw its budget reduced from $105 million to approximately $88 million while EEOC funding in Trump’s budget proposal essentially stayed the same at roughly $364 million, according to Federal News Radio.

Labor Secretary Alexander Acosta even testified at a House Appropriations subcommittee hearing in support of the Trump proposal, where he called the merger a “commonsense change” that “combines two civil rights agencies that already work together closely.”

But opposition to the plan has been widespread ever since it was announced, according to that report. It notes that 73 civil rights groups condemned the measure, and even the U.S. Chamber of Commerce has lined up against it:

Camille Olson, chair of the U.S. Chamber of Commerce’s equal employment opportunity policy subcommittee, told lawmakers recently that numerous companies have contacted the Chamber with concerns about merging the agencies. “Both the EEOC and the OFCCP need reforms,” she said, but not in the form of a merger.

Signs of resistance to the merger idea are also becoming more evident in Congress, where last week the U.S. House of Representatives approved an amendment that would prohibit funds from being used to merge the EEOC and the Labor Department’s contractor compliance office, according to a Bloomberg BNA report.

The proposal to merge the Equal Employment Opportunity Commission and the DOL’s Office of Federal Contract Compliance Programs is “a total mess,” said Rep. Donny Scott (D-Va.), the ranking member of the House Committee on Education and the Workforce who offered the amendment.

“Both have important missions, but combining them would be total confusion,” Scott told Bloomberg BNA. “The Chamber of Commerce opposed the merger, civil rights groups opposed the merger, and the Senate already had language in their bill taking away the merger, so I think it was appropriate in the House bill to also make a statement.”

The Bloomberg report notes that “the House amendment follows the Senate Appropriations Committee’s rejection last week of the proposed merger, which can’t occur without lawmaker support. A number of legislative and regulatory actions would be required to consolidate the agencies and to reconcile their different enforcement structures and approaches.”

 

A Lesson in Bad Management

In the recent wake of the destruction left behind hurricanes Harvey and Irma, we’ve seen countless stories of people in the affected areas following their “better angels” by making decisions that take into account the safety and well-being of others.

This is not one of those stories.

According to the Washington Post, a Pizza Hut franchise in Jacksonville, Fla., posted an ominous flyer for employees in advance of Hurricane Irma:

“To all Team members,” the memo begins, before laying out a policy that dictates that employees cannot evacuate more than 24 hours before the storm and must return within 72 hours. “Failure to show for these shifts, regardless of reason, will be considered a no call/no show and documentation will be issued,” it reads. “After the storm, we need all TM’s available to get the store up and running and serve our communities as needed.”

After the flyer made the rounds on social media and drew the wrath of many, Pizza Hut’s corporate office made a statement on its website that read, in part: “We absolutely do not have a policy that dictates when team members can leave or return from a disaster, and the manager who posted this letter did not follow company guidelines. We can also confirm that the local franchise operator has addressed this situation with the manager involved.”

The situation, unfortunately, is a common one for some workers in the path of inclement weather, as this story highlights.

The Cost of Legislative Compliance

A  new survey out by the Workforce Institute at Kronos finds the cost of legislative compliance for employers could reach up to six figures per rule.

The survey, conducted with Future Workplace, included input from 812 HR and payroll leaders on their views regarding regulatory compliance:

What we heard back is that it can cost organizations as much as $100,000 each time a federal, state, or even local labor-related regulation is created or changed.

Here are the key findings from this research:

    • More than half of HR and payroll professionals (54 percent) surveyed say that, on average, it costs their organization $40,000 to $100,000 to prepare for each labor-related regulatory change. (This cost covers a wide range of activities that varies by organization, including, but not limited to, consulting with legal counsel to create new internal policies; training for HR and payroll employees; educating leaders and managers on the change; wide-ranging employee communications to ensure everyone understands the change, etc.)
    • The cost of compliance keeps going up, too. More than two-thirds (68 percent) of those surveyed say compliance has become more expensive in just the last year, while three-quarters (74 percent) say it’s more expensive than 2007, just a decade ago.
    • While larger organizations are more sophisticated at tracking expenses related to maintaining compliance, one out of every five organizations with fewer than 500 employees (20 percent) surveyed aren’t sure how much the activity of remaining compliant costs annually.

The survey also found that HR needs more support “to identify and implement critical compliance changes.”

  • There’s no one-stop resource to keep up with regulatory changes. Well over half of respondents (59 percent) say they rely on their HR/payroll software vendor/provider to learn about changes, while many also depend on updates from national industry associations (39 percent), their internal legal counsel (37 percent), regional industry associations (35 percent), and legal publications (34 percent).
  • Virtually everyone surveyed (85 percent) says compliance is a guiding principal in their organization’s HR and payroll operations, but just a quarter (27 percent) say it is discussed daily. Just under half (46 percent) of respondents say it’s a weekly conversation, while one-fifth (20 percent) say it’s only addressed monthly.
  • Organizations do recognize the value in training employees to better handle compliance. Nearly two-thirds (61 percent) of the respondents say their boss makes it simpler to obtain training, educational opportunities, and industry certifications to simplify compliance administration.

You can view the full results of the survey here.

Paying Employees in Bad Weather

There’s a great and very timely piece on Jackson Lewis’ website today about the obligations employers face when it comes to paying employees during times of inclement weather (like the ongoing weather situation in Texas):

[I]s an employer legally obligated to continue paying its employees while the business is closed?

That depends.

Following Hurricanes Ivan, Katrina, Sandy, and others, Jackson Lewis addressed employers’ common questions when such natural disasters strike.

The post, written by principals Jeffrey Brecher, David Block, Richard Greenberg and Daniel Jacobs, the piece delves into the intricacies of paying both exempt and nonexempt employees during a weather distruption, and is well worth a read even if your company isn’t currently experiencing any inclement weather.

Who’s Happiest at Work?

When it comes to happiness in the workplace,  the youngest workers may have something to teach the oldest.

According to research carried out by Happiness Works for Robert Half, only 8 percent of 18-to-34 year olds consider themselves to be unhappy at work, less than half the number from the 35 to 49 bracket and those over 55.

Sixteen percent of those in the 35-to-49 bracket considered themselves to be unhappy, while 17 percent in the over-55 category did.

Robert Half’s survey, which included input from 24,000 working professionals across eight countries, found that workers tend to get more jaded as their careers progress, which could have a negative impact on the companies they work for.

“Employees that are aged over 35 have valuable experience that the whole organisation can learn and benefit from,” Phil Sheridan, senior managing director at Robert Half UK said in a statement.

“It’s important that their happiness is not neglected, so businesses need to take the time to invest in their staff at all levels.”

Factors contributing to declining happiness in the workplace include the pressure of taking on more senior roles within a company, a lack of creative freedom, and struggling to strike a healthy work-life balance, the study showed.

Happy workers, the research finds, are more likely to be productive and do good work, with the company citing research from the University of Warwick, which found that happy workers are as much as 12 percent more productive than those who are miserable.

“Happier people tend to care more about their work,” said Nic Marks, the head of Happiness Works. “So they put in greater effort. This also means they are quicker to notice when things are not going right and take action to prevent negative outcomes.”

Want Happy Workers?

A new report by Adecco USA uncovers how employers are experimenting with ways to attract and keep skilled workers happy, with the C-suite considering pay the most important factor.

According to the report, Best in Class Workforce Management Insights,  77 percent of 500 U.S. executives surveyed for the report consider pay to be the top concern when it comes to attracting and retaining workers.

“In this candidate-driven market, the burden is on employers to offer compelling reasons for candidates to join and remain with their organizations. Right now, part of the conversation is centering around wages,” said Joyce Russell, president, Adecco USA.

“While fair pay is a key driver in securing today’s workforce, employers must also make predictions and be nimble in adopting new solutions as the meaning of ‘Best-in-Class’ continues to evolve,” Russell added.

Among the other findings in the report:

  • 77 percent of executives believe pay is the most important factor to employees.
  • More than half of respondents offer health insurance and 401(k) packages to salaried employees, and 40 percent say they now also offer “softer” benefits, like flexible schedules.
  • 47 percent of employers do not prioritize hard or soft skills over the other when vetting a job candidate, and they weigh a candidate’s happiness as early as the interviewing phase.
  • Less than half of employers are offering education courses to their employees, but 61 percent believe mentorships are of importance in determining employee happiness.

You can download the full report here.

A Bill to Limit Microchipping

Just when you thought it was safe to go to work…

Pennsylvania State Rep. Tina Davis (D., Bucks) recently introduced a bill that would prohibit private employers and government entities in Pennsylvania from requiring employees to have microchips implanted in their bodies as a condition of their employment, according to this piece on Philly.com.

Davis floated her bill in response to news stories of a Wisconsin vending machine company asking its employees to voluntarily have an encrypted microchip inserted in their hands to log in to computers, use copiers, open office doors, and operate snack machines while at work. (We wrote about the topic here and here.)

According to Philly.com, Davis’ proposed Employee Subdermal-Microchip Protection Act would allow surgically implanted microchips only if workers made their own decision. It would require the state Department of Labor and Industry to investigate workers’ claims that they were victims of retaliation for refusing to get a chip. It also would impose fines for companies that violate the would-be law.

“My legislation will require that any employer that offers a microchip, or any kind of subdermal device to be implanted for use during the employee’s work, must make it a voluntary decision,” Davis wrote in a July 28 memo to the House of Representatives.

“An employee’s body is their own and they should have the final say as to what will be added to it. My bill will protect employees from being punished or retaliated against for choosing not to have the subdermal microchip or other technological device implanted. As technology advances, we need to make sure we provide employee protections that keep up with these advances and do not allow employers to have control over their employees’ bodies.”

A Warning to Employers

The Third Circuit’s recent decision that a single use of a racial slur, rather than pervasive conduct, can sustain a workplace harassment claim sends a clear warning to employers to preempt potential liability by providing training to prevent even single-serve incidents from happening in the first place, according to a recent post on Law360.

The Third Circuit’s ruling stems from a lawsuit brought by Atron Castleberry and John Brown against staffing agency STI Group over their experiences after being assigned to work as general laborers for Chesapeake Energy Corp. The new ruling clarified that the standard to be met for asserting a valid harassment claim was whether the treatment they faced, which included a supervisor’s use of the N-word, was either severe or pervasive.

The court clarified the standard after a trial court had thrown out the case after concluding the workers had to show their treatment had been pervasive and regular.

“I think what a case like this, at least from my perspective, really sets forth for employers is the importance of training on harassment prevention in the workplace and making sure your employees — certainly managers, but ideally everyone — know that even a single comment may now be enough to create liability for the organization,” said Duane Morris LLP partner Michael Cohen.

For more details on the case and the ruling, click here (subscription required).