"Wait! What? Why is Michigan HR Group saying not to outsource?" If outsourcing means a company relies on an HR person who never has face time with managers and staff, then check out this blog post, "Why You Can't Outsource HR" via @HuffPostBiz. We agree and that's why our consultants are physically available to clients and share our cell number with employees. Yes, remote support can be very effective; it just ought not be the only service option.
- President Trump will change somethings that affect organizations, employees and the workplace but what and when is not clear yet.
- What is unchanged:
- The best people seldom knock on your door and ask, “Are you interested in hiring someone like me?” (While it happened once this year for a client, this is an uncommon blessing.)
- The cost of and competition doing business or raising capital continues to increase.
- February 1 through April 30 most US businesses must publicly post the prior year’s injury log (that said, most businesses under 11 employees and a number of NAICS codes are exempt).
- To date, the Affordable Care Act is unchanged. (There is so far, no actual impact of the President’s day one executive order to “’waive, defer, grant exemptions from, or delay the implementation’ of provisions that imposed fiscal burdens on states, companies or individuals.” (Reuters)
- Meanwhile, what is new in 2017:
- You must start using the new I-9 form (careful, it doesn’t open in every PDF viewer).
- Organizations across the planet continue to change their goal setting and performance evaluation systems.
- In the words of expert Marc Effron: goals should be “Fewer. Bigger. Better.”
- Effron also wrote, “The power of performance management (PM) comes from brilliant goal setting, not flawless reviews, so until companies put effort and accountability into that area the quest for truly effective PM will not be realized.”
- Most efforts in this area, at best, just discuss the past (worthwhile but incomplete) and, in one large research study we learned, 40% of employees’ performance goes DOWN for a period of time after the review process is complete and 50% of the staff only walk away annoyed from the whole endeavor.
- The Michigan HR Group can help you think through and/or improve staff performance – on a go-forward basis.
- Most government contractors have another, new minimum wage ($10.20) and must provide paid, family sick leave (up to 56 hours with annual carryover for the unused portion).
- More changes affecting 401(k) and other retirement plan rule fiduciaries are coming.
- By January 2018, 16 states will have paid leave laws in place. The Trump administration has expressed interest in some form of federally-mandated, paid, family sick leave.
- Ideas to consider:
- Do you have an actionable business plan? A vision for your business with clear, regularly discussed accountabilities? (Michigan HR does not provide such organization-wide solutions but can discuss options and then translate those directions and decisions into talent tactics.)
- Speaking of talent tactics: have you considered what roles, skills and people might need to be added this year? We recommend not waiting till cash is in-hand to start looking for the right person. Begin the search and conversations in advance.
- What compliance and risk issues can you address this year?
- Your #1 risk is unanticipated turnover, people leaving with a surprise departure. What are doing to improve retention, engagement, learning, productivity, etc.?
- Did you know a correctly written Employee Handbook can reduce the statute of limitations on most employment complaints to six months, down from seven years? (This applies to several Midwestern states.)
- Are your personnel files in order? I-9s, federal AND state I-9s, termination documentation and (most important for many organizations) an intellectual property protection contract (only capable lawyers ought to write these).
- Unfortunately, in states like Michigan, your employment posters now need to be updated every year.
- What else is on your mind? Contact us by phone or email; even better, let’s meet for coffee and chat.
-Scott Trossen | email@example.com | 734-904-5611
We cannot address whether the legal opinion expressed here would be shared by your own legal counsel. Please seek advice should you delay complying with what now seems to be a stalled, new regulation on minimum salary for exempt employees. --Michigan HR Group
November 23, 2016
Breaking News! Federal Court Suspends Enforcement of Overtime Rule
A federal judge in Texas has issued a nationwide injunction blocking the US Department of Labor’s (US-DOL) new overtime rule. The injunction halts enforcement of the rule until the case is decided.
The regulation was scheduled to take effect on December 1, 2016. It would raise the salary limit under which workers automatically qualify for overtime pay to $47,476 from $23,660. In addition, the salary threshold would be tied to the 40th percentile for full-time salaried workers in the lowest income Census region (currently the south) and updated every three years.
So what does this mean for employers? The overtime rules will not go into effect on December 1, but employers should be aware that the regulations could still be implemented at a later date. Until a decision is reached, employers should continue to follow the existing overtime regulations.
More information on the rule can be found on the Michigan Chamber’s website. The Michigan Chamber will continue to provide updates on this new development.
Big Issues to Consider
· Getting the work done the company needs done … at a pay rate which makes business sense and retains staff.
· Keeping employees engaged at the same or higher level.
· Complying with the law to accomplish the above.
o Minimum salary (a different concept than “minimum wage”) goes to $47,476* ($913 per week) on December 1, 2016.
The actual rule is the weekly amount. Meaning, for example, if you run a bi-weekly payroll, every check must have gross wages of at least $1,826. You cannot have an exempt person paid, for example, $800 for some weeks and make up the difference in future checks.
$22.82 (annualized) and below per hour will not be enough to be considered eligible to be exempt.
This amount will increase every three years.
o This is not the only basis on which to not pay overtime to a position: job duty tests remain.
o Several states are challenging the legal basis for the federal government to make this change. At this point, companies should plan for this to take effect.
§ Can you delay communication and implementation for several weeks? Yes. Delay getting ready to change? Unwise.
Once a person is identified as currently earning less than $47,476, your core options are:
1. Raise base pay to federal minimum à person makes more, company should receive same worked hours.
2. Convert current base rate to an hourly rate and limit/prevent future overtime à person makes the same, company will receive fewer worked hours.
3. Convert current base rate to an hourly rate and allow future overtime as needed à person makes more, company should receive same worked hours (but for different reasons company could get fewer, same or more hours worked).
TIP: If you are going to change the way someone is paid and think you have talked with the person enough about the change, you probably have not.
· Are all companies covered under the FLSA? Generally, you must have sales of $500,000+. If you believe you may not be covered, please discuss all the criteria with an employment attorney.
· Are some professions not subject to the minimum salary test? It’s a federal law so “yes” is the complicated answer. Outside sales, business owners (20%+ and actively involved in the org), teachers, lawyers, doctors and clergy are not.
o What about church staff? Members of a religious order are not subject to FLSA rules but the other members of the staff are.
· Do bonuses count? Only “non-discretionary” bonuses, paid not less frequently than quarterly, and only up to 10% of the minimum salary amount.
o Yes, might be very messy math to make that calculation.
· What if someone is part-time? S/he still must be paid the minimum weekly salary; there is no prorating based on less than full-time.
· What if someone is seasonal? So long as any week of wages are $913 or more, then the person can be exempt for those weeks.
To create a new, hourly base rate, estimate worked hours by one of these methods:
· Option (a): merely divide salary by 2,080 where someone making $40,000/2,080 goes to 19.23/hour.
· Option (b): if average worked hours are 45 a week then $40,000/2,080/40*45 = 21.64/hour which some will argue is the correct, effective wage.
just to say it, there are reasons to argue for and against including all hours previously worked in the conversion
Did you get a premium refund payment from you group health plan insurance company? Do you know what to do with it?Read More
There is much to be said on this topic but watch a 2.7 minute video to learn some of the why managers and staff are frustrated by the typical, once a year, let-me-tell-you how you did and wrap that up in a single, rating number. Want to learn what to do? Contact us to chat. (Hint: the answer is not stop doing performance development and management.)
Our founder, Scott Trossen, will be speaking on this topic to HR peers at the October 6th meeting of the Greater Ann Arbor Society of Human Resource Management.
"Most workers are employees under the FLSA’s broad definitions," affirmed the Department of Labor statement on July 15th and that they will enforce this standing position.
They stated, “Misclassification of employees as independent contractors is found in an increasing number of workplaces in the United States. When employers improperly classify employees as independent contractors, the employees may not receive important workplace protections such as the minimum wage, overtime compensation, unemployment insurance, and workers’ compensation. Misclassification also results in lower tax revenues for government and an uneven playing field for employers who properly classify their workers. Although independent contracting relationships can be advantageous for workers and businesses, some employees may be intentionally misclassified as a means to cut costs and avoid compliance with labor laws.”
While there is no single action or equation which determines a worker’s status, the government’s default designation is W2 and eligible for overtime. If a person is to be exempt (from overtime) or 1099, the organization must have a defensible reason for the designation. There is currently no requirement to document this rationale; though you can. To be an independent contractor, an organization must be sure multiple "factors" are not true about the worker's relationship to the company. For exempt/non-exempt decisions, consider running the DOL FLSA “Overtime Advisor” and saving the report as your documentation of the decision.
The short hand at Michigan HR Group is: if a worker quacks (works) like a duck (a W2 employee) then expect the government will want to tax them like a duck, too; and bite (penalize) you if the company chooses otherwise.
For more information, consider a conversation with one of our consultants: www.mi-hr.com.
We are proud to be one of the leading sponsors of this year's Ann Arbor / Ypsilanti Chamber of Commerce annual Foundation Gala. This no fee/no registration event features a silent auction to benefit community initiatives along with hundreds of guests, great area food and musical entertainment. The event will be held at the Morris Lawrence Building at Washtenaw Community College, Friday evening, February 20 from 5:30 to 8:00.
The topic of performance reaches to the core. As a result: People stay or go. Rise or resist.Read More
“You absolutely must have the discipline not to hire until you find the right people.”
—Jim Collins in Good to Great
Have you hired someone and agreed to make their COBRA payments? Are you paying for an employee's premiums to purchase health insurance on the Exchange?
If you write the check directly to the health plan or COBRA administrator or put the dollars in an employee's check without deducting taxes, according to articles by Accounting Today and the Society for Human Resource Management, you may be in violation of IRS rules which they clarified on May 13, 2014.
Please check with your CPA for what is appropriate for your organization.
The new form and instructions REQUIRE some fields never be blank, even if not applicable.
In Section 1 which is to be completed by the employee BUT you the employer must ensure the section is complete.
- Middle Initial, Maiden/Other Names, First and Last Name fields cannot be blank.
- If someone does not have a middle name or middle initial, enter “N/A.”
- If someone does not/did not have a different name, enter “N/A.”
- If a person has only one name, enter that as the Last Name and “unknown” for the first name.
- Email Address and Telephone Number are not required but cannot be blank.
- Enter “N/A” or complete the item.
The only I-9 form valid for use is dated “03/08/13 N.”
There are many items to handle correctly, from understanding List A from B and C, to entering the first day of employment, to making or not making copies of identification, to storing the documents, etc.
In general, (1) if you have never been trained to complete an I-9, do not do so without reading and following every detail on the form and instructions (pages 1-2 and 7-9 must be given to the employee).
(2) Unless you have specific experience, there are infrequent situations which should direct you to get help before you sign off on an I-9. However, do not impose any burden on the employee. Go through your regular process and then when the person is not with you, get help. If needed, you can follow up later with the employee. These include:
- Using eVerify (required of some employers; optional for all).
- F-1/J-1 visas (which are not valid for employment; requires a document from their school).
- H-1B and other work authorizing visas.
- An application for a social security number (valid but only for a limited time after which you must either see the actual card or prevent the person from working).
- Refugees and Asylees.
- Residents of locations outside the United States that are allowed to work in the US without additional documentation.
Attorney Mark Heusel and Scott Trossen will be presenting a series on "Responding to Workplace Harassment" starting this week at 10 AM for the Michigan Chamber of Commerce. Click here to... sign up for one, two or all three sessions.
Lou Adler is one consultant/author worth reading if you want to hire people or get hired.Read More
New rules take affect March 24, 2014.Read More
Engagements with clients range from on-site nearly every day of the week to occasional questions answered. So while this site can't capture the depth of our skills nor breadth of the solutions we provide, we invite you to consider the space between where your talent and processes are, where they ought to be and how to control risks to your organization's goals.
If human resources consulting or outsourcing may be of interest, please contact us and let's meet to better understand your needs and capabilities, what capacity you have and what else our consultants can offer.
We can teach you how to enhance your people and systems, or do your HR functions for you.
On behalf of our team, thank you for considering the Michigan HR Group. -Scott