Lake-Geauga Fast Track 50 seeking nominations

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In its 20th year, the Lake-Geauga Fast Track 50 Award once again recognizes the 50 fastest growing companies in Lake and Geauga Counties. Winners of the award are based on average sales and employment growth from 2007 through 2011. The most current nomination form can be found online at: www.fasttrack50.org.

To be eligible to receive the award, companies must be located in the two-county region, be organized as a for-profit business, and must have a sales profit for 2007 of at least $100,000. 

Winning companies were honored at a recognition dinner on November 1, 2012 at the Holiday Inn Express Hotel & Suites LaMalfa in Mentor and were featured in The News-Herald.

Fast Track 50 was founded in 1993 when Peter Ferrante, Greg Skoda and representatives from Huntington National Bank met to talk about the unique small businesses that they served as clients. A formal program was then developed to honor the 50 fastest growing companies in the Lake-Geauga county region. The annual awards banquet is attended by nearly 400 members of the business community and local government officials.

The 2012 program is sponsored by Benjamin F. Edwards & Co., Huntington Bank, Lakeland Community College, The News-Herald, and Skoda Minotti.

Nearly 300 companies have been recognized since the award’s inception in 1993. For a complete listing of these companies, or to nominate a deserving company, please visit www.fasttrack50.org. For questions, please contact Jen Brawner of Skoda Minotti at 440-449-6800.

Supreme Court Upholds Health Care Reform Law

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On June 28th, 2012, in a 5-4 decision, the U.S. Supreme Court that the individual mandate portion of the health care reform law (the Patient Protection and Affordable Care Act), which requires that most Americans buy health insurance or pay a fine, is constitutional as a tax.

The Court agreed that while Congress could not use its power to regulate commerce between states to require individuals to buy health insurance, Congress could impose a tax penalty using its tax power for individuals who refuse to buy health insurance.

Because the mandate is constitutional, the Court did not need to determine whether other parts of the law were constitutional, according to the SCOTUS Blog.

The individual mandate was set to be implemented in 2014, however, many provisions of the health care reform law had already gone into effect in 2012. The ruling suggests that employers will still be responsible for the carrying out the provisions of the law which affect their organizations.

For more information about the Supreme Court decision, please visit the links below.

Source: SCOTUS Blog

New Retirement Plan Requirements: 4 Things Employers Must Do

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The Department of Labor's final rules under the Employee Retirement Security Act of 1974 (ERISA) start became effective July of 2012. These rules are intended to enhance the transparency of fees and other compensation with service providers. They will help employers and their employees better understand how much their retirement plan truly costs and the value/level of service they are receiving from their vendor/service provider.

Many employers are unaware of their responsibilities as ERISA fiduciaries. Most are neither trained nor skilled to interpret vendor reports, monitor service levels or fees, and ask the probing questions necessary to fulfill their fiduciary duties. Employers may need to retain professional advisors to implement a strategy of compliance and procedural prudence to manage their plans.

Dave Kulchar, Executive Vice President and Director of Retirement Plan Services at Oswald Financial, Inc. explains that there are two phases in the implementation of these rules. He says, "Phase one requires service providers to disclose all costs to plan sponsors beginning on July 1st. Phase two requires plan sponsors to deliver this information to plan participants, effective August 1st."

The new requirements often are explained in a complex manner that are difficult for organizations to understand so we've simplified them to summarize 4 of the most critical action steps you need to take to comply with these new requirements.

1. Make sure you receive the necessary disclosures.

Employers must make sure that they have received all of the required disclosure information from their covered service providers (auditors, record keepers, custodians, actuaries, advisors etc.).  If the required information is not received by July 1, 2012, then the employer has an obligation to request the information in writing. Without the required information in hand, any fees paid to those service providers may be considered prohibited transactions under ERISA and employers can be held liable for civil penalties or excise taxes.

2. Evaluate and benchmark fees from your vendors.

The new rules of 2012 require covered service providers of ERISA-covered defined benefit and defined contribution plans to provide employers with the information necessary for them to evaluate whether fees paid to service providers are reasonable when compared to those paid by other similar plans and determine if any conflicts of interest may impact a service provider's performance under a service arrangement. Information that must be disclosed includes:

  • A description of all services to be provided to the plan
  • All compensation it expects to receive, including direct and indirect compensations
  • The manner in which compensation will be received by the service provider
  • A description of whether the services provided are fiduciary services or services under the Investment Advisors Act of 1940
  • Information about conflicts of interest

This information will be necessary to evaluate and benchmark their fees against other service providers in the market to determine whether they are reasonable or not, and to understand if the fees are in line with those paid by similar plans. Organizations will need to make sure that they aren't paying unreasonably high fees for their retirement plan's services and document their analysis and review.

Why is benchmarking necessary? As plan fiduciaries, employers must evaluate their providers regularly in terms of their cost and competence to avoid liability, even if they are satisfied with their provider and aren't considering a change. In addition, employers should be wary of simply choosing the least costly service providers and evaluate their competence and level of service to protect themselves from potential liability. 

3. Communicate fees to employees.

Effective August 1, 2012, employers need to communicate and report these disclosed fees to employees participating in the retirement plan. Under these rules, employers are also required to provide ongoing disclosure to plan participants on quarterly statements going forward. It is important to note that this communication is the responsibility of plan sponsors - not plan service providers.

These disclosures must include an explanation of fees and expenses charged or deducted from participants' accounts as well as general information about the plan's structure and operation. "In some cases, employers will need to combine all of the information disclosed by various service providers and vendors in order to communicate it to employees," Kulchar explains.

In terms of how fees should be communicated, Kulchar advises, "Employers must communicate disclosed fees on paper unless they meet the necessary qualifications to disclose them online, which in many situations may be difficult to meet. Also, there is no set format and communications can look different, but fees must be expressed in a flat dollar figure and percentage."

4. Anticipate and answer employee questions.

Employers need to anticipate and answer employee questions about the reports that they distribute on fees. They should be prepared for employees to request assistance in understanding the information being disclosed to them about the fees. Employers should also expect that employees will inquire about why they hired particular service providers and be in a position to justify and explain the fees and expenses that must be disclosed on a comprehensive basis for the first time. They may even consider providing a list of FAQs to employees when this information is disclosed.

"Currently, 72% of employees don't think they are paying anything for their retirement plan. As a result, employers should be prepared to receive and answer questions like 'Is this new?,' 'How long have we being paying this?,' 'Is this competitive?,' 'What's being charged?,' and 'Is this reasonable?,'" says Kulchar.

Although the 2012 legislation changes on retirement plans create new duties and responsibilities for employers, they provide an opportunity for employers to better understand the true costs of their plans and fees paid to providers and help employees better understand their plans as well.

Please note that by providing you with research information that may be contained in this article, ERC is not providing a qualified legal opinion. As such, research information that ERC provides to its members should not be relied upon or considered a substitute for legal advice. The information that we provide is for general employer use and not necessarily for individual application.

Additional Resources

ERC members save thousands on various retirement plan services offered through Preferred Partner, Oswald Financial. These services include waived fees on comprehensive retirement plan reviews and plan design consulting, discounts on Oswald's financial paperless 401(K).

Salaries in Healthcare Sector Reflect Demand

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Here in Northeast Ohio the prominence of our healthcare industry is often touted as one of the region’s greatest strengths. In terms of sheer volume, health care represents a significant proportion of the workforce- approximately 16% according to the 2012 Current Employment Statistics survey for non-agricultural jobs in the Cleveland-Elyria-mentor Metropolitan Statistic Area (MSA).

However, for those 155,400 individuals employed in healthcare/social assistance, being part of the workforce for this booming industry does not always translate into higher levels of compensation. In fact, using data from several ERC Compensation Surveys to perform an occupation specific analysis for 40 job categories placed two occupational subcategories within the healthcare industry, i.e. Patient/Client Services and Social Work, among the 10 lowest paying job categories in Northeast Ohio. Conversely, Clinical Healthcare Practitioners and Nurses came in as two of the 10 highest paying job categories in the region according to this 2012 data. 

Nursing, coming in as the fourth highest paid occupation in the analysis, is one of only a few positions that pay above the national median salary reported by the Bureau of Labor Statistics. As noted in a recent article from Crain’s Cleveland Business, registered nurses in particular can expect to remain in high demand across local healthcare systems. Clearly this demand for specialized, skilled talent is a key factor driving up rates of compensation within Nursing and among Clinical Healthcare Practitioners more generally.

At the opposite end of the spectrum the Patient/Client Services category includes a wide variety of jobs in healthcare, but with two important items in common, fairly low education and skill requirements and often highly repetitive job duties. A notable exception to this generalization that lower skills equate to lower pay, is in the field of Social Work. According to the 2011 ERC Non-Profit Benefits Survey, one way organizations often look to counteract this low market valuation of Health and Human Services positions such as Social Workers is to offer a unique array of other non-cash benefits that serve to enhance the total rewards package employees in these positions receive.

Additional Resources

ERC Non-Profit Compensation & Benefits Surveys
ERC, in partnership with United Way of Greater Cleveland, has created compensation and benefits surveys to help non-profits in Northeast Ohio gauge their compensation and benefits practices. Through this exclusive partnership, United Way Agencies that participate in these surveys will receive the survey results for no cost. Participate in our Compensation and Benefit Surveys by clicking here.

*The average median base salary figure for each occupation was calculated using data excerpts from the following surveys conducted by ERC: 2012 ERC Salary Survey, 2012 ERC Wage Survey and 2011 ERC Non-Profit Compensation Survey. Please note that the salary figure reported for each occupational category is an average of median salaries across applicable job titles from entry level up through management level positions.

More Northeast Ohio Employers Projecting Salary Increases for 2012

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Data from the 2012 ERC Pay Adjustment & Incentive Practices Survey indicates that the increases being projected by Northeast Ohio employers are representative of a larger national trend of compensation practices. Of the 114 participating organizations, 89% are projecting salary and wage increases for 2012, a record high level since 2009 when only 45% of survey participants projected increases. This improvement falls just short of improvements found in national data reported by SHRM in an article from 2011.
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12 Answers to Common 'Paid Time Off' Questions

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12 Answers to Common Paid Time Off Questions

Paid time off policies (PTO), managing absenteeism, and administering summer holidays like July 4th are always common issues for employers during the summer months. Here are 12 answers to common questions about PTO and summer holidays to help your organization navigate these challenges and create a competitive PTO plan.

1. Are employers required to provide paid federal holidays or PTO?

No employer is required to pay for time off on holidays, but there are many holidays that employers choose to observe and pay employees. Similarly, there is no requirement that employers must provide PTO, but it's generally an HR essential to attract and retain good employees.

2. What is the average number of paid holidays provided?

The average number of paid holidays offered by employers is 9-10. Usually organizations provide at least 5 paid holidays, however we've seen organizations provide as many as 15. Additionally, nearly 40% of employers offer at least one floating holiday each year, according to our most recent Paid Holiday Survey.

3. Should we credit paid holidays that occur over a vacation?

Generally-speaking, yes. It's a good practice to credit PTO if a paid holiday occurs over a vacation. For example, if employees take July 2nd through July 6th off work and July 4th is a paid holiday observed by your organization, this day would be credited back to the employee's vacation or PTO bank.

4. How should we handle employees who take off unscheduled days before or after holidays?

A main way that employers deal with this problem is to state in their attendance or paid time off policy that patterned absences such as before or after holidays or weekends are considered unexcused absences and may be subject to discipline. Employers can also require time off to be approved. The best way to prevent this from happening is to cover it in your policy and enforce it consistently.

5. What are some reasons for considering PTO plans versus vacation and sick time?

PTO plans lump all time off into one bucket, versus separate buckets of time off for different types of leave like vacation, sick leave, and personal time (and typically excluding holidays, bereavement leave, jury duty, etc.). PTO plans allow employees to use days off for any reason and as a result tend to make the administrative process of managing and tracking time off easier. The focus of PTO is not on managing the reasons for the absence, but rather giving employees the freedom to use their time as they see fit. More employers are moving to PTO plans for these reasons.

6. How many PTO days do organizations typically give?

The standard across most benefits surveys is providing 10 vacation days after at least 1 year of service, 15 vacation days after 5 years of service, 18 vacation days after 10 years of service, and 20 vacation days after 15 years of service. Maximum amounts of vacation days are typically between 20-25 days, but vary greatly by employer. If sick and personal days are also included (such as in PTO plans) the number of days provided typically increases by 3-5 days at each interval. Vacation or PTO time is generally based on anniversary hire date or calendar year.

7. Should we consider unlimited vacation time?

Unlimited vacation time is becoming more popular, particularly among progressive employers and for salaried/exempt employees. There are many perks of unlimited vacation time if your culture is conducive to it. Not only does it eliminate the need to track time off and administer cumbersome details, but it gives employees more freedom to take personal time off and is an attractive benefit.

On the flip side, unlimited vacation time typically is difficult to administer with hourly workers and doesn't work effectively if your organization does not have the right employees on deck to responsibly handle this freedom or a culture that values results over hours worked. It also can make it difficult to monitor the reasons for employees' absences which can trigger your responsibilities under certain laws like ADA and FMLA.

8. How much time-off should new-hires receive?

New-hires typically receive between 5-10 days of vacation. In some companies, particularly those administering PTO plans which include sick and personal days, 10-15 days is more common. Allowing accrual and use of PTO to begin within the first 30 days of employment for new-hires versus after the traditional 90 day period is becoming a more common trend among employers.

9. What should we consider when developing a PTO donation program?

PTO donation programs which allow employees to voluntarily transfer PTO hours to qualified employees experiencing either their own medical hardship or one in their immediate family, are becoming popular. When developing these programs, employers should:

  • determine who is eligible to receive PTO donations - define specific circumstances, length of time expected to be absent, etc.
  • create an application to determine eligibility and a donation form indicating how many hours donating employees will provide
  • work out administrative details - such as how and when paid time off will be transferred and who is responsible for taxes incurred

10. How many PTO carry-over days should we allow?

The majority of employers have a use-it or lose-it policy where unused time off is forfeited at the end the end of the year, but many allow carry-over of unused time for future use. While allowing modest carry-over of vacation time from year to year is somewhat common, allowing too much accrued leave could potentially be a financial burden if it compounds over several years and you must pay out this leave when the employee terminates employment with the organization. It also may result in an extended leave because time is combined from one year to the next.

As a result, if carry-over days are allowed, it may be worthwhile to specify if days must be taken by a certain date, how many days can be carried over from year to year, and a maximum allowable time off period (i.e. 2 weeks).

11. Should employees be able to cash out their unused time?

Sometimes employers allow employees to "cash in" their accrued vacation hours at their full value or at a lesser cash value (such as 50% or 70%, if allowed according to state law). There are, however, extra payouts associated with this option and employers must determine if the payment will be calculated based on the employee's current base pay and/or base pay after pay enhancement, etc. This option is by no means common, but is a nice perk to offer employees as part of your PTO plan.

12. Do we need to pay out vacation time upon termination?

Finally, employers often inquire about if they need to pay out vacation time after an employee has been terminated. Accrued vacation or paid time off is normally paid to employees who leave the company voluntarily or involuntarily. Termination payments, however, are governed by state law. Here is Ohio's stance on payout of paid time off upon termination.

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New Recognition Program for Northeast Ohio HR Professionals

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ERC is very pleased to announce a new recognition program for Northeast Ohio HR professionals in 2013 – The HR Awards. This program is a joint collaboration between ERC and the Cleveland Society for Human Resource Management (CSHRM). The HR Awards recognize Northeast Ohio HR professionals who have demonstrated excellence in the field of human resource management. The awards honor all levels of HR practitioners, from individuals in local SHRM student chapters to HR executives.

Recognition is provided to HR professionals in the following areas:

  • Benefits
  • Global HR
  • Business Leadership
  • Organizational & Employee Development
  • Compensation
  • Talent Management
  • Diversity
  • Technology
  • Emerging Leader
  • Student Chapter of the Year
  • Employee Relations
  • Student Advisor of the Year

Winners are recognized at a special awards luncheon hosted by ERC and CSHRM. There is no cost to nominate an individual and nominations are made at www.TheHRAwards.com. Please note that self nominations are accepted and encouraged.

The HR Awards are sponsored by Smart Business, Cleveland.com, Hylant Group, Right Management, Staffing Solutions Enterprises and Ultimate Software. The program is also endorsed and supported by Greater Lorain County SHRM, Lake/Geauga SHRM and Medina County SHRM.

Northeast Ohio CEO’s Total Compensation Among Top In Nation

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According to the results of the 2012 National Executive Compensation Survey, CEOs here in Northeast Ohio receive the fourth highest total compensation package as compared to 20 other geographic regions reported in the survey. Coming in at $308,500, Northeast Ohio CEOs rounds out a strong showing for the Midwest, with the Columbus/Cincinnati breakout and Detroit Metro area in the first and third spots respectively in terms of total compensation for CEOs in their regions.

Base salary accounts for approximately 75% of the total compensation package in Northeast Ohio, a rate which suggests that area CEO’s receive a larger portion of their compensation in the form of variable pay than in the vast majority of other regions reported in the national sample. By focusing on variable pay, such as bonuses and other short term incentives, employers are able to more closely tie executive pay to performance. Establishing a clear connection between the value a CEO adds to the company and the compensation they receive in return is a critical step forward and a growing trend in executive pay, both for the sake of internal equity as well as to ensure compliance with external regulations.

Of the 47 executive positions survey across the national sample, increases to base pay remain stable- right at 3% for 2012. When calculated only including those organizations who projected increases, this number is a slightly higher figure, but one that continues to hover around the 4% mark for these executive type positions.

Additional Resources

2012 EAA National Executive Compensation Survey
The 2012 EAA National Executive Compensation Survey, published in May of 2012, reports compensation, benefits, and pay practice data provided by 2,235 participating organizations throughout the country and 108 organizations in Northeast Ohio for 11,948 executives in 47 positions. Breakouts of data are included across five variables: sales volume, organizational size, industry, organization type, and geographic location – including Northeast Ohio. Download the survey here.

2012 ERC Performance Management Practices Survey
This survey collects information from Northeast Ohio organizations on performance management practices in the workplace, specifically related to performance reviews, performance criteria, role of the supervisor in managing performance and other performance management issues. Click here to view the survey.

An Employer’s Guide to Social Media & Mobile Device Policies

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As new technology continues to shape the workplace and the use of social media and mobile devices at work becomes more widespread, organizations must create and enforce employment policies to protect themselves from the risks and liabilities associated with these new applications for working. Here's a short guide which contains important tips and guidelines for creating social media and mobile device policies.

Social Media Policies

Social media policies must balance a range of interests. First, they need to protect other employees and the company’s information and reputation without prohibiting employees from engaging in conversation about employment at your organization. Second, social media policies need to be flexible enough to allow your marketing, sales, recruiting, and PR employees to promote your company and network, but restrictive enough so  employees won't excessively use these platforms for non-business related purposes.

Below are several guidelines and best practices for creating social media policies, consistent with recent guidance issued by the National Labor Relations Board (NLRB) and endorsed best practices published by the Society for New Communications Research. Additionally, this 2012 policy was approved by the NLRB and is helpful for employers as they create their own guidelines.

  • Require that social media usage is consistent with other workplace rules and policies, including federal laws related to discrimination and harassment.
  • Encourage employees to be respectful and fair to coworkers, customers, vendors, and other individuals affiliated with the company online and when using social media. Promote dealing with conflicts or complaints directly with one another rather than via social media outlets.
  • Educate employees that if online complaints or remarks are construed as disparaging, malicious, or threatening, their postings could be perceived as harassment or contribute to a hostile work environment, and thereby be unlawful.
  • Communicate that social media postings be accurate, factual, and truthful. Clarify how your organization will handle mistakes and edits to content. For example, many organizations require that mistakes be corrected promptly and edits or deletions to online content be communicated.
  • Define specific types of appropriate and inappropriate content to publish online. For example, trade secrets, private or confidential information, and financial disclosure laws/regulations can be reasonable content to protect.
  • Specify how employees should represent themselves online. Make clear that employees are not to represent themselves as spokespeople on behalf of the company and that employees who publish anything online related to their work or subjects associated with your organization should identify who they are and that their views do not represent those of their employer.
  • Specify if and when employees are able to use social media on the job. You may restrict employees from using social media at work if it is not job related or delegated by one’s manager, or if excessive use of social media is affecting job performance.
  • Don’t prohibit employees from talking about your organization online or expressing their personal opinions. The NLRB has been especially critical of employers who are trying to prevent employees from discussing terms and conditions of the workplace.

Bring Your Own Device to Work (BYOD) Policies

In addition to social media policies, every organization should have a Bring Your Own Device to Work Policy (otherwise known as a BYOD or a Mobile Device Policy) because employees are increasingly bringing their own mobile devices to work and accessing company networks through smartphones, tablets, IPADs, and laptops - to name just a few.

Although these devices can be of benefit to employees and employers alike by increasing productivity and providing flexible access points to company information, BYOD creates huge risks for employers in terms of compliance with the Fair Labor Standards Act (FLSA), privacy and compliance mandates, etc. if mobile device policies are not in place. Here are some guidelines for developing those policies.

  • Consider the adverse effects of not allowing these devices in the workplace. Bans on mobile devices are usually not feasible because inevitably there is an employee who needs mobile access.
  • If your organization needs to remain compliant with certain regulations (HIPAA, etc.), take special precautions to safeguard this data and restrict employees’ access to it on their own devices. Work with your IT department to design those precautions.
  • Define and provide examples of what is acceptable use and transfer of organizational data on mobile devices.
  • Put into place guidelines regarding confidentiality and data ownership, including a procedure for data retrieval when an employee leaves the organization via voluntary or involuntary termination or when a device is lost or stolen.
  • Require strong or complex passwords in order to login to your company networks on mobile devices.
  • Have employees formally consent to an acceptable mobile device use policy, such as by signing off on your policy.
  • Establish clear rules for non-exempt employees about what they can and can’t do with their mobile devices during non-working hours to protect you in terms of FLSA requirements
  • Suggest that employees not use their phones or mobile devices with driving, in light of Ohio's recent ban on texting while driving
  • Indicate disciplinary consequences for employees who inappropriately use business data on their mobile devices.

Two final pieces of advice when creating these policies. Collaborate with your employees to create a policy. Be sure to include your legal department, your core users of social media for business purposes (for social media policies) and IT department (for BYOD policies). Finally, update these policies on an ongoing basis. With technology constantly changing, these policies need to be revisited at least annually.

Please note that by providing you with research information that may be contained in this article, ERC is not providing a qualified legal opinion. As such, research information that ERC provides to its members should not be relied upon or considered a substitute for legal advice. The information that we provide is for general employer use and not necessarily for individual application.