Tis the Season for 5 Holiday HR Issues

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Tis the Season for 5 Holiday HR Issues

Tis the season for several HR and compliance issues associated with the holidays. Here are five (5) holiday HR issues that you should revisit as the holidays ensue.

1. Holiday decorations

Holiday decorations tend to make their way into the workplace and employees' workspaces this time of year. What an employer allows in terms of decorations in the workplace is up them, but they should not discriminate and should be consistent and reasonable with their policies. 

Organizations need to be particularly careful with religious decorations, however. Refusal to accommodate an employee who wants to display a religious holiday symbol or decoration to commemorate a holiday should be considered very carefully as these can be minor religious accommodations that are protected under law and generally acceptable.

Additionally, according to the EEOC, holiday decorations should not be avoided just because someone objects to them, but organizations should ensure that all holiday decoration displays are reasonable and non-disruptive.
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How to Set Compensation in 5 Easy Steps

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Salaries are a business investment, and in order to make sure that you set fair and competitive compensation for jobs it’s important to use a structured method for setting compensation as opposed to choosing a random salary or simply using one salary survey or compensation source.

Employers generally determine salaries based on five (5) types of information: the job's responsibilities, what their competitors are paying, how valuable the job is to their organization, how they pay people in similar roles based on their pay structure, and their budget/organizational needs.

With this in mind, here are five (5) easy steps for setting compensation.
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SEC Proposes CEO Pay Ratio Rule

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The Securities and Exchange Commission (SEC) proposed a rule in 2013, required under the Dodd-Frank Act, which would require companies to disclose a pay ratio of their chief executive officer's compensation to the median total compensation of all of its employees (for the last fiscal year).

The SEC would not prescribe a specific method for organizations to use when calculating a pay ratio, and companies would have the flexibility to determine the median annual total compensation among their employees and make reasonable estimates when calculating elements of and employees' total compensation.  In addition, in the proposed rule, "employee" is defined as any employee who is full-time, part-time, temporary, seasonal, and non-U.S; employed by the company or any of its subsidiaries; and employed as of the last day of the company's prior fiscal year.

Companies would be required to disclose the method they used to identify the median and total compensation as well as any amounts that are estimated.

Source: Securities and Exchange Commission (2013). SEC Proposes Rules for Pay Ratio Disclosure

Will New DOL Regulations for Direct Care Workers Drive Changes in Pay?

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Here in Northeast Ohio, it is well known that the healthcare industry is by far the largest in the region, employing thousands upon thousands of workers in a wide range of positions (and salaries). One position type that has made headlines in recent weeks is the “direct care worker."

Although not typically the subject of high profile news stories these employees (e.g. home health aides) will soon be seeing a significant change in how they are paid. Nationally, the Bureau of Labor Statistics (BLS) suggests that approximately 1.9 million workers across the country would be re-classified by the Department of Labor (DOL) under the Fair Labor Standards Act (FLSA) and this could mean big changes for the fifteen-thousand or so home health aides employed in the immediate area.
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Integrating Incentive Pay into Your Performance Management Process

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When structuring an effective Performance Management process at any organization, including some type of incentive to help drive performance is a key step. Particularly in recent years, large financial incentives are not always feasible, nor are they always found to be the most impactful driver for incentivizing employees. Nonetheless, a consistently strong majority of organizations both across the region and nationally, tie pay to performance either directly or indirectly.

For a closer look at how organizations in Northeast Ohio are implementing these financially based incentives, we turn to the 2013 ERC Pay Adjustment & Incentive Practices Survey.

Types of Incentives

Annual bonus plans remain the most common type of incentive pay, with individual incentives and profit-sharing filling the second spot, depending upon the employee group being compensated. Other less common incentives reported include, longevity service awards, retirement-based profit sharing, and executive performance bonus plans for select executive level positions.
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2013/2014 Salary & Benefits Planning & Budgeting Guide

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We’ve compiled a brief compensation and benefits planning and budgeting guide to help your organization make important pay, health care, and benefits decisions this fall and into 2014. The guide summarizes the latest and most important trends we’re seeing related to administering compensation, health care, and benefits, which affect your organization as it plans for 2014.

Employers project 2.9%-3.0% pay increases for 2013/2014.

Salary budget planning surveys for 2013/2014 consistently report average actual pay increases of about 2.9% for 2013 and project pay increases of 2.9%-3.0% for 2014 for most levels of employees, in line with increases of last year. A breakdown of the projections from these surveys is summarized below.
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4 Important Guidelines for Giving Pay Increases

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4 Important Guidelines for Giving Pay Increases

Pay increases are an important part of a compensation system as they aim to reward employees based on their performance achievements, but your organization should make sure you follow these four important guidelines when administering pay increases.

1. Base pay increases on your performance management and goal setting processes.

Pay increase practices should be aligned with not only your organizational culture and best practices for your organizational size and industry, but they also should align with your organization's performance management and goal setting processes to make sure that variations in employee performance are measured accurately and fairly rewarded.
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Northeast Ohio Keeping Up with National Pay Adjustment Trends

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The 2013-2014 ERC Wage & Salary Adjustment survey results found an average projected pay adjustment of 2.9%- basically more of the same from 2013. The results from this local survey of Northeast Ohio employers are very much in line with national reports from organizations such as Hay Group and WorldatWork which repeatedly indicate that employers are hovering right around the 3.0% mark, much as they have for that past several years.

One bright spot here in Northeast Ohio is that out of the 139 participating employers only 7 indicated they are not giving any pay increases to their employees or a full 95% of employers that are providing increases in 2013. 2014’s numbers are shaping up similarly, with only 6 out of the 139 employers projecting that they will not give increases, again that’s 96% projecting increases for 2014.

As the chart below illustrates, in terms of the overall percent of employers providing increases, 2013 and 2014 (projected) have finally met and even exceeded the pre-recession levels. Seeing these adjustments continue to expand across the region’s employers is a positive sign for the region’s business community and in theory means these increases (even if small) are reaching a larger proportion of the total workforce as a result.
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Payroll Cards Facing Legal Scrutiny

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In 2013, New York’s Attorney General began investigating companies that pay hourly employees using prepaid payroll cards, with the concern that fees associated with pay card withdrawals may be insufficiently disclosed or excessive, and that the cards may decrease employees’ take-home pay which may, in some cases, result in pay below the minimum wage.

There was also concern that these cards may not comply with state laws governing printed payroll statements and written consent for using the cards; federal law which prohibits mandatory use of prepaid payroll cards as a condition of employment; and collective bargaining agreements.
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Demand for Technical Skill Sets Help Deliver Strong IT Salaries

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Information Technology (IT) continues to be an area of exceptional growth in the job market, both nationally and locally. Using data from the 2013 ERC Salary Survey, the average median salary growth of various occupational categories within IT, as set by the Bureau of Labor Statistics, can be seen below. The positive salary growth this figure illustrates is unsurprising when two key factors are considered.

Job Growth

Nationally, the field of “computers and mathematics” is predicted to see job growth as high as 22% between 2010 and 2020. Locally, the MSA (metropolitan statistical area) encompassing Northeast Ohio falls just short of those job numbers, projecting 16.1% job growth during the same time period. When compared to the overall job growth projections encompassing all occupations, nationally (14.3%) and locally (1.7%), it becomes clear that IT is seeing much more positive job growth than other industries in Northeast Ohio.
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