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September Hot Topics:
- Understanding Three Categories of Exempt Classifications
By Frank Drdek, Senior Consultant, Human Resources Professional Group - Obesity Ups the Ante for Work Comp Claims
By Eric Sheetz, Commercial Insurance Broker, The Michael Ehrenfeld Co. - High Society: Engage Top Talent with a Social Networking Recruiting Strategy
By Alden Reynoso, VP Recruiting and Client Services, Human Resources Professional Group - Webinar Invitation: Fairness From the Fair Labor Standards Act: Exempt & Non-Exempt Classifications
Presented by HRPG – Sponsored by AmCheck Payroll - EEO-1 Reporting Deadline Approaching – September 30, 2012
Use our checklist to review your options and obligations.
Understanding Three Categories of Exempt Classifications
By Frank Drdek, Senior Consultant, Human Resources Professional Group
Only ONE of the following Three Categories of Exempt Classifications really matters.
- Executive
- Professional
- Administrative
All of these classifications are important for you to know, but it is critical that you
know which one matters the most.
The Administrative Exempt Job Classification is the most critical of these because it
is the one classification that is most subjective in defining as Exempt. It is also the
classification that is most misunderstood and misclassified, thus creating the greatest
fines/back pay violations for the Labor Department to deal with.
Exempt Administrative job duties.
The most elusive and imprecise of the definitions of exempt job duties is for
exempt "administrative" job duties. The Regulatory definition provides that exempt administrative job duties are:- office/administrative or no manual work, which is
- directly related to management or general business operations of the employer or
the employer's customers, and
- a primary component of which involves the exercise of independent judgment and
discretion about
- matters of significance.
The administrative exemption is designed for relatively high-level employees whose
main job is to "keep the business running." A useful rule of thumb is to distinguish
administrative employees from "operational" or "production" employees. Employees
who produce/make/create what the business sells are not administrative employees.
Administrative employees provide "support" to the operational or production employees.
They are "staff" rather than "line" employees. Examples of administrative functions
include:
- labor relations/personnel
- payroll/finance/budgeting/accounting and tax
- marketing and advertising (as differentiated from direct sales)
- quality control
- public relations
- management information systems
-
legal and regulatory compliance
- some computer-related jobs (network, internet, database administration)
To be exempt under the administrative exemption, the "staff" or "support" work must be office or no manual, and must be for matters of significance. Clerical employees perform
office or no manual support work but are not administratively exempt.
Nor is administrative work exempt just because it is financially important, in that
the employer would experience financial losses if the employee fails to perform
competently. Administratively exempt work typically involves the exercise of discretion
and judgment, with the authority to make independent decisions on matters which affect
the business as a whole or a significant part of it.
Questions to ask might include whether the employee has the authority to formulate or
interpret company policies; how major the employee's assignments are in relation to the
overall business operations of the enterprise (buying paper clips versus buying a fleet of
delivery vehicles, for example); whether the employee has the authority to commit the
employer in matters which have significant financial impact; whether the employee has
the authority to deviate from company policy without prior approval.
An example of administratively exempt work could be the buyer for a department
store. She/he performs office or no manual work and is not engaged in production or
sales. The job involves work which is necessary to the overall operation of the store -
- selecting merchandise to be ordered as inventory. It is important work, since having
the right inventory (and the right amount of inventory) is crucial to the overall well-being of the store's business. This job involves a great deal of important judgment and
discretion, since it is up to the buyer to select items which will sell in sufficient quantity
and at sufficient margins to be profitable. Other examples of administratively exempt
employees might be planners and true administrative assistants (as differentiated from
secretaries with fancy titles). Bookkeepers, "gal Fridays", and most employees who
operate machines are not administratively exempt.
Clerical work may be administrative, but it is not exempt. Most secretaries, for example,
may accurately be said to be performing administrative work, but their jobs are
not usually exempt. Similarly, filing, filling out forms and preparing routine reports,
answering telephones, making travel arrangements, working on customer "help desks,"
and similar jobs are not likely to be high-level enough to be administratively exempt.
Many clerical workers do in fact exercise some discretion and judgment in their jobs.
However, to "count" the exercise of judgment and discretion must be about matters of
considerable importance to the operation of the enterprise as a whole.
Routinely ordering supplies (and even selecting which vendor to buy supplies from)
is not likely to be considered high enough to qualify the employee for administratively
exempt status. There is no "bright line". Some secretaries may indeed be high-level,
administratively exempt employees (for example, the secretary to the CEO who
really does "run his life"), and other employees with fancy titles (e.g., "administrative
assistant") may really be performing nonexempt clerical duties.
Exempt professional job duties.
Identifying professionally exempt employees is usually straightforward and without
controversy, often times being the easiest to classify.
-
The job duties of the traditional "learned professions" are exempt. These include
employees who perform work requiring "advanced knowledge" similar to that
historically associated with the traditional learned professions and include:
-
lawyers
- accountants (but not bookkeepers)
- engineers (with degrees/equivalent & perform work of the sort usually
performed by licensed professional engineers)
- doctors/dentists/registered nurses/pharmacists
- architects
- actuaries
- journalists/commercial artists (whether either is professionally exempt will
likely require careful analysis of what the employee actually does.
Professionally exempt work means work which is predominantly intellectual, requires
specialized education, and involves the exercise of discretion and judgment.
Professionally exempt workers must have education beyond high school, and
usually beyond college, in fields that are distinguished from (more "academic" than)
the mechanical arts or skilled trades. Advanced degrees are the most common
measure of this, but are not absolutely necessary if an employee has attained a
similar level of advanced education through other means (and perform essentially
the same kind of work as similar employees who do have advanced degrees).
Exempt executive job duties.
Job duties are exempt executive job duties if the employee:
-
regularly supervises two or more other employees, and also
- has management as the primary duty of the position, and also
- has some genuine input into the job status of other employees (such as hiring,
firing, promotions, or assignments).
Supervision means what it implies. The supervision of other employees must be a
regular part of the employee's job; supervision of non-employees does not meet the
standard. The "two employees" requirement may be met by supervising two full-time
employees or the equivalent number of part-time employees. (Two half-time employees
equal one full-time employee).
"Mere supervision" is not sufficient. In addition, the supervisory employee must
have "management" as the "primary duty" of the job. The FLSA Regulations contain a
list of typical management duties. These include (in addition to supervision):
-
interviewing, selecting, and training employees
-
setting rates of pay and hours of work
-
maintaining production or sales records (beyond the clerical)
-
appraising productivity; handling employee complaints, or disciplining employees
-
determining work techniques, the types of equipment to be used or materials
needed
-
planning the work and/or the budgets for work
-
apportioning work among employees
-
monitoring work for legal or regulatory compliance
-
providing for safety and security of the workplace
In order to determine whether an employee has management as the primary duty of
the position will require a case-by-case evaluation. A "rule of thumb" is to determine if
the employee is "in charge" of a department or subdivision of the enterprise (such as a
shift). One handy clue might be to ask who a telephone inquiry would be directed to if
the caller asked for "the boss". Typically, only one employee is "in charge" at any one
time. For example, if a "sergeant" and a "lieutenant" are working at the same time (in
the same unit or subunit of the organization), only the lieutenant is "in charge" during
that time if the lieutenant is actively involved in the sergeant's duties.
The final requirement for the executive exemption is that the employee has genuine
input into personnel matters. This does not require that the employee be the final
decision maker on such matters, but rather that the employee's input is given "particular
weight". Usually, it will mean that making personnel recommendations is part
of the employee's normal job duties, that the employee makes these kinds of
recommendations frequently enough to be a "real" part of the job, and that higher
management takes the employee's personnel suggestions or recommendations
seriously.
Please contact HRPG if you have any questions and/or concerns regarding an
employee's FLSA status. HRPG will complete a job analysis and upon review and
approval from your company, will assist in making any necessary changes to an
employee's FLSA status. Human Resources Professional Group will assist and facilitate
this process to a successful conclusion.
We invite you to contact HRPG if you would like to discuss ways that HRPG may assist your company in working through any of the HR challenges you see for 2012. Contact us at rdavies@hrpg.com or (619)421-0074.
Obesity Ups the Ante for Work Comp Claims
By Eric Sheetz, Commercial Insurance Broker, The Michael Ehrenfeld Co.
Findings from a study by NCCI Holdings, Inc., a Florida-based workers compensation
rating and research organization, were recently released regarding the effects of obesity
on workers compensation benefits.
The study shows that indemnity benefits paid to obese workers have a duration at least
five-times longer than benefits paid to those who are not obese but filed similar claims.
Generally speaking, workers that are obese have longer claim duration than those who
are not obese.
How was this study conducted?
Claims from insurance companies in 40 states as of June 30, 2010 were used to
evaluate the findings of this study.
Many controlled issues were taken into account during this study, such as primary
ICD9-code, injury year, the claimant's state, industry, gender and age. The statistical
analysis looked at claimants that had impediments that could be tied to obesity.
Obese workers, according to this study, file more claims, have higher medical costs and
miss more days due to job-related injuries than workers that are not obese.
This study was similar to one conducted by Duke University Medical School in 2007.
What can you do?
Emphasize employee wellness programs and sponsor activities that
promote healthy living. Offer guidance to those employees who request help with their
obesity issues such as nutritional and exercise information. Encourage walking during
rest and break periods and develop local resources for your employees to contact.
For more information or questions regarding your companies risk exposure, please contact Eric Sheetz, Property and Casualty Insurance Broker for The Michael Ehrenfeld Co. at ESheetz@ehrenfeldinsurance.com, (760) 809-8510.
High Society: Engage Top Talent with a Social Networking Recruiting Strategy
By Alden Reynoso, VP Recruiting and Client Services, Human Resources Professional Group
Last month, I wrote about a new trend where employees who had previously
been "hunkered down" were now looking to see what other opportunities might exist for
them. While it is indeed a good time to assess your retention strategy, it is also smart
to assess how your organization might be able to capitalize on this trend by making
an effort to capture the other team's MVPs. There is no recruiting tool better suited to
helping you do this than Social Media.
Any recruiter worth their salt will tell you there is no single item in the Recruiter's
Toolbox which will eliminate the need for all other tools. However, social networking
can augment the use of job boards and postings; enhance efforts to build strong
pipelines for future hires and drive improvements in the quality of candidate sourcing
and recruitment. In order to do so, companies need to look for a way to use social
networking sites for more than just tweeting job postings. As a matter of fact, posting
jobs on Social Media is NOT like posting jobs on a traditional board. It is a unique tool
for recruiting. You don't wield a hammer like you do a saw. If you are using Social
Media as a recruiting tool – it makes sense to put forth the energy to make sure you are
using the tool to maximum effect.
Here are four points to consider as you develop your strategy for Social Media
recruiting:
1. Educate your staff on how to use the information gathered from Social Media
sites.
Employers should keep in mind that a Social Media site is usually an informal
setting for an informal audience. It is important to understand the potential pitfalls of
using information regarding candidates gathered from Social Media sites. Employers
may have a responsibility to reject candidates with personal characteristics that will
result in unsafe job performance. Recreational drug use is one example. However,
when companies obtain information about candidates through posts on a social
network, they are unable to ensure that all of the information they uncover will be: A)
true and B) job-relevant. Train the individuals involved in the staffing process as to what
information may or may not be used when selecting candidates for hire.
2. Determine the level of desired Social Media outreach.
One of the huge ttractions for motivated candidates to use sites like LinkedIn and Facebook is that they expect
to connect with a human being. Unlike postings on job boards or corporate web sites,
social networking sites are specifically designed for personal interactions. Before
launching your campaign, think about who will manage it and how much of their time
will be spent doing so. Once you have established how big a time commitment your
organization will make to manage this process, you can begin to consider how wide to
cast the Social Media net.
3. Will you cast your social networking net wide or remain channel-specific?
When companies start considering Social Media recruiting, they often talk about
immediately creating Facebook, LinkedIn and Twitter accounts. Ok. What are you
going to do with them? Again, dynamic content and some level of personal interaction
are the keystones to effective social networking. If you don't have the resources to
cover multiple Social Media sites, it is better to pick one or two and do them well.
Determine who your target audience is and tailor your social networking to them. For
example, some companies set up different LinkedIn groups to engage different types of professionals they want to attract. Start with the outlet that best fits your company
culture and expand to others as you see fit.
4. Pay attention to your employment brand and candidate experience.
This
arguably applies to any part of your recruiting strategy, but it is never more visible as
when using Social Media to recruit. Employers need to do more than consider the
cosmetic look and feel of their postings. Know your company, know your corporate
culture and ensure that the candidate experience during the recruitment process is
reflective of how they will be treated as an employee. If you intend your brand to deliver
the message that your company is a "great place to work," then candidate interaction
through Social Media outlets should reflect that.
It is a lot to think about, but don't let it deter you. Social Media can be a great way
to engage motivated and talented candidates. Just like the organization itself, your
company's Social Media recruiting campaign will develop and strengthen over time.
(And your Facebook timeline will show it!)
For more information or questions, contact Alden Reynoso, VP Recruiting and Client Services, Human Resources Professional Group. Alden may be reached at areynoso@hrpg.com, or (760) 730-9531.
Webinar Invitation: Fairness From the Fair Labor Standards Act: Exempt & Non-Exempt Classifications
Presented by HRPG - Sponsored by AmCheck Payroll
Exempt or Non-Exempt? A Guide to Understanding the Fair Labor Standards Act
- Why are an estimated 70% of businesses not in compliance with wage & hour laws?
- Why did the number of wage & hour lawsuits filed in 2011 outnumber all other
employment lawsuits combined?
- Why do wage & hour lawsuits often involve several employees' simultaneously filing\
claims?
The Answer...
The nuances and subtleties of the wage & hour laws on exempt and non-exempt status
are unfamiliar to most businesses. This presentation on understanding the Fair Labor
Standards Act will offer clarity and supporting data on the following points:
- The Administrative FLSA test for exempt status & why it is the most common
evaluation used.
- How "directly & closely related" duties that are non–exempt can actually be exempt
duties
- Defining "production work" and why it is non-exempt despite actually being normally
exempt
- How non-exempt jobs may become exempt jobs with small changes to the job
description
- How employee perception may be more important than actual duties performed for
exempt and non-exempt classifications
This one hour webinar is sponsored by AmCheck Payroll and presented by Human
Resources Professional Group (HRPG) and will include a Q&A session where you will
receive individual and personalized responses to your questions from the speaker (via
email, at your request). As an added benefit, this webinar has been approved for one
hour of credit through the HR Certification Institute.
This webinar is offered as a complimentary service to our clients and newsletter
subscribers. We hope you can join us on September 26 at 1PM PST for this informative
and commonly misunderstood area of the Labor Law.
Please click the link to register: https://www2.gotomeeting.com/register/947372482
 The use of this seal is not an endorsement by the HR Certification Institute of the quality of
the program. It means that the program has met the HR Certification Institute's criteria to be pre-approved
for recertification credit.
EEO-1 Reporting Deadline Approaching - September 30, 2012
Use our checklist to review your options and obligations.
Who Must File
You must file Standard Form 100 (EEO-1) if you:
- Are a private employer subject to Title VII of the Civil Rights Act of 1964 (as amended by the Equal Employment Opportunity Act of 1972) with 100 or more employees, excluding:
- A primary or secondary school system;
- An institution of higher education;
- An Indian tribe;
- A tax-exempt private membership club other than a labor organization;
- Have fewer than 100 employees and your company is owned or affiliated with another company, or there is centralized ownership, control or management (such as central control over personnel policies and labor relations) so that the group legally constitutes a single enterprise, and the entire enterprise employs a total of 100 or more employees; or
- Are a federal contractor (private employer) who has 50 or more employees, is a prime contractor or first-tier subcontractors, and have a contract, subcontract or purchase order amounting to $50,000 or more or serve as a depository of government funds in any amount, or is a financial institution which is an issuing and paying agent for U.S. Savings Bonds.
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How to File
First-Time Filer
If you are a first-time filer, the EEOC Web site provides a simple registration form. The EEOC will issue a company number, which will then allow you to log in to the system to fill out the form.
Best Practices
File Standard Form 100 (EEO-1) via the Internet by September 30.
- Follow all filing requirements for your company, single establishment or multi-establishment.
Standard Form 100 (EEO-1) must be filed each year by September 30. You can do all your filing online at the EEOC's Web Site. This is the preferred method of filing and no software needs to be installed. Paper EEO-1 forms will be provided on request only and only in extreme cases where Internet access is not available to the employer. Requests for paper forms must be made to the EEO-1 Joint Reporting Committee by telephone or e-mail.
Regular Filer
If you have filed an EEO-1 form in previous years, you should find that part of the online form is pre-completed from the previous year. You can also access up to 10 years of your company's historical EEOC annual report information. This system uses encrypted files for data transfer to ensure data privacy.
Employment figures from any pay period in the third quarter, July through September, may be used. Employers who have been granted permission to use year-end employment figures in the past may still do so.
Multi-establishment Employers
All multi-establishment employers, i.e., employers doing business at more than one establishment, must file:
- A report covering the principal or headquarters office;
- A separate report for each establishment employing 50 or more persons; and
- A consolidated report that must include all employees by race, sex and job category in establishments with 50 or more employees and in establishments with fewer than 50 employees. Also include a list, showing the name, address, total employment and major activity for each establishment employing fewer than 50 persons.
- The total number of employees indicated on the headquarters report, plus the establishment reports, plus the list of establishments with fewer than 50 employees, must equal the total number of employees shown on the consolidated report.
All forms for a multi-establishment company must be collected by the headquarters office for its establishments or by the parent corporation for its subsidiary holdings and submitted in one package.
For the purposes of this report, the term "parent corporation" refers to any corporation that owns all or the majority stock of another corporation so that the latter stands in the relation to it of a subsidiary. |
Requesting an Extension
To request an extension, send an e-mail to e1.techassistance@eeoc.gov before September 30. Include your:
- Company name
- Company number
- Address and
- Contact information for the person responsible for the report
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We hope this reminder helps you keep on track with your compliance responsibilities. If you have any issues or questions, please do not hesitate to contact your HRPG representative.
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