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SHRM Believes Employers Unprepared for Older Employees In The Workforce

According to a study by the Society for Human Resource Management (SHRM), very few U.S.-based employers are ready for older employees in the workplace. Failing to follow the trend of their Asian counterparts, they are not even considering the option of recruiting and retaining older employees. Total HR Management believes taking advantage of the skills and experience of older employees is a cutting edge trend that needs to be highlighted.

older employees

Old Employees An Asset To A Workforce

The survey by the Society for Human Resource Management was conducted with 1,913 U.S.-based employers. In the survey results, only 3 percent of organizations report having a formal strategy to recruit older employees and only 4 percent have a formal retention strategy for this demographic. Moreover, as many employees in their workforces approach and reach retirement age; they are not considering what to do with such employees if they want to stay on board and put off retirement. This is a real problem.

The survey results in SHRM’s report Preparing for an Aging Workforce shows that nearly 50 percent of HR professionals said they did not think the potential loss of talent during the next one to two years would have an impact on their company. Still, showing some awareness of the issue, one-third indicated they believed it would be a problem or even a crisis in the next six to ten years.

Baby Boomers = Older Employees

As 75 million Baby Boomers reach retirement age, SHRM believes the eyes of these HR managers need to be opened, and Total HR Management agrees with our industry leader. Although Generation X, the Millennials and now Generation Z are entering the workforce, they cannot replace the experience and track records being lost. This is why older employees need to be retained and even recruited.

“Gen X and the Millennials are well-educated generations. It’s just that the need for skilled, educated and experienced workers is going up and up,” explains Jennifer Schramm, SHRM’s manager of workplace trends and forecasting. “This is why [employers] will want to hold onto their experienced and skilled older workers as long as they can.”

According to the SHRM report, the challenge for HR professionals is educating leaders and managers on the benefits and opportunities older employees offer. Such a challenge is even more important for professional employer organizations like Total HR that specialize in recruitment and selection. Total HR is helping our client companies prepare for this transition.

Are You Ready For Older Employees?

In a poll reported on in the study, “nearly two-thirds of HR professionals said their organizations employ older employees who have already retired from other companies or careers; 46 percent of those employees are a mix of full- and part-time workers, 43 percent are full-time employees and 11 percent are part time.”

The most commonly cited recruitment methods to target workers ages 55 and older are employee referrals and social media. Among those using social media to recruit older employees, 74 percent use LinkedIn and 49 percent use Facebook to find job candidates.

To help with this process, Total HR offers four approaches to take when it comes to dealing with the dual challenge and opportunity of accessing older employees and taking advantage of their abilities.

4 Approaches When It Comes To Older Employees

  1. Look beyond old stereotypes to see the talents and experiential benefits of an aging workforce
  2. Make workplaces more open to an aging workforce by providing an environment where different generations can work together and learn from each other
  3. Hire retired employees as consultants or temporary workers to help younger employees as mentors and guides
  4. Consider implementing flexible work arrangements for older employees such as part-time work, flexible hours, and telecommuting

Total HR Management Can Help

To learn more about being prepared for the challenge and opportunity of older employees, contact Total HR Management to set-up an HR audit. Please call (800) 975-5128 today to speak with an HR professional and access the help your small to mid-sized company needs. You also can take a look at the first part of this two-part article.

 

 

 

No Legal Advice Intended: This blog includes information about legal issues and legal questions.  Such materials are for informational purposes only and may not reflect the most current legal developments.  These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.

9 Tips To Help Your Company Address New FLSA Overtime Rules

As a professional employer organization, Total HR Management understands why the new FLSA overtime rules are overwhelming for many employers. When we work with our client companies, our focus is to remove such worries. If you need human resources support to keep your company moving forward, our HR managers can help you.

9 FLSA Overtime Preparation Tips

  1. flsa overtime

    FLSA Overtime Rules Need To Be Heeded

    Designate a team member to understand the details of the new FLSA overtime rules. They can work directly with your HR manager, learning what specific steps your organization needs to take. Have that team member share that knowledge with other members of your team. The more people who understand FLSA basics, the better. Although it may not be nuclear physics, sometimes it seems awfully close and quite intimidating.

  2. Educate senior managers about FLSA overtime regulations and the potential impact on the organization. Develop an action plan to address the new FLSA overtime regulations. You must be willing to acknowledge any problems with your policies and practices. You will most likely need to make changes to ensure compliance with the law.
  3. Implement timekeeping and record keeping changes. Employers may use any timekeeping method they choose as long as it is complete and accurate. For example, you may use a time clock, have a timekeeper keep track of employees’ work hours, or tell employees to keep track of their own time by using an online application. If you are a covered employer, you must keep certain records for each nonexempt worker. The FLSA does not specify a particular form for the records, but does require that the records include definitive identifying information about the employee, the hours worked, and the wages earned.
  4. Review your job descriptions now. Determine whether your job descriptions are still accurate, reflect the jobs being performed, and reflect the skills necessary to perform the job. Review employees’ actual job duties to ensure that they still fall within the administrative, executive, professional, computer, or outside sales exemptions. Doing this in advance will ensure that your job descriptions are accurate.
  5. Identify currently exempt positions or employees whose salaries are in the range between the old “white collar” threshold ($23,660) and the new threshold ($50,440). You may need to re-classify many of these employees as non-exempt and therefore overtime-pay eligible.
  6. Beware of the “rising tide effect” of salary increases on existing mid-level salaries and compensation costs, which can be steep. For instance, The Wall Street Journal reports that the University of California “faces a $39 million-a-year tab for raises to avoid paying overtime,” in light of the new FLSA overtime regulations.
  7. Develop a communications strategy for employees. It’s important for all employees, executives included, to understand that the federal government has mandated these changes nationwide. Special attention may need to be given as to why employees reclassified as non-exempt, because of the new federal rules, may be designated as hourly workers.
  8. Implement restrictive overtime policies as needed to control overall compensation costs. SHRM reports that 70% of respondents in its 2015 Overtime Regulations Survey said they would implement restrictive overtime policies as a result of the new rules. Companies also will adjust schedules to minimize overtime costs, including adopting innovative strategies and technologies to maximize scheduling productivity.
  9. If possible, shift certain overtime work now performed by newly non-exempt employees to overtime-exempt employees, part-timers, temporary workers and contractors. By shifting overtime work to these other employees, your company can save money, and isn’t that the ultimate goal?

FLSA Overtime Help & Support

Although these tips seem extensive, they are just the beginning of what is needed to address the new FLSA overtime regulations. This is why your company requires the support of a professional employer organization like Total HR. If you need help with these challenges, you should contact Total HR Management today. Please call (800) 975-5128 today to set-up an HR audit.

 

No Legal Advice Intended: This blog includes information about legal issues and legal questions.  Such materials are for informational purposes only and may not reflect the most current legal developments.  These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.

Proper Classification Of 1099 Workers Given The U.S. Department Of Labor’s Updated Definition of Independent Contractors

In light of recent updates that have narrowed the definition of independent contractors by the United States Department of Labor (DOL), the proper classification of 1099 workers is more important than ever before. As a professional employer organization (PEO), Total HR Management helps our client companies stay in compliance with DOL regulations across the board, including updates that relate to any type of employee classification.

The Affordable Care Act has raised the bar when it comes to such classifications. Given the potential for fines and penalties for independent contractor misclassification from both the Department of Labor and the Internal Revenue Service, knowledge of how to properly define the employment status of your employees and the correct classification of 1099 workers has become a business essential in the 21st century.

Classification Of 1099 Workers

classification of 1099 workers

Classification of 1099 Workers in 2016

The new DOL guidance states that independent contractors cannot be economically dependent upon the contracting company. Such an update now places a greater burden on employers when it comes to classifying independent contractors. If a person is providing personal work services for your company as an independent contractor, how do you decide whether or not they are economically dependent on that work?

Given this and other DOL updates, employers need to carefully re-evaluate such classifications. Luckily, as both human resources specialists and payroll providers, the PEO professionals at Total HR Management can offer our client companies the precise and timely support that they need.

SHRM & The Economic Realities Test

According to the Society for Human Resource Management (SHRM) when implementing an economic realities test, employers should look at six factors to keep in compliance with the latest DOL updates:

  1. The extent to which the work performed is an integral part of the employer’s business.
  2. The worker’s opportunity for profit or loss depending on his or managerial skill.
  3. The extent of the relative investments of the employer and the worker.
  4. Whether the work performed requires special skills and initiative.
  5. The permanency of the relationship.
  6. The degree of control exercised or retained by the employer.

“In undertaking this analysis, each factor is examined and analyzed in relation to one another, and no single factor is determinative,” the DOL emphasized. “The ‘control’ factor, for example, should not be given undue weight…. (Overall) The factors should not be applied as a checklist, but rather the outcome must be determined by a qualitative rather than a quantitative analysis.”

Misclassification Can Lead To Costly Settlements

Still, it must be noted that the cost of making errors can be high. For example, in April and May of 2016, there have been the settlement of a number of high profile independent contractor (IC) misclassification cases. In one case, a federal court gave conditional approval to a $226 million settlement between FedEx and its Ground Division drivers. In a financial blow to the company’s bottom line, over 2,000 drivers will receive on average over $110,000 before deductions for attorneys’ fees.

In a second case that never actually went to court, but was settled in advance, Uber got hit with a hefty settlement. In an effort to avoid further legal trouble, Uber entered into a proposed $84 million settlement agreement covering 385,000 Uber drivers in California and Massachusetts. Although the average recovery per driver will be under $200 after legal fees, the financial damage remains huge.

Your Company & The Classification Of 1099 Workers

While the gross amounts of the proposed settlements with FedEx and Uber are enormous, both companies can reasonably afford such an expense. What’s important to note is that they likely could have avoided these costly settlements if they had structured, documented, and implemented their Independent Contractor relationships in a manner that emphasized DOL compliance. Given the small to mid-sized profile of the majority of Total HR Management’s client companies, any legal case against them and any independent contractor penalties could truly do lasting damage.

The challenge is to make sure companies classify employees correctly. As SHRM explains in the conclusions to their in-depth analysis, “…most workers are employees under the FLSA’s broad definitions. The very broad definition of employment under the FLSA as ‘to suffer or permit to work’ and the Act’s intended expansive coverage for workers must be considered when applying the economic realities factors…. The correct classification of workers as employees or independent contractors has critical implications for the legal protections that workers receive, particularly when misclassification occurs in industries employing low wage workers.”

Total HR Management Can Help

If you feel you need help sorting through the DOL updates on the classification of 1099 workers, you are not alone. The HR managers at Total HR Management can guide you through such challenges, helping to make sure your company stays in DOL compliance. To learn more about what we can do to help, please call (800) 975-5128 to schedule an HR audit today.

Do You Have A Distracted Driving Policy For Employees To Ensure Safe Driving Compliance?

In 2016, employers should make sure to implement a distracted driving policy in their organizations to ensure employee safety and reduce potential questions of liability. Many employers are going further, banning the use of handheld devices while driving on the job, during work-related business or when using company property. From both a state, federal and overall safety perspective, such internal company regulation of mobile devices in the context of distracted driving has become a 21st century necessity.

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Employee Engagement A Top HR Priority In 2016

According to Gallup research, employee engagement is crucial for successful business outcomes, particularly in relation to productivity, ongoing profitability and customer loyalty. Beyond driving the innovation that mid-sized companies need to thrive, engaged employees help to increase day-to-day revenue. In this article, Total HR Management offers several strategies to create and maintain employee engagement at your company.

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