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30610860 SPECIAL REPORT Top 10 Best Practices in HR Management For 2011

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Page 1: 10 Best Hr Practices HR Management

30610860

SPECIAL REPORT

Top 10 Best Practices in HR Management For 2011

Page 2: 10 Best Hr Practices HR Management
Page 3: 10 Best Hr Practices HR Management

30610860

SPECIAL REPORT

Top 10 Best Practices in HR Management For 2011

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Executive Publisher andEditor in Chief: Robert L. Brady, J.D.

Managing Editor–HR: Patricia M. Trainor, J.D.

Legal Editor: Susan E. Prince, J.D.

Editor: Elaine V. Quayle

Production Supervisor: Isabelle B. Smith

Graphic Design: Catherine A. Downie

Production & Layout: Sherry Newcomb

This publication is designed to provide accurate and authoritative information inregard to the subject matter covered. It is sold with the understanding that the pub-lisher is not engaged in rendering legal, accounting, or other professional services.If legal advice or other expert assistance is required, the services of a competentprofessional should be sought. (From a Declaration of Principles jointly adoptedby a Committee of the American Bar Association and a Committee of Publishers.)

© 2006-2011 BUSINESS & LEGAL REPORTS, INC.

All rights reserved. This book may not be reproduced in part or in whole by anyprocess without written permission from the publisher.

Authorization to photocopy items for internal or personal use or the internal orpersonal use of specific clients is granted by Business & Legal Reports, Inc. For per-mission to reuse material from Top 10 Best Practices in HR Management for 2011,ISBN 1-55645-317-5, please go to http://www.copyright.com or contact the Copy-right Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that provides licenses and registrationfor a variety of uses.

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Top 10 Best Practices in HR Management for 2011

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©Business & Legal Reports, Inc. 30610860

Table of Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

#1 Health Care in 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

#2 FMLA Paid Leave Initiatives and the In Loco Parentis Rule . . . . . . . . .6Paid Leave Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

The In Loco Parentis Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

#3 Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9Best Practice: Ethics, Integrity, Training, Communication Steer Weyerhaeuser to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Best Practice: Yahoo! Makes Ethics Training Entertaining . . . . . . . . . . . . . . . . . . . . .14

#4 Social Networking and Blogging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16Social Networking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Blogging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

FTC Guidelines on Testimonials and Endorsements . . . . . . . . . . . . . . . . . . . . . . . . .19

Best Practice: Look to Social Media for Disaster Preparedness Updates . . . . . . . . .19

#5 Corporate Social Responsibility and the Green Movement . . . . . . . .215 Reasons Why You Need a Green Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

Going Green: Not Just Good Deeds … Good Business . . . . . . . . . . . . . . . . . . . . . . .21

Best Practice: BLR’s Green Team Helps Employees Be Enviro Conscious . . . . . . . .25

10 Tips to Go Green—And Save Some Green! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

#6 Increasing Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28Equal Employment Opportunity Commission (EEOC) . . . . . . . . . . . . . . . . . . . . . . .28

Wage and Hour Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

#7 Employee FLSA Classifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31Amendments to the Fair Labor Standards Act (FLSA) Recordkeeping Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

Amendments to the FLSA Companionship Services Regulations . . . . . . . . . . . . . .32

#8 Retirement of the Baby Boomers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33Labor Shortages Are Predicted: ‘Encore Careers’ May Be Solution . . . . . . . . . . . . . .33

U.S. Workers Toil on Through Their Twilight Years . . . . . . . . . . . . . . . . . . . . . . . . . . . .34

12 Points to Consider with Retirement Plan Options . . . . . . . . . . . . . . . . . . . . . . . . .35

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#9 Government Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36New Section 503 Disability Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36

Congressional Testimony Outlines OFCCP’s Priorities . . . . . . . . . . . . . . . . . . . . . . . .37

#10 Workplace Wellness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38What Is Wellness? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39

Legal Issues Related to Workplace Wellness Programs . . . . . . . . . . . . . . . . . . . . . . .39

Setting Up a Workplace Wellness Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42

Suggestions for Wellness Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

Get Employees Engaged in Wellness by Creating Strong ‘Culture of Health’ . . . . . .50

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51

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Introduction

The role of Human Resources is changing as fast as technology and the globalmarketplace. Historically, the HR department was viewed as administrative over-head. HR processed payroll, handled benefits administration, kept personnel filesand other records, managed the hiring process, and provided other administrativesupport to the business. Those times have changed.

The positive result of these changes is that HR professionals have the opportunity toplay a more strategic role in the business. The challenge for HR managers is to keepup to date with the latest HR innovations—technological, legal, and otherwise.

This special report will discuss the top 10 best practices in HR management for2011—in other words, how HR managers can anticipate and address some of themost challenging HR issues this year. This report will give you the information youneed to know about these current HR challenges and how to most effectively man-age them in your workplace.

#1 Health Care in 2011

According to the recent BLR® survey HR Concerns for 2011, 79% of over 850respondents claimed that healthcare costs and requirements is their number oneconcern this year. The enactment of the Patient Protection and Affordable Care Act(PPACA), as amended by the Health Care and Education Reconciliation Act of2010 (HCERA), collectively referred to as the Affordable Care Act (ACA), launchesan extended period during which far-reaching changes to the American health-care system will take effect. These reforms are built on the current employer-basedsystem and will impact every employer in the country.

Reform on this scale is multifaceted and initially takes effect in uneven incrementsbetween 2010 and 2018. The information below covers what has to be planned forin 2011, 2012, 2013, 2014, and 2018, as the pieces of the reform package come intoplay. Keep in mind that the two biggest pieces of the reform process, the individualmandate and employer play-or-pay, don’t take effect until 2014.

2011Wellness Grants for Small Employers. An amount of $200M is authorized to beappropriated for the period of fiscal years 2011 through 2015 to fund grants toemployers with fewer than 100 employees to provide their employees with accessto comprehensive workplace wellness programs.

Exclusion of the Costs for Over-the-Counter Drugs for Reimbursementfrom HRAs, HSAs, FSAs, and MSAs. Effective for taxable years beginning afterDecember 31, 2010, the costs of over-the-counter drugs not prescribed by a doctormay no longer be reimbursed through a health reimbursement account (HRA) orhealth flexible spending account (FSA) and may no longer be reimbursed on a

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tax-free basis through a health savings account (HSA) or Archer Medical SavingsAccount (MSA).

Tax on HSA and MSA Distributions Not Used for Qualified Expenses. Effec-tive for taxable years beginning after December 31, 2010, the tax on distributionsfrom a health savings account or an Archer MSA that are not used for qualifiedmedical expenses increases to 20% of the disbursed amount.

Medical Loss Ratio (MLR) Reimbursement. Beginning not later than January 1, 2011, plans in the individual and small group market must maintainan MLR of 80%, and plans in the large group market must maintain an MLR of 85%. For each plan year, plans must provide a rebate to each enrollee on apro rata basis equal to the amount of premium revenue spent on nonmedicalcosts that exceed the percentage limits.

Form W-2 Reporting of Healthcare Cost Information. Effective for tax yearsbeginning after December 31, 2010, employers are required to report on Form W-2the total cost of employer-provided group health coverage that is excluded fromthe employee’s gross income. The amount to be reported does not includeamounts excluded from income through an Archer MSA, an HSA, or employeesalary reductions to a flexible spending arrangement. The Internal Revenue Service (IRS) has stated, however, that reporting the cost of such coverage will notbe mandatory for Forms W-2 issued for 2011 (IRS Notice 2010-69).

CLASS Act. The Community Living Assistance Services and Supports Act (CLASSAct) creates a national voluntary insurance program for purchasing communityliving assistance services and supports to provide individuals with functional limi-tations with tools that will allow them to maintain their personal and financialindependence and live in the community through a new financing strategy forcommunity living assistance services and supports, establish an infrastructure that will help address community living assistance services and supports needs;and alleviate burdens on family caregivers. Employers will be encouraged to participate in the CLASS Act and adopt automatic enrollment rules that defaultemployees into the CLASS Act, starting January 1, 2011.

Benefits Summary Requirement. By March 23, 2011, national standards for usein compiling and providing a summary of benefits and coverage explanation thataccurately describes the benefits and coverage under group health plans andgroup or individual health insurance coverage are to be issued.

Simple Cafeteria Plans for Small Employers. Effective beginning after December 31, 2010, Internal Revenue Code Sec. 125 is amended to provide for simple cafeteria plans for small businesses that include a safe harbor from nondiscrimination requirements for employers that employed an average of 100 or fewer employees during either of the 2 preceding years. If an employer qualifies as a small employer, it retains the status until it employs an average of 200 or more employees during the preceding year.

2012Benefits Summary Requirement. By March 23, 2012, a summary of benefits andcoverage explanation that meets the national standards for providing a summary ofbenefits and coverage must be provided to applicants at the time of application to

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the enrollee before the time of enrollment or reenrollment, and to a policyholder orcertificate holder at the time of issuance of the policy or delivery of the certificate.

Quality of Care Reporting. No later than March 23, 2012, requirements for use by group health plans and health insurance issuers offering group or individualhealth insurance coverage to report benefits and healthcare provider reimburse-ment structures that improve health outcomes through the implementation ofactivities are to be issued. Examples of activities to be reported include qualityreporting, effective case management, care coordination, chronic disease manage-ment, and medication and care compliance initiatives; activities to prevent hospital readmissions through a comprehensive program for hospital dischargethat includes patient-centered education and counseling, comprehensive dis-charge planning, and postdischarge reinforcement by an appropriate healthcareprofessional; activities to improve patient safety and reduce medical errorsthrough the appropriate use of best clinical practices, evidence-based medicine,and health information technology under the plan or coverage; and wellness andhealth promotion activities. Plans and insurers must annually report whether thebenefits under the plan or coverage satisfy these elements.

2013Health Insurance Administration Simplification. Rules establishing a singleset of operating rules for eligibility verification and claims status must be adoptedJuly 1, 2011, and take effect January 1, 2013. Rules for electronic funds transfer andhealthcare payment and remittance rules must be adopted by July 1, 2012, andtake effect January 1, 2014. Rules for health claims or equivalent encounter infor-mation, enrollment and disenrollment in a health plan, health plan premium payments, and referral certification and authorization rules are to be adopted byJuly 1, 2014, and take effect January 1, 2016. Health plans must document compli-ance with these standards or face a penalty of no more than $1 per covered life.The penalty takes effect April 1, 2014.

Medicare tax. Effective January 1, 2013, the Medicare Part A (hospital insurance)tax rate on wages goes up by 0.9% (from 1.45% to 2.3%) on earnings over $200,000for individual taxpayers and $250,000 for married couples filing jointly. There isalso a 3.8% Medicare tax assessment on investment income from interest, divi-dends, royalties, rents, gross income from a trade or business, and net gain from disposition of property for individuals earning over $200,000 and families earningover $250,000.

FSA Contribution Limit. Effective January 1, 2013, contributions to an FSA for medical expenses are limited to $2,500 per year increased annually by the cost-of-living adjustment.

Elimination of Tax Deduction for Part D Subsidy Payment. Effective January1, 2013, the tax deduction for employers that receive Medicare Part D retiree drugsubsidy payments is eliminated.

Requirement on Employers to Inform Employees of Coverage Options.Employers are to provide to each employee at the time of hiring (or with respectto current employees, not later than March 1, 2013), written notice informing theemployee of the existence of an Exchange, including a description of the servicesprovided by such an Exchange, and how the employee may contact the Exchange

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to request assistance; if the employer plan’s share of the total allowed costs of ben-efits provided under the plan is less than 60% of such costs, the employee may beeligible for a premium tax credit under Section 36B of the Internal Revenue Codeof 1986 and a cost-sharing reduction under Section 1402 of the PPACA if theemployee purchases a qualified health plan through the Exchange; and if theemployee purchases a qualified health plan through the Exchange, the employeewill lose the employer contribution (if any) to any health benefits plan offered bythe employer and that all or a portion of such contribution may be excludablefrom income for federal income tax purposes.

2014Individual Mandate. U.S. citizens and legal residents will be required to havequalifying health coverage beginning in 2014. Those who do not have coveragewill be required to pay a yearly financial penalty of the greater of $695 per per-son (up to a maximum of $2,085 per family) or 2.5% of household income,phased in from 2014–2016. There will be exceptions given for financial hardshipand religious objections.

Employer Play or Pay—The Employer Mandate. Effective in 2014, employerswith more than 50 employees that do not offer coverage and have at least one full-time employee who receives a premium assistance tax credit must pay a fee of$2,000 per full-time employee. The first 30 employees are not counted for assessingthe fee. Employers with more than 50 employees that offer coverage but have atleast one full-time employee receiving a premium tax credit will pay the lesser of$3,000 for each employee receiving a premium credit or $2,000 for each full-timeemployee. Employers that offer coverage will be required to provide a voucher toemployees with incomes below 400% of the poverty level if their share of the pre-mium cost is between 8% and 9.8% of income to enable them to enroll in a plan inan Exchange and will not be subject to the above penalty.

Large Employer Automatic Enrollment Requirement. Effective in 2014, largeemployers with more than 200 full-time employees that offer coverage will berequired to automatically enroll employees in the employer’s lowest cost plan ifthe employee does not sign up for employer coverage or does not opt out of cover-age. Any automatic enrollment program must include adequate notice and theopportunity for an employee to opt out of any coverage.

Insurance Exchanges for Individuals and Small Businesses. By 2014, state-based American Health Benefit Exchanges and Small Business Health OptionsProgram (SHOP) Exchanges, administered by a governmental agency or nonprofitorganization, are to be operating so that individuals and small businesses with upto 100 employees can purchase qualified coverage.

Guaranteed Issue, Renewability, and Rating Variation Requirements. Effec-tive January 1, 2014, insurers will be required to guarantee issue and renewabilityand allow rating variation based only on age (limited to 3-to-1 ratio), premium rat-ing area, family composition, and tobacco use (limited to 1.5-to-1 ratio) in the indi-vidual and the small group market and the Exchanges.

Annual Limits. Effective for plan years beginning on or after January 1, 2014,plans and insurers may no longer impose annual dollar limits on coverage.

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Limit on Waiting Periods. Effective for plan years beginning on or after January1, 2014, insurers and plans must limit any waiting periods for coverage to 90 days.

Wellness Incentives. Effective for plan years beginning on or after January 1,2014, employers may offer employees rewards of up to 30% (increasing to 50%, ifappropriate) of the cost of coverage for participating in a wellness program andmeeting certain health-related standards.

Preexisting Condition Exclusions. The application of preexisting conditionexclusions for plan years beginning on or after January 1, 2014, is prohibited.

Comprehensive Health Insurance Coverage. Effective for plan years beginningon or after January 1, 2014, a health insurance issuer that offers health insurancecoverage in the individual or small group market must ensure that such coverageincludes the essential health benefits package that includes at least the followinggeneral categories and the items and services covered within the categories:

� Ambulatory patient services

� Emergency services

� Hospitalization

� Maternity and newborn care

� Mental health and substance use disorder services, including behavioralhealth treatment

� Prescription drugs

� Rehabilitative and habilitative services and devices

� Laboratory services

� Preventive and wellness services and chronic disease management

� Pediatric services, including oral and vision care

Limits on Cost Sharing and Deductibles. Effective for plan years beginning on or after January 1, 2014, a group health plan may not provide any annual costsharing in excess of those that apply to HSAs.

2018Excise Tax on Cadillac Plans. Effective January 1, 2018, an excise tax is imposedon insurers of employer-sponsored health plans with total values that exceed$10,200 for individual coverage and $27,500 for family coverage.

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#2 FMLA Paid Leave Initiatives and theIn Loco Parentis Rule

Paid Leave InitiativesSince 2007, a growing number of states and at least one city have passed laws toallow employees to have or use paid leave for family and medical needs. Forexample:

� California has become the first state to provide paid time off for workers to pro-vide care for a child, spouse, parent, or domestic partner with a serious healthcondition, or to bond with a new child (newborn, adopted, or foster carechild).

� The District of Columbia entitles employees covered by the District Family andMedical Leave Act to paid sick and “safe” leave for use under certain circum-stances.

� Maryland law requires that employers with 15 or more employees that providepaid leave allow employees to use their paid leave (sick, vacation, or compen-satory time) for the illness of an immediate family member.

� Washington state has passed a law (currently scheduled to become effective in October 2012) requiring paid family leave, administered under a state-runinsurance program. Under the law, employees are entitled to up to 5 weeks’paid family leave because of the birth of a child, in order to care for the child,or because of the placement of a child with the employee for adoption.

� New Jersey provides eligible employees with up to 6 weeks of temporary disability benefits while taking leave under the state family leave law or thefederal FMLA to care for a family member with a serious health condition or to care for a newborn or newly adopted child during the first 12 months following birth or placement for adoption.

� The city of San Francisco approved a ballot measure that requires employersto provide paid sick leave to employees in the city.

State-mandated paid leave provisions are gaining popularity. As a result, employersshould confirm the status of their state leave laws to determine if any paid leaveprovisions exist, and ensure that their policies and practices take both state andfederal leave laws into account.

The In Loco Parentis RuleIn its first Administrator’s Interpretation addressing the Family and Medical LeaveAct (FMLA), the U.S. Department of Labor (DOL) discussed the issue of nontradi-tional families and the in loco parentis qualification under the federal law. It is afact of life that children today might have more than two parents, fewer than twoparents, parents of the same gender, and any variety of other parental arrange-ments. These “nontraditional” family units have created confusion for some

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employers when it comes to determining eligibility for family leave, particularly inthe absence of a legal or biological parent-child relationship.

In response, DOL clarified the definition of the parental relationship under theFMLA. DOL’s clarification leaves no doubt that all families—including those in the lesbian/gay/bisexual/transgender community—are protected by the familyleave laws.

Family Leave Rights

Under the FMLA, an eligible employee can take a job-protected, unpaid leave ofabsence for up to a total of 12 workweeks in a 12-month period for:

� The birth or care of a newborn

� The placement of a child for adoption or foster care

� The care of a child with a serious health condition

Covered children include the child of a person standing in loco parentis to thatchild. The FMLA does not require a legal or biological relationship with the child.

Who Stands in Loco Parentis?

So which employees who don’t have a legal or biological relationship with a childare nonetheless entitled to family leave related to that child? According to therecent DOL Administrator’s Interpretation, the FMLA regulations define the term “inloco parentis” to include those individuals with day-to-day responsibilities to carefor and financially support a child (DOL Administrator’s Interpretation No. 2010-3).

The interpretation explains, however, that the regulations don’t require anemployee who intends to assume parental responsibilities to establish that he orshe provides both day-to-day care and financial support for that child to stand. Forexample, an employee who provides day-to-day care for an unmarried partner’schild, but who doesn’t financially support the child, would be entitled to take leaveto care for that child in the case of a serious health condition. Employers shouldapply the same standard to requests for leave for the birth of a child and to bondwith a child within the first 12 months after birth or placement.

The fact that a child has a biological parent in the home, or has both a mother anda father, does not mean the child can’t also be the child of an employee without alegal or biological relationship with the child for leave purposes. A child of divorce,for example, could have four parents—the biological parents and the stepparents.Each of those parents would have equal rights to take leave to care for the child; theFMLA does not limit the number of parents a child can have for leave purposes.

Examples of In Loco Parentis Relationships

DOL has provided the following examples of employees who would be entitled tofamily leave by virtue of standing in loco parentis to children:

� An uncle who takes care of his young niece and nephew because their singleparent is on active military duty

� An aunt who assumes responsibility for raising a child after the death of thechild’s parents

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� A grandmother who assumes responsibility for her grandchild because herown child is incapable of providing care

� An employee who intends to share parenting responsibilities with his or hersame-sex partner

However, an employee who takes care of a child while that child’s parents are onvacation wouldn’t be considered in loco parentis or eligible for leave.

How to Handle Child-Related Leave Requests

Whether an employee stands in loco parentis to a child—and thus is entitled tofamily leave—will depend on the particular facts and circumstances.

Fact Sheet

In order to provide further information on the use of in loco parentis relationshipsunder the FMLA, DOL issued a helpful fact sheet, “FMLA Leave to Care for a Parentwith a Serious Health Condition on the Basis of an In Loco Parentis Relationship”(Fact Sheet #28C), which contains examples of situations in which FMLA leave tocare for a parent may be based on an in loco parentis relationship.

Those situations include:

� An employee may take leave to care for his aunt with a serious health condi-tion, if the aunt was responsible for his day-to-day care when he was a child.

� An employee may take leave to care for her grandmother with a serious healthcondition if the grandmother assumed responsibility for raising the employeeafter the death of her parents when the employee was a child.

� An employee who was raised by same-sex parents, only one of whom has abiological or legal connection with the employee, may take leave to care forthe nonadoptive or nonbiological parent on the basis of an in loco parentisrelationship.

According to DOL, unless an in loco parentis relationship existed when theemployee was a child, an employee is not entitled to take FMLA leave to care for a grandparent, an aunt, or another noncovered relative with a serious healthcondition.

Under the FMLA, persons who are in loco parentis include those with day-to-dayresponsibilities to care for or financially support a child. Some factors to be con-sidered in determining in loco parentis status include:

� The age of the child;

� The degree to which the child is dependent on the person;

� The amount of financial support, if any, provided; and

� The extent to which duties commonly associated with parenthood are exercised.

Documentation of an In Loco Parentis Relationship

DOL’s fact sheet clarifies that an employer’s right to documentation of family relationship is the same for an employee who asserts the need to care for an indi-vidual who stood in loco parentis to the employee as it is for a biological, adoptive,

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step, or foster parent. Such documentation may take the form of a simple statementasserting the relationship.

For an employee seeking leave to care for an individual who stood in loco parentisto the employee, such statement may include, for example, the name of the individ-ual and a statement of the individual’s in loco parentis relationship to theemployee when the employee was a child. An employee should provide sufficientinformation to make the employer aware that the individual in need of care stoodin loco parentis to the employee when the employee was a “son or daughter” (29 CFR Section 825.122).

In Loco Parentis Status and Other FMLA Requirements

DOL makes clear that in loco parentis status under the FMLA does not change thelaw’s other requirements, such as those regarding coverage, eligibility, and qualify-ing reasons for leave. All requirements must be met for FMLA protections to apply.An employee asserting a right to FMLA leave to care for a parent who stood in locoparentis to the employee may be required to provide notice of the need for leaveand to submit medical certification of a serious health condition consistent withthe FMLA regulations.

#3 Ethics

Workplace ethics is a standard of acceptable behavior on the job. It is a set of rulesby which to judge decisions and conduct in the workplace. Many corporate lead-ers who fail to act ethically have been prosecuted and incarcerated, and the U.S.Congress has legislated significant changes in financial reporting and other laws toenforce ethical behavior.

The Sarbanes-Oxley Act of 2002 (SOX) and the Federal Sentencing Guidelineshave placed strict legal requirements on covered employers. Now, the Dodd-FrankWall Street Reform and Consumer Protection Act (the Dodd-Frank Act) createsnew whistleblower protections and expands those in existing law.

Making ethical choices on the job, even for the ethically minded, is not always easy.There may be many reasons that drive people to cross the line and act unethically.Here are a few examples:

� Conflicts of interest force employees to choose between self-interest and theinterests of co-workers, the department, or the organization. Sometimes thechoice is between the interests of a customer and the interests of the organiza-tion, or between the community and the organization.

� Sometimes it is hard to draw a line between personal and business relation-ships. Employees forge friendships with co-workers, yet may have to make professional choices that do not seem very friendly. For example, if a co-workerdoes something wrong, an employee may have to report the situation. If a customer with whom an employee has a good relationship tries to use the relationship in some unethical way, the employee is in a difficult situation.

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� Massaging the truth, telling “little white lies,” and failing to tell the whole storycan all have an effect on the outcome of a situation.

� Confidential information is exactly that—confidential and privileged. Ethically,employees cannot use any confidential business information for self-gain orpass along such information to benefit friends or family, whether that informa-tion is about the organization or its customers.

� Laws and regulations are another problem area. There are many confusinglaws. Even if an employee understands the law, he or she may not agree with it.It can be tempting to cut corners or forget about the details.

� Pressure to succeed, pressure to get ahead, pressure to meet deadlines andexpectations, and pressure from co-workers, bosses, customers, or vendors toengage in unethical activities or at least look the other way can drive people todo things they would not normally do.

� Some people make unethical choices because they are not sure about whatreally is the right thing to do. Ethical problems are often complicated, and theproper choice may be far from obvious.

� Self interest, personal gain, ambition, and downright greed are at the bottom ofa lot of unethical activity in business. Also, there are those who simply neverlearned or do not care about ethical values. Because such individuals have no personal ethical values, they do not have any basis for understanding orapplying ethical standards in business.

� Misguided loyalty can cause employees to lie because they think that in doingso, they are being loyal to the organization or to their bosses.

The Dodd-Frank Act provides significant financial incentives for employees to disclose to government officials what they believe may be illegal conduct by theiremployers. Below is a summary of the laws affected by the Dodd-Frank Act’swhistleblower provisions.

Sarbanes-Oxley Act of 2002. SOX prohibits retaliation against employees of publicly traded companies who report acts of mail, wire, bank, or securities fraud;fraud against shareholders; or violations of any rule or regulation of the Securitiesand Exchange Commission (SEC) to their supervisors or other appropriate offi-cials within their companies or federal officials with the authority to remedy thewrongdoing.

The law also prohibits retaliation against employees who assist in any investigationof such violations or participate in any proceeding related to an alleged violationof these laws (18 USC Sec. 1514A). Employees claiming retaliation under SOX mustexhaust administrative remedies before bringing an action in court. Complaintsare handled by DOL. If DOL does not issue a ruling within 180 days, the employeemay seek a trial in federal court.

To assert a claim under SOX, an employee must show that he or she had a good-faith and objectively reasonable belief that the employer’s conduct was unlawful(Day v. Staples, Inc., 555 F.3d 42 (1st Cir. 2009)). The mere possibility of, or specula-tion about, illegal activity is insufficient (Livingston v. Wyeth, 520 F.3d 344 (4th Cir.2008)). However, it is not necessary that the employer actually was violating the law.

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In addition, an employee need show only that the protected activity was a con-tributing factor to the retaliatory employment action taken against him or her (Van Asdale v. International Game Technology, No. 07-16597 (9th Cir. 2009)). On the other hand, the employer must show, by clear and convincing evidence, that itwould have taken the same adverse action in the absence of protected activity(Collins v. Beazer Homes USA, Inc., 334 F. Supp.2d 1365 (N.D. GA 2004)).

SOX and discrimination claims. The 3rd Circuit Court of Appeals (coveringDelaware, New Jersey, Pennsylvania, and the U.S. Virgin Islands) has held that anemployee who brings an unsuccessful SOX claim is precluded from then suing the employer for employment discrimination based on the same set of facts (Tice v. Bristol-Myers Squibb Co., No. 07-3977 (3d Cir. 2009)).

The Dodd-Frank Act clarified some unsettled SOX issues. For example, courts weresplit on whether SOX grants whistleblowers a right to a jury trial. The Dodd-FrankAct makes clear that jury trials are available under the law. In addition, the Dodd-Frank Act amends SOX by adding the following provisions:

� Nonpublicly traded subsidiaries of publicly traded companies are now covered by SOX.

� Nationally recognized statistical ratings organizations are not covered by SOX.

� The statute of limitations is extended from 90 days to 180 days.

� Predispute arbitration agreements are prohibited under SOX.

� Individuals cannot waive their rights or remedies under SOX.

Securities and Exchange Commission Act (SEC Act). The Dodd-Frank Act cre-ates new whistleblower protections under the SEC Act. Employees who provide infor-mation regarding securities law violations are entitled to between 10% and 30% ofmonetary sanctions recovered that exceed $1 million. Employers may not retaliateagainst employees who provide information regarding securities law violations toSEC, assist in the SEC’s judicial or administrative investigations, or make required orprotected disclosures under SOX or other laws subject to SEC jurisdiction.

Employees claiming retaliation may bring a claim in federal court, and if they prevail, they may be awarded double back pay, attorney’s fees, and other costs.Employees must bring their claim within 6 years of the retaliation, or within 3 yearsafter the employer knew or should have known of the retaliatory conduct; in nocase can a claim be made more than 10 years after the retaliation.

Note: Practically speaking, this provision gives SOX plaintiffs the opportunity tobring a claim in federal court without first following the administrative proceduresrequired by SOX.

Commodity Futures Trading Commission (CFTC). The Dodd-Frank Act createsa whistleblower program to protect employees who provide information related toviolations of the Commodity Exchange Act or assist in an investigation or judicialor administrative action based on such information.

As with the SEC Act, CFTC whistleblowers are eligible to receive 10% to 30% of anyfines recovered by CFTC that exceed $1 million. Also, individuals may bring retalia-tion claims in federal court. Predispute arbitration agreements are prohibited, asare waivers of rights under the Act. However, unlike the SEC Act, complaints underthe CFTC whistleblower provisions must be brought within 2 years of the violation.

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Consumer Financial Protection Bureau. The Dodd-Frank Act creates a Bureauof Consumer Financial Protection and provides whistleblower protections foremployees who work in the consumer financial services sector. These employersmay not retaliate against an employee “performing tasks related to the offering orprovision of a consumer financial product or service” who has:

� Provided information to his or her employer, the Bureau, or any local, state, orfederal authority relating what the employee reasonably believes to be a viola-tion of one of the consumer financial services laws protected by the Bureau orother Bureau rules

� Testified in any proceeding related to enforcement or administration of theConsumer Financial Protection Act of 2010, any of the other laws protected bythe Bureau, or Bureau rules

� Filed or instituted any proceeding under federal consumer financial law

� Objected to, or refused to participate in, any activity, policy, practice, or assignedtask that the employee reasonably believed to be in violation of any law sub-ject to the jurisdiction of or enforced by the Bureau

Employees who believe they have been retaliated against for taking any of theactions set forth above may file a complaint with DOL. If, after an investigation,DOL finds in favor of the employee, it will order the employer to take affirmativeaction to abate the violation.

In addition, the employee will be awarded back pay, reinstatement, compensatorydamages and, upon request, attorney’s fees up to $1,000. If DOL does not issue a final order within 210 days after the employee filed the complaint, or within 90 days after it has issued a written determination on the claim, the employee mayfile suit in federal court.

As with other whistleblower provisions under the Dodd-Frank Act, employees maynot waive their rights under this provision of the Dodd-Frank Act. Also, predisputearbitration agreements are prohibited.

False Claims Act. Under the False Claims Act, an individual may bring a courtaction, known as a qui tam action, against any person who knowingly makes afalse claim for payment from the government (31 USC Sec. 3729 et seq.). Employersare prohibited from retaliating against employees who participate in a qui tamaction. Employees who prevail on a retaliation claim may be entitled to reinstate-ment, as well as double back pay, special damages, costs, and attorney’s fees.

The Dodd-Frank Act expanded covered individuals to include not only the whistle-blower but also “associated others.” It also provides that employees have 3 yearsfrom the time of the retaliation to bring a claim.

Best Practice: Ethics, Integrity, Training, Communication Steer Weyerhaeuser to SuccessWith a long-term, companywide ethics and business conduct program, Weyer-haeuser Company has had an organizational code of ethics in place since 1976and has received numerous awards for its efforts. The latest honor was beingnamed to the “World’s Most Ethical Companies” list by the Ethisphere Institute forthe second consecutive year in 2010.

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Weyerhaeuser Company (http://www.weyerhaeuser.com), an international forest products company, began operations in 1900. The organization grows andharvests trees, builds homes, and makes a range of forest products. Weyerhaeusermanages its timberland on a sustainable basis in compliance with internationallyrecognized forestry standards, and at the end of 2009, employed approximately14,900 employees in 10 countries and in more than 70 primary locations.

Melissa Morris, director of Ethics and Business Conduct, says, “A successful, well-rounded ethics and business conduct program requires a culture of integrity, andit’s more than having a code of ethics. For over 100 years, we have had a reputationof conducting business honestly and with integrity. Our reputation is really due toour heritage and to our employees. Protecting our reputation has been essential toour success.”

The Ethics Code

The Weyerhaeuser Code of Ethics, a comprehensive, 26-page document sharedwith all employees in a booklet, online through the employee intranet, and dis-cussed during new employee orientation, was most recently updated in April 2010and can be found at http://tinyurl.com/2du8lz9.

The overview of the Code highlights the fact that not only are employees expectedto act with integrity and conduct business and themselves in a way that protectsthe company’s reputation for fairness and honesty, but they are also expected todemonstrate ethical leadership by raising questions and concerns about the rightthing to do.

Every 3 to 4 years, Weyerhaeuser’s Code is updated through partnering with appro-priate internal subject matter experts, says Morris. “For example, I would involve ourintellectual property law attorney in changes to the intellectual property section.”In addition, a “series of leaders that includes the president and chief executive officer and the board of directors reviews all changes to the Code,” she explains.

Weyerhaeuser’s culture of integrity is maintained through the leadership makingprincipled and ethical decisions and is also employee driven, Morris notes. “Anexample is that our leaders set the tone by discussing ethical business conductand role modeling. Many managers conduct leader-led ethics training so they’rerole modeling at the same time that they’re educating employees about ethics andhow it applies to their jobs.”

She comments that the Code provides a framework for employees to guide theirdecision making, but education and ongoing communication also provide essen-tial elements to making ethics and integrity the principles by which Weyerhaeuseremployees function.

The education starts during new employee orientation, which includes a moduleon ethics.

Training, Communication

All employees are expected to stay current with the code of ethics and businessconduct by participating in leader-led (with a PowerPoint® presentation) or onlinetraining that includes ethical dilemmas and requires employees to make decisionsthrough quiz questions. Companywide ethics training is mandatory. This year, for

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example, 85% of employees have already completed the training on the updatedcode of ethics, and 100% completion is expected by year-end, notes Morris.

Ongoing communication regarding ethics is handled through the online employeenewsletter, the ethics website on the employee intranet, and through other commu-nications channels. In addition, managers may use other internally developed ethical dilemmas in supplemental discussions with employees, explains Morris.

Morris says that when employees have ethical concerns, they may report themlocally, for example, to their managers, a plant manager, or the HR function.

Best Practice: Yahoo! Makes Ethics Training EntertainingLearning about corporate codes of ethics and compliance issues doesn’t have tobe boring for employees. In fact, it can be entertaining, interactive, and online.Yahoo!, headquartered in Sunnyvale, California, provides the proof.

Dave Farrell, vice president and chief compliance and ethics officer, explains that 2 years ago, when he was relatively new at Yahoo! (http://info.yahoo.com), he inter-viewed senior leaders and executives to determine what should be included in acode of ethics and compliance program. The Code of Ethics now reflects Yahoo!’svalues and unique, international work culture.

The tagline added to the code is “Winning with Integrity.” The code is comprehen-sive and available for viewing at http://yhoo.client.shareholder.com/documents.cfm.(It is the second listing under the “Documents” heading.)

Next came the challenge of presenting the Code of Ethics to the approximately14,000 employees in a way that would be easily accessible and entertaining, and provide them with a good understanding of the new code and how to apply it.

The process that Yahoo! went through to create the training program, On the RoadWith the Code, involved internal collaboration with the Ethics and Compliancestaff, Marketing and Public Relations, and HR and Finance, and included an external partner, The Network, explains Farrell. “The Network (www.tnwinc.com/index.aspx), a provider of incident-management solutions to help clients foster anethical culture, helped us take the vision that we had and helped us to expand it,improve it, and execute it.

“We ran focus groups of employees early on to talk about what employees liked inan online training program, what would be effective, and what their experiencewas [with codes of ethics] so we made sure we were on the right track,” notes Farrell. “We also had to make sure that this training program was not U.S.-centric(i.e., English-centric) and make it relevant from a global perspective. We had ittranslated into five or six languages so that employees taking it anywhere in theworld would feel an effort had really been made to address them and have it resonate with them.”

As the training program was being created, the focus groups provided feedback atdifferent stages so the program could be made even better, notes Farrell.

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The Learning Modules

The learning modules comprising On the Road With the Code include Conflictsof Interest, Anticorruption, Export Controls, General Ethics and Integrity, andInsider Trading.

“As you [an employee] take the course, you learn different subject areas of ethicsand compliance and at the end of each one are given several different scenarioswhere the user interacts with the training program,” says Farrell. “For example, theConflicts of Interest module uses a game show approach where the Yahoos[employees] play a game and decide whether a conflict of interest does exist ordoesn’t exist.”

Blending eye-catching design elements and customized, Yahoo!-specific content,the company’s Code of Ethics was transformed into a ready resource for employ-ees that began with a message from the CEO (as explained by The Network’s whitepaper about the creation of the program).

The training is mandatory. Every Yahoo! employee went through the program, andnew employees must go through the program within 60 days of their hire, says Farrell. The Yahoos provided positive feedback about the training in their evalua-tions of it, and inquiries and questions regarding ethics concerns increased aseach group of Yahoos participated in the program, he adds.

Other Ethics Resources

The online training program is housed on a website available through Yahoo!’sintranet, which includes resources such as additional training on ethics topics,related policies, contact information, and the ability for Yahoos to ask questionsand raise concerns about practices that may be violating the Yahoo! Code ofEthics, notes Farrell. Concerns may also be reported via a telephone hotline.

Farrell explains that in order to keep ethics and compliance on Yahoos’ minds, newanimated vignettes, called Spotlights, put together once a month with MarketingCommunications, highlight scenarios touching on a topic area of On the RoadWith the Code and are made available on the employee intranet.

Creating Your Program

“You must have executive management commitment to do something like this,”says Farrell. “We were fortunate to have that. The CEO and board [of directors] were absolutely supportive of us doing this, getting it done, funding it and making it mandatory. Your ethics and compliance program is only as good as the commit-ment and engagement of [the leaders] at the top.”

Farrell further suggests that you “do exactly what we did—spend a lot of effort atthe front end to solicit input and feedback from employees throughout the organi-zation. Bounce your great ideas off your employees [audience] to make sure youare on the right track.”

He cautions that you may have one impression of what will really resonate with employees, but you need to make sure you’re meeting their needs and expectations in terms of quality, approach, and content, and also that the content is relevant to your unique industry.

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#4 Social Networking and Blogging

BLR’s HR Concerns for 2011 survey asked respondents, “Have you caught any ofyour employees negatively blogging about your company or mentioning it in aninappropriate manner on a social networking site?” One quarter of the HR profes-sionals who answered have faced this problem with an employee.

Social NetworkingRecently, employers have recognized that social networking sites such as Twitter,Facebook, LinkedIn, and MySpace can be useful marketing and recruiting tools.Likewise, employees have increasingly been utilizing social networking sites for avariety of uses, both personal and professional. Although these sites can be benefi-cial, their use can also have risks.

Discrimination. Some employers review social networking sites as a method ofscreening applicants. Generally, once an applicant or employee posts somethingon a public domain, such as a social networking site, an employer is free to view it.However, by viewing candidate profiles, employers may learn more information(e.g., race, disability, age, religion, family/marital status, sexual orientation) than theemployer could legally ask about directly.

Therefore, it is critical that employers base all interviewing and hiring decisions onjob-related criteria. Employers must also be aware that everything they find on asocial networking site may not be current, accurate, or even placed there by theprospective applicant, as users of these sites sometimes “pretext” or pretend to besomeone else.

Background check laws. The federal Fair Credit Reporting Act (FCRA) requiresemployers to obtain applicants’ consent when a third party conducts a back-ground investigation. Some states also have their own background check laws. It isunclear whether these laws would require consent from an applicant before anemployer or third party conducted an Internet search as part of a backgroundcheck. However, even if not legally required to do so, employers should considergetting consent so that applicants are on notice that the information they post onsocial networking sites may be reviewed by the employer.

Monitoring employee use of social networking sites. There is little case lawaddressing the monitoring by employers of employees’ social networking posts.However, the few cases in this area suggest that courts will be reluctant to upholdan invasion of privacy claim (whether based on the federal constitution or statecommon law) when an employee voluntarily posts information on a public site.But the outcome might be different if employees set up an invitation-only site andhave an expectation that only invited users will be able to read their posts.

For example, a federal district court in New Jersey held that employees could pro-ceed with their invasion of privacy claim when they were fired after uninvitedcompany managers accessed their invitation-only Web discussions of workplacegrievances (Pietrylo v. Hillstone Restaurant Group, No. 06-5754 (D. N.J. 2008)). Thecourt also permitted the employees to proceed with their claim that the managersviolated the federal SCA and similar state law. The employees argued that one of

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the managers pressured an employee to provide him with her password to the site. The court reasoned that if proven, this would show a violation of the StoredCommunications Act (SCA) and state law, because authorization to view the sitewas not “freely given.”

In contrast, a California state court rejected an invasion of privacy claim by a col-lege student who posted an essay highly critical of her home town on a social networking site (Moreno v. Hanford Sentinel, 172 Cal. App. 4th 1125 (2009)). The student’s former school principal forwarded the post to a local newspaper thatpublished it. The student and her family were then subject to hostile treatment,including some death threats from community members. The student claimed that the school principal invaded her privacy by sending the post to the newspa-per. The court rejected her claim, noting that she posted the essay on a social networking site available to anyone with Internet access. The court did, however,permit the student to pursue a claim of intentional infliction of emotional distressagainst the principal.

On the basis of these cases, employers should be aware that while it may not be aninvasion of privacy to access an employee’s public social networking site, actionstaken based on the information on the site may lead to liability under other legaltheories. Moreover, coercing an employee to provide access to a private site maybe an invasion of privacy, as well as a violation of federal and state law.

Employers should also keep in mind that some states have laws prohibitingemployers from taking adverse action against an employee for engaging in legalactivities while off duty. An employer in a state with such a law may face liability ifit takes adverse action against an employee because of the employee’s legal activi-ties shown on a social networking site.

Practice tip: Because this area of the law is in its infancy, employers should con-sult with legal counsel before taking adverse action against an employee becauseof his or her posts on a social networking site.

Right to organize. Another possible concern for employers that monitoremployee use of social networking sites is the National Labor Relations Act(NLRA), which protects employees’ right to engage in concerted activity regardingterms and conditions of employment. The NLRA applies to both unionized andnonunionized workplaces. If employees use social networking sites to discussemployment conditions, employers may be liable for an unfair labor practice ifthey appear to be interfering with those discussions.

Employees’ use of social networking sites. Employers may find that employeesuse social networking sites to post positive information about their organization’sproducts or work culture. Unfortunately, employee posts can also be detrimental toemployers. Therefore, employers should have policies in place setting forth theirexpectations regarding employee’s social networking as it relates to the employer.Such policies should prohibit:

� Harassment of co-workers or customers;

� Interference or disruption of work because of social networking;

� Exposing trade secrets or other proprietary company information; and

� Disparaging comments about the company or its employees.

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It is also a good idea to train employees on the proper and improper use of socialnetworking at or relating to work.

BloggingA blog (short for “Web log”) is an online journal where the writer posts his or heropinions on the Internet about any topic—including the workplace. Blogging hasgrown quickly in recent years both with regard to the number of individuals read-ing and posting to blogs and the number of blogs available on the Internet. Therehave been a number of highly publicized cases in which employees were disci-plined or fired for disclosing confidential or proprietary information about theircompanies and/or describing their employers in an unflattering light.

Legal considerations.When addressing blogging by employees, employersshould be aware of legal issues such as the employee’s right to free speech andfree association and the right to be free from restriction on off-duty activities. Many states prohibit employers from taking action against employees who engagein lawful off-duty activities. However, blogs can also be used to harass or defameco-workers or others. If the company allows the employee to use company facili-ties to create or maintain the blog, the company may be liable for the illegalactions of the employee.

In order to prevent inappropriate blogging, employers should consider adding ablogging provision to any existing Internet or electronic communication policy orcreating a separate policy on blogging.

Blogging Policy

Issues and questions to consider when formulating a blogging policy include:

� Confidentiality. Describe what obligations employees have to maintain thecompany’s and customers’ proprietary information in confidence (includingexisting policies, contracts, and laws regulating confidential information).

� Respect of dignity. Include a statement that the blogger should respect the dignity of others and refrain from posting personal information about orpictures of co-workers, supervisors, or managers.

� Competitors. May employees use a blog to tout competitors? Criticize com-petitors? Disparage competitors? Defame competitors?

� Identification. Are employees permitted to reference the company in theirblog entries? If yes, employees should be asked to include a disclaimer statingthat the blog posting represents their personal opinions and is not the officialposition of the company.

� Business developments/ideas. If an employer requires employees to dis-close all business developments or ideas that are within the scope of the company’s business, include such a statement in the blog policy.

� Media. May employees comment to the media about the company’s business or about customers? May they publicly criticize customers? Vendors?Co-workers? Supervisors or managers? The company?

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� Facilities. May employees use company facilities to develop, design, andmaintain their websites/blogs? Are employees permitted to read and post mes-sages to blogs during work time or from the workplace?

� Monitoring. State that the company monitors its facilities (Internet, computersystems, networks, etc.) for compliance with this policy and monitors the useof its name and trademarks on the Internet.

� Deleting. State that the company will delete from its website, files, computersystems, and storage media any unauthorized materials it may find, at any time,and without notice.

� Correlate with other policies. Include references to related policies such ascomputer and Internet use policies, confidentiality, duty of loyalty, media,harassment, proprietary rights, copyrights, and the like.

� Discipline.What discipline will be imposed if the employee violates the pol-icy? Generally, employers should reserve the right to decide the appropriatelevel of discipline in any given circumstance, up to and including the immedi-ate termination of employment.

FTC Guidelines on Testimonials and Endorsements The Federal Trade Commission (FTC) has issued guidelines requiring individualswho are paid to provide testimonials and endorsements on social networking sitesto reveal that they are being compensated (16 CFR 255.5). These guidelines couldaffect employers if their employees tout a product or service on a social network-ing site or blog without mentioning the employer/employee relationship.

The FTC has stated that when determining whether to initiate an enforcementaction, it will consider whether the employer had policies and practices relating toemployee participation in social media. In the past, the FTC has brought lawenforcement actions against companies whose failure to establish or maintainappropriate internal procedures resulted in consumer injury. However, it is unlikelyto bring an enforcement action against a company for the actions of a single“rogue” employee who violated an established company policy.

Practice tip: In addition to the tips above, employers should make sure that theirblogging and/or social networking policies contain provisions requiring employ-ees to reveal their employment status whenever they discuss company products or services using these media. Companies should also enforce these policies as amatter of good business practice and to ensure their credibility in case the FTCreviews a situation.

Best Practice: Look to Social Media for DisasterPreparedness UpdatesCertain federal departments and agencies are utilizing Twitter and Facebook toproactively reach out to U.S. citizens instead of passively waiting for people to visittheir websites.

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Ready.gov

One great resource for businesses and individual citizens for advance planning ofall types of emergencies is www.ready.gov, available through the U.S. Department of Homeland Security. The introductory page for businesses is www.ready.gov/business/index.html.

Several emergency situations are listed, along with detailed information regardingwhat businesses should do to prepare for each and what to do if they occur:among these are biological threats, blackouts, chemical threats, earthquakes, explo-sions, fires, floods, and hurricanes.

The introductory page for individuals is www.ready.gov/america/beinformed/index.html. This section provides details regarding creating a family emergencyplan, what to include in a basic emergency kit, and what to keep in a first-aid kit.

The first-aid kit information is valuable for everyday life, not just disasters. (Forexample, the site advises that you keep eye wash solution in a kit at your disposalin order to flush your eyes or to use it as a general decontaminant.)

For both individuals and businesses, there are many downloadable resources (inPDF format) that are available at no cost via the above links.

Ready.gov is now on Twitter, so you can sign up to receive Tweets (posts) in theform of emergency messages and tips to help prepare for emergencies. The TwitterID is “readydotgov” and you can sign up at no cost for this service at www.twitter.com. Just key “readydotgov” into the search window to access recent Tweets.

An example of one emergency Tweet from “readydotgov,” in May was an alert toreaders about a tornado watch in portions of south-central Kansas and central andwestern Oklahoma, providing a link for more information.

The CDC

The CDC website has a section on Emergency Preparedness and Response includ-ing public health emergencies, natural disasters, and severe weather at www.bt.cdc.gov. From the main page, click on the “Natural Disasters and Severe Weather”button to access information about specific disasters, such as hurricanes. Underthe hurricanes section, you can get information under “Prepare Before the Storm”about getting supplies, making a plan, and learning about hurricane recovery.

For example, one of the first things that the CDC recommends when an individualor a business is beginning to create a hurricane preparation plan is to learn aboutyour community’s emergency plans, warning signals, evacuation routes, and loca-tions of emergency shelters.

Even if you already have this information, it is a good idea to check it annually asmany communities change the locations of shelters and sometimes even evacua-tion routes due to changing population sizes and community needs.

The CDC also has plenty of information for your employees to begin planning for weather disasters that could affect their families’ health and well-being. TheCDC also shares emergency alert tweets on Twitter using the following Twitter ID,“CDCemergency.”

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FEMA

The Federal Emergency Management Agency, known as FEMA, is also a division ofthe U.S. Department of Homeland Security. FEMA is the agency that assists individu-als and state and local emergency management agencies when a major emer-gency occurs.

#5 Corporate Social Responsibility and the Green Movement

5 Reasons Why You Need a Green ProgramYou know that green programs are good for business, so why is it so hard to getupper management buy-in? Maybe it’s because they don’t fully understand all ofthe benefits of a green program. Here are some convincing reasons from a recentBLR® audio conference to help you pitch starting a green program at your company.

1. It’s easy!Whether it’s a factory, plant, or general office space, opportunities tobe green are in every workplace. You can easily train workers to save energy,recycle, and reduce waste at little cost to your company.

2. Your competitors probably have one. In a recent World Economic Forumsurvey, more than half of the companies said they produce a sustainabilityreport separate from their annual reports. If you want to stay competitive orgain an advantage, a green program will help you do that.

3. Your workers want it.Most employees are interested in how their company ispracticing corporate social responsibility. This is a great opportunity for you toshine in the eyes of your workers and be an employer of choice because mostemployees link positive environmental and social activities to brand reputation.

4. It’ll save money. It’s simple, cutting energy costs and waste will save yourcompany money. Simple tasks like printing on both sides of paper, turning offcomputers and lights during nonworking hours, and conducting water auditscan add up to a huge savings for your company.

5. It’ll keep you ahead of the regs. If you play in the global market you’ll haveto follow several European directives like Waste Electrical and ElectronicEquipment (WEEE), Restriction of Hazardous Substances (ROHS), and Regis-tration, Evaluation, and Authorization of Chemicals (REACH).

Going Green: Not Just Good Deeds … Good BusinessWith climate change and environmental pollution topping industry news, corpora-tions are finding that jumping on the sustainability train benefits their bottom line.

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But what is sustainability? The Brundtland Commission issued the most commonlyrecognized definition of sustainability in its 1987 report, Our Common Future:“meeting the needs of the present generation without compromising the ability offuture generations to meet their own needs.” Sustainability is the premier buzzword and one of the significant global issues facing business today.

And what exactly does that mean to you as a business owner? Sustainability is aproactive approach on the part of a company for managing natural resources andreducing environmental and social impacts that ensures viability and enhancesreputation with stakeholders (employees, customers, and suppliers), while notcompromising profitability.

Why Go Green?

The answer, as always, lies in the bottom line. Some of the benefits of having a sustainable business or going green include:

� Sets a positive example for stakeholders

� Boosts morale, leads to recruiting and retaining the best employees

� Builds customer loyalty

� Positions you as supplier of choice

� Sets your operations beyond compliance and reduces your risks

� Benefits the community and the environment

Of course, corporate responsibility and sustainable business practices can encour-age creativity and innovation.

Although every organization has a different vision of how sustainability fits intotheir business model, balancing business operations with social, economic, andenvironmental responsibilities may determine business performance in the future.As sustainability progresses from disjointed projects to a philosophy integrated atall business levels, companies are finding that sustainability is good for businessand has a positive impact on the bottom line.

Corporations are also discovering that demonstrating a commitment to sustainabil-ity offers a competitive advantage—nationally and globally—and it makes goodbusiness sense.

Baxter’s Reasons for Sustainability

Baxter International, a multinational healthcare products manufacturer, is a com-pany that has focused on sustainability for many years. At a NAEM Forum, ElaineSalewske, senior manager, Corporate Communications, offered these reasons whyBaxter International believes sustainability makes good business sense:

� It differentiates Baxter from other companies.

� It drives efficiency and creates a competitive advantage.

� It helps identify and manage risk.

� It enhances the company’s reputation among various stakeholder groups.

� It supports the company’s mission of sustaining lives.

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However, in order to fully take advantage of the benefits that a robust sustainabilityprogram will create, information must get to the appropriate stakeholders. As aresult, more and more companies are producing annual sustainability reports todocument their efforts as good corporate citizens and progress toward reducingtheir environmental footprint.

For example, Baxter International produced their first sustainability report in 1999and, according to Salewske, in addition to providing stakeholders with an overviewof company performance, the report allowed Baxter to establish a baseline anddemonstrate progress over time, which ultimately helps the company advance itsvarious sustainability programs.

Triple Bottom Line

In the “Age of Corporate Responsibility,” a commitment to sustainability implies acommitment to triple bottom line reporting: “People, Planet, Profit.” In practicalterms, this means expanding the traditional reporting framework to take intoaccount environmental and social performance in addition to financial perform-ance.

The phrase “triple bottom line” was coined by John Elkington in his 1998 bookCannibals with Forks: The Triple Bottom Line of 21st Century Business. It is a seriousand increasingly recognized concept, and companies are embracing it as a way todemonstrate commitment to sustainable business growth.

In the past, business decisions considered only profit—but now the triple bottomline recognizes that without happy, healthy people, a cleaner environment to sus-tain those people, and natural resources to offer supplies, a business is simplyunsustainable in the long run. Triple bottom line is an ongoing process as compa-nies continually adapt to the changing marketplace and the environment.

Triple bottom line legislation is under consideration in some U.S. states, includingMinnesota and Oregon. A number of corporations have advocated for sustainablecorporation laws that grant triple bottom line or sustainable businesses benefitssuch as tax breaks and low-priority routine inspections.

Challenges of ‘Going Green’

Moving toward sustainable business practices can present challenges in balancingeconomic interests against social and environmental concerns. The following con-cerns can easily be curbed if your focus remains on demonstrating commitment—especially from top management.

� Get employees on board and committed. If your employees see a real commit-ment and enthusiasm through communication, it will trickle down. Encourageinput so they can see themselves as valuable team players.

� Secure time and money. Sustainable practices need to be taken seriously bydevoting time to define objectives and set goals. You must also invest in steps tomeet your goals.

� Create a workable program to achieve measurable results. Communicateobjectives with stakeholders.

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� Maintain, improve, and adapt a green program with a forward-looking focus.You must take a closed-loop approach to obtain and sustain maximum bene-fits—this enables continuous improvement.

Getting Started

There is no one-size-fits-all solution to developing a green policy or sustainableworkplace. You must work with what you have and remember that your employeesare your best resource. Keep your focus on the triple bottom line.

1. Start small—target a few areas for improvement and commit to those.

2. Participate in business partnerships to share best practices.

3. Focus on ideas that require minimal capital investment.

4. Involve all employees—motivation is key to a successful green program.

Tip: Start with an energy-saving or conservation plan—it is easy to implement, easily measured, and may present immediate benefits.

Your sustainability program should be built on the “Plan, Do, Check, Act” approach,as described here, for continual improvement. This follows the ISO 14001 and ISO 9100 management systems model.

Step 1—Plan

First, create a “green team” and appoint a respected person with project manage-ment experience as coordinator of the team. Members of the team should comefrom all levels and areas of your company and must include one person from topmanagement.

Next, assess your current situation to determine your energy consumption, andidentify how and where energy and materials are being wasted or usage reduced.

� Distribute employee questionnaire—no more than 8 questions.

� Contact suppliers for exact costs.

� Consider variations in energy use.

� Conduct an energy audit.

Once you’ve assessed your current situation, you will know the direction youshould take, and you can set your goals.

Then, determine what systems to use to disseminate information with stakeholders(employees, customers, investors, etc.) —e-mail, training presentations, posters, orword of mouth.

Secure a budget for promotional materials and possible upgrades or for the pur-chase of energy-efficient technologies.

Create a timeframe to meet your goals. Be realistic about what is possible in agiven timeframe.

Finally, create an incentive program to encourage proactive involvement byemployees.

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Step 2—Do

After you define roles, responsibilities, and authority among members of yourgreen team, you can implement your new program. Some companies have a special launch event.

The program should be integrated into all areas of your business, including newemployee orientation. Develop training materials for your employees.

Be sure to communicate your progress internally and externally—and be transpar-ent about it.

Step 3—Check

To see the results of your program, you must monitor and measure progress—perform audits.

If you find areas that need improvement, identify corrective and preventiveactions.

Be sure to document everything so you are able to communicate results and find-ings to top management for review.

Step 4—Act

After upper management has reviewed your progress, consider any recommenda-tions and act on needed improvements.

In order to fully take advantage of the benefits that a robust sustainability programwill create, information must get to the appropriate stakeholders. A sustainabilityreport is a great way to communicate progress and demonstrate commitment toinvestors. And remember also to convey results to employees to keep motivationup on all levels.

Your Outlook

If you take corporate responsibility and sustainable business seriously—People,Planet, Profit—your company can improve its operational efficiency and reputa-tion among stakeholders, while reducing risk exposure and encouraging loyaltyand innovation.

Overall, employees, customers, regulators, and joint venture partners will see yourcompany as a good investment and a company of choice.

Best Practice: BLR’s Green Team Helps EmployeesBe Enviro ConsciousEmpowered staff with a special interest can start the ball rolling for an entireorganization. That’s exactly what happened with an environmental sustainabilityinitiative at Business & Legal Resources, Inc. (www.blr.com), headquartered in Old Saybrook, Connecticut. BLR, the publisher of this special report, is aprovider of employment, compensation, safety, and environmental compliancesolutions and has 150 employees.

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Ana Ellington, senior editor, and Amanda Czepiel, J.D., legal editor, report thatbecause they both have a strong interest in pollution prevention and sustainability,they set about together creating presentations for employees about reducing wasteand increasing environmental sustainability.

Their first presentation regarded how to achieve a paperless office. Theseemployee training presentations, the beginning of the sustainability efforts at BLR, were noticed by senior executives, Chief Operations Officer Brian Gurnhamand Managing Editor—Environmental Clare Condon, who immediately supportedEllington and Czepiel’s efforts and provided a small budget for the establishmentof a companywide green program.

The Green Team

The Green Team was formed with seven employees who meet every 2 weeks, withsmaller subsets of the team consisting of two or three employees to work on spe-cific tasks and projects, explains Czepiel.

The main focus of the Green Team is to increase awareness among staff membersand educate them so that employees glean knowledge that will help save the environment and money—at home as well as at work, explains Ellington. Ofcourse, the Green Team tries to make their efforts interesting and in many cases,fun as well.

One of the Team’s first initiatives was a “Shut It Off” campaign. “We had the chal-lenge of employees not understanding the importance of turning things [equip-ment and lights] off,” explains Ellington. “And also our company had purchased two new servers, so we had a significant increase in energy use due to that.”

Andrea Maturo, HR generalist and also a Green Team member, comments, “We hadto work on changing employees’ behaviors to stop and think about turning off themonitors, turning off the lights, and putting the computers on hibernate.”

Earth Day in April provided an opportunity for BLR employees to have lunchtogether out on the patio, with employees supplying their own brown bag lunchesand reusable mugs or glasses to enjoy lemonade or iced tea, made by the GreenTeam and presented in large thermoses instead of disposable containers, explainsEllington. Everything that was served, such as cookies and other dessert items, waspresented on reusable platters, she adds.

The Green Team was in attendance to answer questions about the Team’s activities,notes Czepiel.

A Green Fair

Maturo took the lead, along with Nancy McAnany, another member of the GreenTeam and BLR’s purchasing agent, in organizing BLR’s first Green Fair in May, heldin a format similar to BLR’s annual employee health fair.

The fair included outside vendors that sell energy conservation hybrid vehicles,energy-saving robotic lawnmowers and solar-powered lawnmowers (which zipped around the BLR grounds); two companies that focused on solar energy;Rideworks (www.rideworks.com), an agency that promotes public transportationfor commuting and carpooling; electric suppliers that offered discounted power

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rates; an organic lawn care service; and the local gas and electric companies,which offered energy conservation tips and home energy audits, Maturo explains.

BLR’s Green Team (which also includes employees Margaret Amore, Linda Costa,and Barbara Mathieu) also put together a booth to educate employees abouteverything that the Green Team had been doing.

An Environmental Audit

Another effort that the Green Team has worked on is an environmental office audit, says Ellington. “The idea was gleaned from the U.S. Department of Energy. We took the tips that they had and created two different models [a series of questions and a spreadsheet] and found that the spreadsheet was easier to use.”The Green Team conducted the organizationwide audit with input from differentdepartments, comments Ellington.

The information gathered creates a baseline so that progress can be tracked inobtaining Energy Star-rated equipment when equipment is replaced. In turn, theresults can be reported to employees and upper management, says Czepiel.

Leadership Support Counts

Ellington notes that senior management support and leadership becomes para-mount in order for staff to take an organization’s sustainability initiatives seriously.The Green Team also stresses that it’s important to be flexible and rework your pro-gramming and communication as necessary.

Ellington, Czepiel, and Maturo agree that keeping the initiatives in front of youremployees is also extremely important. BLR does that through its blogs posted atleast twice a week, e-mails to staff and periodic events and training sessions. Theblog, also available for the public to see, provides updates and resources for envi-ronmental sustainability efforts. To see it, visit www.blrgreenteam.com.

10 Tips to Go Green—And Save Some Green!“With growing pressure to go ‘green,’ companies that are prepared to demonstratethat they operate according to sustainable policies are proving to have a competi-tive edge, a better reputation, higher retention of good employees, and decreasedcosts, says BLR Senior Editor Ana Ellington, who heads the BLR Green Team.

1. Shut off any lights you are not using.

2. Use compact fluorescent lightbulbs. They use less than 25% of the electricity ofstandard bulbs and last 10 times longer.

3. Seal drafty doors, windows, and holes around plumbing fixtures to keep outwinter cold and summer heat.

4. Use the energy-savings setting on all appliances, particularly air conditionersand refrigerators, as well as on office machines such as copiers.

5. Unplug computers, monitors, modems, cable boxes, and televisions when notin use. Better yet, plug them into power strips so it’s one easy switch to turnthem all off and on.

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6. Unplug cell phone and PDA chargers when not in use. They use electricityeven when they aren’t charging!

7. Consider Energy Star®–qualified appliances, which use 10% to 50% less electricitythan standard models. A list of qualified products is available atwww.energystar.gov.

8. Use green power. “Green power” is defined as electricity that is generated fromenvironmentally preferable, renewable sources such as solar, wind, geothermal,biogas, biomass, and low-impact hydro.

9. Switch to paperless bank statements and bill paying to save millions of treesand billions of gallons of water—plus the cost of stamps.

10. Drive less! Walk, bike, or take public transportation.

#6 Increasing Investigations

Equal Employment Opportunity Commission(EEOC)Federal legislation has been enacted to expand the compliance efforts of federalagencies in 2010 and beyond. When asked, “Do you feel that the increasing investi-gations by the IRS, DOL, and Equal Employment Opportunity Commission (EEOC)will affect your company?” on BLR’s HR Concerns for 2011 survey, 34% respondedpositively. The EEOC has received an additional $23 million for its budget with anappropriation passed in December 2009, according to Reid Bowman, Esq., generalcounsel for ELT, Inc.

During a recent webinar, Bowman explained that EEOC’s case backlog was about70,000 and that over 200 new investigators will help to trim that backlog while pro-ducing stronger enforcement of regulations going forward.

“From the EEOC charges, we see that [some] employers are only addressing sexualharassment or workplace compliance and might be overlooking overall EEOCcompliance,” said Bowman. “Are employers talking about disability accommoda-tion or religious accommodation? Do compliance programs include age andnational origin discrimination? These are all topics that we’re seeing in terms ofEEOC charges.”

With the current infusion of dollars into its budget, EEOC “is more energized” withinvestigations and has “a renewed focus on systemic issues, such as increasedscrutiny on company background screening processes, for example, since theymay have an adverse impact on certain population groups,” commented Bowman.

Retaliation Claims

Margaret Hart Edwards, Esq., shareholder of Littler Mendelson (www.littler.com),added that retaliation claims are also in the forefront of EEOC investigators’ andjuries’ minds. “Juries really believe in retaliation and as a consequence, retaliation

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verdicts tend to run much larger [monetarily] than verdicts for ordinary discrimi-nation,” she says.

She shared the broad definition of retaliation that is followed by EEOC. “It is anytime you take action against someone because they’re engaged in a protectedactivity, which includes making an informal complaint internally or a formal complaint in a lawsuit, and it includes participating in any investigation. Theemployee doesn’t have to be right—just operating in good faith.” Edwards cited aSupreme Court decision in 2009 (Crawford v. Metropolitan Government of Nashville& Davidson County, Tennessee (No. 06-1595)).

“Retaliatory conduct is any conduct that would discourage a reasonable personfrom engaging in opposition to unlawful conduct,” commented Edwards. Sheexplained that what is prohibited conduct has been broadened through the Craw-ford case and through Burlington Northern & Santa Fe Railway Co. v. White decidedby the Supreme Court in 2006 (No. 05-259).

“Retaliation can reach beyond the workplace,” she explained. Some specific areasinclude “filing false criminal claims; filing a false report with an unemploymentcompensation office; and false references to damage job prospects.”

Another area that employers should be watching is sexual orientation and gender identification discrimination issues, noted Edwards. The Employment Non-Discrimination Act (ENDA), most recently passed by the House of Representativesin November 2007, without gender identity included, was introduced again in June 2009 in Congress with gender identity back in the bill (HR 3017). In September 2009, hearings were held before the House Education and Labor Committee, and in November 2009, the Senate Health, Education, Labor, and Pensions Committee held hearings on ENDA as well, explained Edwards.

Edwards cited a quote from the White House website (www.whitehouse.gov): “President Obama also continues to support the ENDA and believes that ourantidiscrimination employment laws should be expanded to include sexual orientation and gender identity.” She notes that Obama signed the Hate Crimes Prevention Act in October 2009, which “expanded existing federal hate crime lawto include crimes motivated by a victim’s actual or perceived gender, sexual orien-tation, gender identity, or disability and dropped the prerequisite that the victim beengaging in a federally protected activity.”

Edwards’ take on ENDA is this: Why wait until this federal legislation is passed(which she believes will occur this year or next year)—start preparing now. “ENDAwouldn’t create any exceptions to sexual harassment prohibition, but would makeany sexual harassment policies applicable to all, regardless of perceived sexual orientation or gender identity. It would also include special provisions regardingwhat to do with shared showers, restrooms, etc., and special provisions regardingdressing and grooming standards.”

Policy and Training Review

HR executives should do a thorough review of policies and practices if theyhaven’t within the past 12 months, in light of already enacted legislation and inpreparation for the legislation that is ahead, suggests Edwards. Once that is done,they should turn a critical eye toward their training and revamp it where needed in order to prevent potential claims.

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To view the entire webinar, which also highlights racial discrimination issues, fam-ily responsibility discrimination, and equal pay issues, go to www.elt-inc.com/news-and-events/webinars, scroll down to May 20, 2010, under the “Past Webinars” listing,and access the entire webinar by clicking on the link found there.

Wage and Hour InvestigationsWage and hour investigations are on the rise. DOL’s Wage and Hour Division(WHD) conducts investigations for a number of reasons, all having to do withenforcement of the laws and assuring an employer’s compliance.

WHD does not typically disclose the reason for an investigation. Many are initiatedby complaints. All complaints are confidential, so the name of the worker, thenature of the complaint, and whether a complaint exists may not be disclosed.

In addition to complaints, WHD selects certain types of businesses or industries for investigation. WHD often targets low-wage industries because of high rates ofviolations or egregious violations, the employment of vulnerable workers, or rapidchanges in an industry such as growth or decline.

Occasionally, a number of businesses in a specific geographic area are examined.The objective of targeted investigations is to improve compliance with the laws inthose businesses, industries, or localities. Regardless of the particular reason thatprompted the investigation, all investigations are conducted in accordance withestablished policies and procedures.

During an investigation, DOL representatives visit a business and gather data onwages, hours, and other employment conditions or practices in order to determinecompliance with the law. WHD does not require an investigator to previouslyannounce the scheduling of an investigation, although investigators will oftenadvise an employer before opening the investigation.

The investigator has sufficient latitude to initiate unannounced investigations inmany cases in order to directly observe normal business operations and developfactual information quickly. If violations are found, the employer may owe back pay,face penalties, and be advised by DOL to make changes in employment practicesin order to avoid future violations.

An investigation consists of the following steps:

� Visitation and inspection of the business under investigation.

� Examination of up to 3 years of records to determine which laws or exemp-tions apply. These records include those showing the employer’s annual dollarvolume of business transactions, involvement in interstate commerce, andwork on government contracts. Information from an employer’s records willnot be revealed to unauthorized persons.

� Examination of payroll and time records and taking notes or making transcrip-tions or photocopies essential to the investigation.

� Interviews with certain employees in private to verify the employer’s payrolland time records; to identify workers’ particular duties in sufficient detail todecide which exemptions apply, if any; and to confirm that minors are legallyemployed. Interviews are normally conducted on the employer’s premises. In

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some instances, present and former employees may be interviewed at theirhomes or by mail or telephone.

� When all the fact-finding steps have been completed, the investigator will ask to meet with the employer or a representative who has authority to reachdecisions and commit the employer to corrective actions if violations haveoccurred. The employer will be told whether violations have occurred, whatthey are, and how to correct them. If back wages are owed to employeesbecause of minimum wage or overtime violations, the investigator willrequest payment of back wages and may ask the employer to compute theamount due.

DOL looks for complete, accurate, and unambiguous pay records for everyemployee for each pay period from the past 3 years. As a result, it is imperative thatemployers strive to keep accurate, well-organized wage and hour records that canbe produced quickly.

#7 Employee FLSA Classifications

According to DOL’s 2010 Spring Regulatory Agenda, the Department plans toamend laws concerning recordkeeping for exempt employees and companion-ship services. BLR’s HR Concerns for 2011 survey revealed that these potentialrequirements are the second most pressing concern for HR professionals in 2011,after health care.

Amendments to the Fair Labor Standards Act(FLSA) Recordkeeping RegulationsDOL’s Wage and Hour Division (WHD) intends to update the FLSA recordkeepingrequirements to foster openness and transparency, to increase awareness amongworkers, and to encourage greater compliance by employers. DOL is considering aproposed rule requiring covered employers to notify workers of their rights underthe FLSA, and to provide information regarding hours worked and wage computa-tion.

Any employers that seek to exclude workers from the FLSA’s coverage will berequired to perform a classification analysis, disclose that analysis to the worker,and retain that analysis to give to WHD enforcement personnel who might requestit. The proposal will also address burdens of proof when employers fail to complywith records and notice requirements.

The current recordkeeping regulations require covered employers to keep specifiedpayroll records and other information but do not require that such information orother information regarding a worker’s employment or exemption status be dis-closed to the worker. This is an issue of transparency and is critical to workers’understanding of their legal rights and responsibilities.

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Employers covered by the FLSA are currently required to provide notice regardingthe Act and to keep records on wages, hours, and other items, as specified inrecordkeeping regulations established to ensure compliance with the various pro-visions of the Act.

Most of the information required to be kept is of the kind employers generallywould maintain in ordinary business practices. Required records generally includethe employee’s name, address, date of birth (if under 19 years of age), hoursworked per day and per week, regular rate of pay (nonovertime rate) when over-time is worked, amount of straight time earnings and overtime pay for each work-week, and deductions from or additions to pay.

The regulations also specify the records an employer must keep in order to con-firm that particular exemptions from some of the FLSA’s requirements may apply.Employers must keep additional information on certain employees who are home-based or work under uncommon pay arrangements or to whom lodging or otherfacilities are furnished or other special requirements apply.

Updating the recordkeeping requirements to promote transparency is expected toencourage greater levels of compliance by employers, to enhance awarenessamong workers of their status as employees or independent contractors andemployee rights and entitlements to minimum wage and overtime pay, and to facil-itate DOL enforcement.

Amendments to the FLSA Companionship Services RegulationsDOL intends to update the companionship services regulations in order to clarifywhen domestic service employees, who provide companionship services to theaged or infirm, are exempt from the minimum wage and overtime provisions of theFLSA. DOL intends to consider whether the scope of the companionship exemp-tion as currently defined in the regulations continues to be appropriate in light ofsubstantial changes in the homecare industry over the last 35 years.

DOL intends to consider whether the current exemption of companions workingfor a party other than the family or household using the companionship services isconsistent with the status of a companion in light of significant changes in thehomecare industry. DOL also intends to address the scope of training required torender a worker “trained personnel” excluded from the companionship exemption,and the amount of household work that may be performed by the worker withoutlosing the companionship exemption.

The FLSA generally requires employers to pay minimum wage and overtime unlessotherwise exempt. The FLSA was amended in 1974 to exempt companions for theaged and infirm from the minimum wage and overtime provisions of the Act andgranted the Secretary regulatory authority to define and delimit the terms of thisexemption.

The regulations governing this exemption have remained largely unchanged since they were promulgated in 1975. The Wage and Hour Division intends to consider amendments to the regulations in light of the changed nature of theemployment relationship for the majority of the companions to the aged andinfirm, the increased formalization of this sector of the labor market, and to reflectthe Secretary’s strategic objectives.

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#8 Retirement of the Baby Boomers

Labor Shortages Are Predicted: ‘Encore Careers’ May Be SolutionThe United States, along with the rest of the world, is still in the throes of a majorrecession, with an unemployment rate close to 10%. But according to a new whitepaper, by 2018, with an expected return to healthy economic growth and with nochange in current U.S. labor force participation rates or immigration rates, therewill likely be more jobs than people to fill them.

History shows that after a recovery from a recession, labor shortages typically follow, explains “After the Recovery: Help Needed,” written by Barry Bluestone and Mark Melnik of the Kitty and Michael Dukakis Center for Urban and RegionalPolicy at Northeastern University. The authors note that the best example is theearly 1940s (coming after the Great Depression). They expect a similar labor short-age after recovery from the current recession.

With population growth projected by the U.S. Census Bureau to be 47 millionbetween 2015 and 2030, the increase in the number of individuals 55 and olderwill be more than double the increase of those aged 20 to 54 (an additional 25 million versus an additional 12 million), according to the white paper.

If this shift to an ever-increasing older population follows the same retirement pat-tern as earlier generations, Baby Boomers will leave a large void in the labor force.

The authors’ research shows that there could be 14.9 million new nonfarm pay-roll jobs created between 2008 and 2018, with a grand total of 15.3 million newpositions, including self-employed workers, family members working in a familybusiness, and those in farming.

The authors estimate that there will be approximately 9.1 million additional work-ers to fill all positions.

The white paper predicts that the social sector, consisting of industries coveringhealth care and social assistance, educational services, nonprofit community andreligious organizations, the performing arts, museums, libraries, and government,will have more than 5.2 million new jobs, and another 1.7 million jobs will be avail-able in local, state, and federal government agencies, totaling 6.9 million newsocial sector jobs overall.

Trying Something New

The authors suggest that instead of retiring out of the workforce altogether, BabyBoomers should consider “encore careers.” According to the white paper, “Encorecareers combine personal fulfillment, social impact, and continued income,enabling people to put their passion to work for the greater good.”

Specific job titles listed in the executive summary of the white paper that theauthors believe would particularly benefit from the presence of Baby Boomersinclude: primary, secondary, and special education teachers; childcare workers and

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teacher assistants; registered nurses, home health aides, personal and homecareaides, nursing aides, orderlies and attendants, medical assistants, licensed practicaland licensed vocational nurses; medical and health service managers; businessoperations specialists; general and operations managers; receptionists and infor-mation clerks; clergy; and social and human services assistants.

The opinions and analysis shared in the white paper are based on forecasts ofpopulation growth from the Census Bureau, official forecasts of job growth andlabor force participation from the U.S. Bureau of Labor Statistics, and estimates ofthe number of jobs in specific occupations based on the Labor Market AssessmentTool developed jointly by the Dukakis Center and the Research Division of theBoston Redevelopment Authority.

To access and download the entire white paper at no cost, visit www.encore.org/research.

U.S. Workers Toil on Through Their Twilight YearsMany Americans have altered their retirement plans, according to a recent studyby the Employee Benefits Research Institute (EBRI).

For example, in 1993, 29.4% of adults aged 55 or older were in the workforce, and in2008, this figure rose to 39.4%. In the group of adults aged 65 to 69, in 1985, 18.4%were working, and in 2006, this figure increased to 30.7%, according to EBRI.

“Workers increasingly are facing more responsibility in paying for their retirementexpenses,” EBRI suggests in its “Employment Status of Workers Ages 55 or Older,1987-2008” study.

“Private-sector workers who have access to an employment-based retirement planmost commonly have a defined contribution plan (typically a 401(k) plan,financed at least partially with workers’ own contributions), and retiree healthinsurance is becoming increasingly scarce.

“Consequently, workers today have greater incentives to stay in the workforce, suchas the ability (and in some cases, the need) to continue to accumulate assets indefined contribution plans and to have access to employment-based health insur-ance coverage, instead of having to tap into their savings to pay for their expenses.”

Viewing older workers by educational level, the EBRI study found that, in 2008,workers over 55 who had attained higher educations were more likely to work full-time, with those possessing a college degree being the most likely (at 68.2%).

“The employment status of workers age 55 or older has significantly moved towardfull-time, full-year work—with a corresponding decline in part-time, part-yearwork—over the 21-year period from 1987 to 2008,” the report explains.

“This trend was found across all groups age 55 or older, all race/ethnicity cate-gories, and all educational levels. Younger near-elderly/elderly workers were farmore likely to be working full-time, full-year, but older workers had larger percent-age-point increases in full-time, full-year work from 1987 to 2008.”

The study adds, “The well-documented aging of the labor force that is now under-way will most likely continue, if not accelerate, as the first members of the post-World War II Baby Boom generation have now surpassed age 60.”

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As the international economy continues to move toward recovery, this trend ofolder workers staying in the workforce will be helpful to employers requiring theexpertise and skill sets of seasoned professionals in order to rebuild business prof-its and expand products and services. To access the complete 16-page report, visithttp://tinyurl.com/ya4gwin.

12 Points to Consider with Retirement Plan OptionsMany employers that provide retirement benefits to their employees do not havethe resources or time to thoroughly research retirement plan alternatives andoptions, according to Jeff Acheson, QPFC. However, he cautions, this process isimportant because “not all retirement plans are created equal.”

Acheson, partner and managing director of Retirement Plan Solutions for Schnei-der Downs Wealth Management Advisors, LP (www.sdwealthmanagement.com),offers 12 key points to help create better retirement outcomes for plan sponsorsand plan participants:

1. Position retirement plans as part of the compensation package. Plan sponsors“must communicate to participants that their retirement plan is a valuable partof their overall compensation,” Acheson says.

2. Keep it simple. Look for ways to incrementally improve long-term results withbetter performing funds, to create better preset portfolio options, and to reduceoverall investment and plan management costs.

3. Map out projected income. Just as the Social Security Administration issuesannual projections to individuals about their future benefits, Acheson sayseach plan participant should receive a similar computerized analysis explain-ing their projected income from all sources in retirement.

4. Provide auto enrollment. A provision in the Pension Protection Act of 2006established the regulatory framework for plan sponsors to automatically enrollparticipants in retirement plans—to help overcome participant apathy.

5. Communicate the importance of saving for retirement. The best way to deliverthat message is for employers to make a “reasonable and consistent contribu-tion every year” to employees’ retirement plans.

6. Hire a professional. Engaging a fiduciary service to manage retirement planswill help ensure that fiduciary responsibilities mandated under the EmployeeRetirement Income Security Act, known as ERISA, are met and associated plansponsor liabilities are minimized.

7. Look for an open architecture investment platform. “When evaluating theinvestment funds available on a particular investment platform, look to a custodian offering open architecture” (i.e., no imposed restrictions), he says.“Restrictions usually are a result of revenue-sharing agreements between afund and the platform provider or the platform provider is pushing their ownproprietary options.”

8. Consider using a mix of actively and passively managed funds. “A lot of planproviders strictly make available actively managed funds because there aremore fees involved,” Acheson says. Actively managed funds outperform pas-sively managed funds only about 30% of the time—over time—but the fees

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charged for actively managed funds are significantly higher, and many plansponsors are questioning the value received for the fees paid.

9. Educate participants. Participants need to understand the importance of turn-ing to a professional fiduciary to manage retirement plan investments.

10. Recommend use of an outside investment advisor. When it comes to moneymanagement, “most people wing it,” says Acheson. Consequently, most peopleare better served by hiring an outside advisor to “professionally design aninvestment portfolio that automatically adjusts itself over time” and that pro-vides the “best opportunity for long-term performance.”

11. Provide older participants access to a retirement planning advisor. “Far toomany participants do a good job accumulating money and then make poordecisions immediately following retirement and undo years of hard work andfinancial prudence,” he says.

12. Look at fee disclosure and transparency issues. Noting that fees vary widely byplan provider, Acheson recommends that plan sponsors “demand” that theircurrent provider disclose all of the fees being paid, using DOL’s 401(k) PlanDisclosure Form (www.dol.gov/ebsa/pdf/401kfefm.pdf). Then, the plan sponsorcan solicit requests for proposals from other plan providers (in the same for-mat) and compare the fees.

#9 Government Contracts

New Section 503 Disability RegulationsUnder Section 503 of the Federal Rehabilitation Act of 1973, an employer with agovernment contract or subcontract amounting to $10,000 or more must take affir-mative action to employ mentally or physically qualified disabled individuals. Thisrequirement is part of OFCCP regulations that implement the Rehabilitation Act.

Americans with Disabilities Act Amendments Act (ADAAA), which took effect January 1, 2009, expanded the definitions of who is considered an individual witha disability. The amendments substantially broaden the definition of “disability”under the Americans with Disabilities Act (ADA), allowing more individuals toclaim coverage under the law. The ADAAA requires government contractors to lookmore closely at applicants and employees to determine whether they are consid-ered to be disabled.

Covered employers are required to take all necessary actions to ensure that noone attempts to intimidate or discriminate against an individual for filing a com-plaint or participating in a proceeding under Section 503.

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Congressional Testimony Outlines OFCCP’s Priorities

In a recent statement to Congress, Les Jin, OFCCP’s deputy director, revealed the

agency’s top priorities on an agenda filled with enforcement activity. Speaking to

the House Subcommittee on Economic Opportunity, part of the Committee on

Veterans Affairs, this past fall, Jin stressed three of OFCCP’s top priorities and the

means by which OFCCP intends to serve them. According to Jin, OFCCP’s three

priorities are:

◆ Strengthening enforcement;

◆ Implementing a robust regulatory agenda; and

◆ Identifying more individual complaints through greater outreach

Priority 1: Strengthening Enforcement

In 2009, OFCCP investigated a total of 3,917 establishments. According to Jin,

OFCCP has 3,975 cases for evaluation this year, for which OFCCP has performed

1,142 desk audits and conducted 683 on-site visits. Jin also reported that OFCCP

has completed more than 450 evaluations of contractors who received federal

funds through the American Recovery and Reinvestment Act of 2009.

In order to strengthen enforcement, OFCCP has instituted a new protocol that

requires OFCCP compliance officers to go on-site and verify how contractors are

treating protected veterans and people with disabilities, rather than simply accept-

ing contractors’ self-reporting. In FY 2010, roughly 30% of all on-site reviews con-

ducted by OFCCP found recruitment violations pertaining to protected veterans.

As a result, said Jin, more on-site reviews are necessary to improve OFCCP’s verifi-

cation efforts and increase contractor accountability.

In addition to on-site reviews, OFCCP has, by its own admission, become more

aggressive in the way it resolves cases. For example, says Jin, in FY 2010 OFCCP

referred more than 34 cases to the Solicitor of Labor for litigation, more than dou-

bling the amount referred in FY 2009 and tripling the number from FY 2008. Also,

for the “worst offenders” OFCCP will impose contract-related sanctions against con-

tractors or subcontractors for failure to comply with the laws enforced by OFCCP

and their implementing regulations.

Priority 2: Implementing the Regulatory Agenda

In order to address specific questions regarding treatment of veterans, Jin stressed

OFCCP’s recent regulatory activities pertaining to The Vietnam Era Veterans Reha-

bilitation and Adjustment Act (VEVRAA) and Section 503 of the Rehabilitation Act.

Specifically, Jin cited OFCCP’s “ambitious process of making major regulatory revi-

sions to our enforcement program that will allow OFCCP, among other things, to

help veterans get good jobs.” Chief among these regulatory revisions are OFCCP’s

recent proposed changes to VEVRAA and Section 503 of the Rehabilitation Act.

OFCCP announced a proposal to revise VEVRAA’s regulations in DOL’s Spring

2010 Regulatory Agenda. The Notice of Proposed Rulemaking, which is scheduled

to be published next winter, would require federal contractors and subcontractors

to strengthen affirmative action programs and measure the effectiveness of their

equal employment opportunity efforts with quantitative dates, according to Jin.

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Also, OFCCP recently issued an Advanced Notice of Proposed Rulemaking(ANPRM), in which the agency asked for public input on 18 key questions aimedat strengthening the regulations implementing Section 503 of the Rehabilitation Act of 1973 in order to help people with disabilities obtain employment. A total of127 comments were submitted to the OFCCP, focusing on the objective to set place-ment goals and quantitative analysis versus the quality of data available and theburden this process can create for federal contractors.

As a result of the input received, OFCCP is in the process of crafting proposed reg-ulatory changes to Section 503 that “better address disparities that people withdisabilities— including some veterans with disabilities—face in the workplace,”said Jin.

Priority 3: Identifying Individual Complaints Through Outreach

According to Jin’s testimony, OFCCP believes that in recent years, the agency hasnot prioritized individual complaints, instead, focusing on systemic discriminationacross businesses and whole industries. As a result, the agency pursued fewercases of discrimination against protected veterans and persons with disabilities,which rarely raise systemic issues. However, cases involving veterans and personswith disabilities will now receive priority.

In order to give these claims priority, a new team at OFCCP dedicated to focusingon community-based engagement as part of “communication and outreach strate-gies” has formed. OFCCP is utilizing social media, partnerships with civil rightsadvocates and other grass roots efforts to educate veterans about their rights in thejob market.

#10 Workplace Wellness

In this age of skyrocketing healthcare costs, it isn’t surprising that wellness is atopic of discussion at home, in our schools, at all levels of government, and in theworkplace. There is evidence that an effective workplace wellness program willresult in a healthy return—both in terms of employee productivity and reducedhealthcare costs.

However, in order to realize this return, employers must make sure wellness pro-grams are well-focused and well-executed. In other words, wellness programs musttarget the health concerns of employees and their families. In addition, the com-pany must communicate with employees about the program and its benefits tomake sure it is being used effectively.

Workplace wellness program offerings may vary, from simple things such as dis-counts in membership fees at health clubs and in weight loss programs to specifichelp with managing chronic diseases such as high blood pressure and diabetes. Aswith any workplace program, employers must consider federal and state lawswhen setting up a workplace wellness program.

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What Is Wellness? The concept of wellness encompasses every aspect of our lives. In 1979, Dr. Bill Hettler, cofounder of the National Wellness Institute (http://www.nationalwellness.org), developed a model called The Six Dimensions of Wellness, which is generallyaccepted by the wellness community. The six dimensions are:

� Physical—bodily health through exercise, nutrition, and abstaining fromharmful activities, such as smoking

� Emotional—emotional health through learning to recognize, express, andcontrol feelings and moods

� Intellectual—mental health through developing creativity, learning ability, andproblem-solving skills

� Occupational—job satisfaction through learning individual aptitudes andskills and finding meaning in work

� Social—community connections through learning the part we play in ourinterconnected world

� Spiritual—larger life questions through learning to choose and live by a set ofvalues that give meaning to our lives

Legal Issues Related to Workplace Wellness ProgramsEmployers have a great deal of flexibility in designing wellness programs. However,it is a good idea to review any program with an attorney, and employers shouldwork closely with insurance providers if the wellness program will offer financialincentives or benefits through group health plans. There are a number of laws tobe aware of when developing and implementing these programs.

Americans with Disabilities Act (ADA)

The ADA requires employers to offer a reasonable accommodation to anemployee with a known disability, and it prohibits employers from making medicalinquiries or requiring medical examinations (unless job related and consistentwith business necessity). It is also unlawful under the ADA to take any adverseemployment action based on an individual’s actual or perceived disability.

The EEOC has offered employers some guidance on the ADA’s restrictions on med-ical inquiries and examinations. Under the guidelines, an employer may conductmedical examinations and activities that are part of a voluntary wellness andhealth screening program.

Therefore, offering employees the opportunity to voluntarily participate in healthscreening programs for high blood pressure and cholesterol monitoring is notlikely to violate the ADA, as long as there is no penalty (economic or otherwise)for not participating. Employers must treat any information acquired as a confiden-tial medical record.

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Health Insurance Portability and Accountability Act (HIPAA)

In late 2006, DOL’s Employee Benefits Security Administration (EBSA), the InternalRevenue Service, and the Department of Health and Human Services publishedfinal rules that provide guidance in complying with the nondiscrimination provi-sions of the Health Insurance Portability and Accountability Act (HIPAA). The rulesalso provide guidance on the implementation of wellness programs.

HIPAA nondiscrimination provisions generally prohibit group health plans fromcharging similarly situated individuals different premiums or contributions orimposing different deductible, copayment, or other cost-sharing requirementsbased on a health factor.

Health factors include: health status, medical condition (including both physicaland mental illnesses), claims experience, receipt of health care, medical history,genetic information, evidence of insurability (including conditions arising out ofacts of domestic violence), and disability. However, there is an exception thatallows plans to offer wellness programs if they meet certain criteria.

Under the regulations, examples of wellness programs that comply with HIPAA’snondiscrimination requirements without having to satisfy any additional standards(assuming participation in the program is made available to all similarly situatedindividuals) include:

� A program that reimburses all or part of the cost for memberships in a fitnesscenter

� A diagnostic testing program that provides a reward for participation and doesnot base any part of the reward on outcomes

� A program that encourages preventive care through the waiver of the copay-ment or deductible requirement under a group health plan for the costs of, forexample, prenatal care or well-baby visits

� A program that reimburses employees for the costs of smoking cessation pro-grams without regard to whether the employee quits smoking

� A program that provides a reward to employees for attending a monthly healtheducation seminar

A wellness program that conditions a reward on an individual satisfying a standardrelated to a health factor must meet these five requirements:

� The total reward must be limited. Generally, it must not exceed 20% of the costof employee-only coverage under the plan.

� The program must be reasonably designed to promote health and prevent disease.

� The program must give individuals eligible to participate the opportunity toqualify for the reward at least once per year.

� The reward must be available to all similarly situated individuals. The pro-gram must allow a reasonable alternative standard (or waiver of the initialstandard) for obtaining the reward to any individual for whom satisfying theinitial standard is medically inadvisable or unreasonably difficult due to amedical condition.

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� The plan must disclose in all materials describing the terms of the program theavailability of a reasonable alternative standard (or the possibility of a waiverof the initial standard).

DOL issued frequently asked questions on HIPAA’s nondiscrimination require-ments to assist the employee benefits community in complying with the new rules. The information is available on the DOL website at http://www.dol.gov/ebsa/faqs/faq_hipaa_ND.html.

DOL has also published a Wellness Program Checklist to help employers deter-mine if their wellness initiatives are required to comply with HIPAA regulations.Once an employer has established that its program is subject to HIPAA, the checklist helps determine if the program is in compliance. The checklist is part ofField Assistance Bulletin No. 2008-02, which is available on DOL’s website athttp://www.dol.gov/ebsa/pdf/fab2008-2.pdf.

National Labor Relations Act (NLRA)

Employers who have negotiated a collective bargaining agreement with a unionare required by the National Labor Relations Act to bargain over “wages, hours, andother terms and conditions of employment.” Therefore, a union may claim that awellness program is a term or condition of employment that mandates bargaining.Employers should also check the governing collective bargaining agreement tosee if a wellness program falls under a subject they have agreed to negotiate. Forexample, a bargaining agreement may mandate negotiation over the amount ofemployee-paid insurance premiums, but not health insurance or other employeeinsurance benefits.

Internal Revenue Code

Depending on the incentives and benefits included in an employer’s wellness pro-gram, there may be tax consequences for the employer and the employee. Forexample, some employee incentives may constitute taxable income for employees.Generally, the value of an incentive is includible in the employee’s gross income(e.g., gift cards, memberships to off-site exercise facilities). However, there are someexceptions, including:

� Free or subsidized access to a gym or athletic center that is operated by theemployer and located on the employer’s premises

� Discount on employee contribution required to participate in employer-sponsored health plan

� Contributions to an employee’s flexible spending account

In addition, a discount to an employee’s healthcare insurance offered as an incen-tive to employees who participate in a wellness program would probably not beconsidered taxable income for employees. Employers are well advised to obtainguidance from a tax professional as tax laws are complex and regulations canchange frequently.

State Laws that Protect Off-Duty Conduct

Several states have laws protecting the off-duty conduct of employees. Some states,including Connecticut, Indiana, Kentucky, Louisiana, Maine, New Mexico, Nevada,New York, North Dakota, Oklahoma, Rhode Island, and the District of Columbia,

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have “Smokers’ Rights” laws that protect individuals from discrimination on thebasis of the lawful use of tobacco products outside of the workplace. Other states,such as California, have broader coverage that includes any lawful activity occur-ring away from the employer’s premises during nonworking hours.

When designing a wellness program, employers should review state laws prohibit-ing employment discrimination to be sure the program complies with staterequirements. Once a program is in place, employers should take steps to ensurethat employment decisions are not based on conduct that is protected by law.

It is necessary to keep in mind that ERISA may preempt state law when a wellnessprogram is part of an employee benefit plan. However, ERISA will neither preemptstate laws that have only a “tenuous, remote or peripheral connection” to employeebenefit plans, nor will it preempt state insurance laws.

If a wellness program is challenged based on a state law that protects off-duty con-duct, ERISA’s preemption clause may come into play—but it would depend onwhether the program is part of an employee benefit plan within the meaning ofERISA’s preemption clause.

A federal court decision demonstrates the difficulties that arise when a mandatorywellness program conflicts with an employee’s off-duty conduct (Rodrigues v. TheScotts Company LLC, No. 07-10104 (D. Mass. 2008)). In this case, the employer insti-tuted a mandatory wellness program that included a tobacco-free policy prohibit-ing “smoking of tobacco products by its employees at any time and at any place,whether or not in the workplace or during work hours.”

The applicable state law does not have a provision prohibiting discriminationagainst employees who use tobacco products. The employer used random testingof employees to enforce its policy. When it subsequently discharged an employeewho tested positive for nicotine, the employee filed a lawsuit based on variousclaims.

Ultimately, the court ruled the former employee could pursue his lawsuit based onhis claims of invasion of privacy and a violation of ERISA, but not on his claim ofwrongful termination or a violation of the state civil rights law.

Note: Because state laws and regulations vary widely, employers should have theirwellness programs reviewed by an attorney familiar with applicable state laws, par-ticularly if employee participation in a wellness program is mandatory.

Setting Up a Workplace Wellness ProgramThere are a number of steps employers should take when setting up a wellnessprogram to make sure it will be effective. These include obtaining support fromsenior management, assessing the current level of wellness in the workplace, creat-ing a customized operating plan, launching the wellness plan, and communicatingwith and educating employees about the plan. Finally, employers should continu-ally measure and assess the effectiveness of the workplace wellness program,adjusting as necessary when needs are identified.

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Obtain Support from Senior Management

The critical first step in starting and running an effective wellness program is getting senior management on board. In fact, save for a few notable grassrootsexceptions, most workplace wellness programs do not result in a positive return on investment (ROI) without the committed support of senior management.

According to management guru Peter Drucker, “major change initiatives must beactively led by senior management.” Other prominent organizations ranging fromthe U.S. Department of Health and Human Services’ Substance Abuse and MentalHealth Services Administration (SAMHSA) to the Society for Human ResourceManagement (SHRM) to the Wellness Councils of America (WELCOA) agree: senior-level support is imperative to get maximum employee acceptance of andparticipation in workplace wellness programs.

Senior executives are the people responsible for setting priorities and allocatingresources. To secure the financial resources necessary to deliver effective program-ming or to have effective access to the rest of the organization, the senior staff mustbe committed to the effort.

Moreover, senior executives can provide additional assistance to link health pro-motion objectives to business outcomes—thus, positioning health promotion as anintegral part of the organization. Last, but certainly not least, senior executives cansignificantly increase the likelihood that an initiative will be ultimately successfulby crafting and implementing supportive corporate policy.

Make the Business Case for a Wellness Program

Profit, or at least sound financial practice, is the bottom line of every business, andsenior management absolutely needs to see the financial benefits of incorporatingwellness into the workplace culture. Senior officers need to be convinced thatwellness is not merely a “nice” thing to do for employees’ health but that it’s also a“necessary” thing to do for the bottom line financial health of the business.

Management expects bad news when it comes time to renew health insurancecontracts. Making the specific case requires gathering crucial numbers such as the number and cost of workers’ compensation claims and disability claims, andthe cost of lost productivity due to sick days and light duty. Added to the risingincrease of health insurance, the financial case should be easy to make. Data isalso available about the cost of obesity, sedentary lifestyles, smoking, and stressboth in terms of healthcare costs and lost time at work.

This bad news should next be contrasted with the good news about how the financial side of an effective workplace wellness program works. A helpful step ingathering information is to research other workplaces in the industry or the localcommunity to find wellness success stories close to home that will give seniormanagement similar scenarios to compare.

More good news is that it doesn’t take much of an improvement (less than a 1%reduction in risk factors) to make wellness initiatives pay off. In general, employerscan earn back the cost of programs over the course of 5 years if they can reducerisk factors by less than 0.2%, according to Dr. Ron Goetzel of Cornell University.

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Finally, wellness should be treated as an integral part of the workplace organiza-tional culture by referring to it with the same terminology and respect that is usedfor other workplace departments.

Assess the Current Level of Wellness in the Workplace

Assessment is required for any program to be successful. That’s why businesses domarket research, politicians take polls, and producers show films to test audiences.Everyone who wants his or her project to succeed needs to research the market, thebuyer, and the competition. “Know your audience” is the primary piece of advice forspeakers, writers, politicians, businesspeople, anyone who has a message to present.

In the context of setting up a workplace wellness program, this means understand-ing the needs of the company and those of the employees and their families. For example:

� What wellness concerns are unique to the industry (e.g., ergonomic issues forprocessing plants)?

� What wellness concerns are unique to the workplace (e.g., areas with exces-sive noise or wet floors)?

� What wellness initiatives would most benefit employees (e.g., weight loss programs)?

� What wellness initiatives do employees want (e.g., gym membership discounts)?

� What potential barriers to success does the wellness program face (e.g., lack ofparticipation, short-term commitments, or high employee turnover)?

Create a Customized Operating Plan

For a wellness program—as well as any other workplace project—to be effective,all facets must be defined. There must be a detailed operating plan that providesspecific definitions of what “works” and doesn’t work for the workplace. The follow-ing items should be an integral part of the wellness program operating plan:

� Mission statement

� Objectives

� Specific initiatives

� Implementation timeline

� Evaluation plan

� Budget

In addition, it is important to consider and develop an organizational structure tosupport the initiatives, such as a wellness team and committees to run individualinitiatives.

Mission statement. An effective wellness mission statement is broad enough toinclude the many aspects of wellness (i.e., including as many of the six dimensionsof wellness discussed above as possible), and detailed enough to mention the spe-cific wellness initiatives the program offers. Leave room for flexibility to add anddelete initiatives as the program offerings change. The wellness mission shouldalso support the company’s mission statement and goals.

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Objectives. Based on demographic and medical research, list the problem areas

in the workforce. Once these are identified, set specific objectives in each health

area using the so-called SMART system. SMART objectives are:

◆ Specific. Goals are clearly defined.

◆ Measurable. Goals are quantifiable with specific numbers.

◆ Achievable (attainable or actionable). Goals are possible for employees to

meet with the resources provided.

◆ Relevant (realistic or results-oriented). Goals are appropriate to employees

and the organization’s mission statement.

◆ Timed (time-framed or time-specific). Goals are to be achieved within a

set time.

Goal-setting, both for the wellness program and for employees, is crucial. In order

to change employee behavior, employees need SMART goals that inspire and

motivate. When employees get specific targets to aim for that are challenging yet

achievable, they are more likely to rise to the occasion. And when the wellness

program has specific, targeted goals, results can be measured against those goals

to demonstrate the effectiveness of the programs.

Identifying specific initiatives for achieving goals. Continue the process of

integrating wellness into the workplace culture by including the wellness initiatives

already in place, such as health insurance, dental insurance, employee assistance

program (EAP), or health savings account (HSA).

Perhaps some of the objectives will involve modifying existing plans. Describe the

initiatives that will be used to achieve objectives. In choosing initiatives, decide

whether external or internal resources will be used. For those programs kept in-

house, create a leadership team and assign team members. HR should take respon-

sibility for the company health policies (insurance, benefits, leave, disability, and

vacation, as well as ensuring that all federal and state regulations are followed).

The HR manager should also act as a point of contact for any other portions of

the wellness program (for example, a Weight Watchers® program, exercise pro-

gram, or smoking cessation program), but it will be more effective for non-HR

personnel to work as team leaders, mentors, and coaches on the wellness team.

Having employees involved on wellness teams makes the team less intimidating

to other employees and will encourage more participation.

Whether using in-house or outside resources, choose the initiatives that will best

meet the organization’s goals. If the workforce is a typical American workforce,

weight loss programs and/or get active programs may be a good starting point.

Regarding weight loss choices, there are several commercial weight loss programs

available that include meetings and support groups. Consider partnering with one

of these groups that has a local chapter, such as Weight Watchers. Meetings can be

held in the workplace or off-site to include family members as well.

For get active programs, consider partnering with the local YMCA. The “YMCA

Activate America” program can help employees and their dependents get involved

in an active lifestyle (go to http://www.ymca.net/activateamerica). In addition,

many employers start a formal walking program by mapping out routes in and

around the worksite, issuing pedometers, and counting steps.

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At some point in the workplace wellness journey, a health fair at the worksite maybe a good option. Some workplaces may choose to kick off their wellness programwith a health fair; others may want to ease into their wellness program and helpbuild momentum by promoting an upcoming health fair at which more wellnessinitiatives will be revealed, and/or prizes awarded.

Develop a communication plan. The wellness operating plan also needs todetail how the wellness message will be communicated. There are several options,including but certainly not limited to:

� Including a brief wellness tip in workplace meetings

� Sending a weekly wellness e-mail tip

� Including a wellness section in workplace newsletters

� Hanging wellness posters on cafeteria or break room bulletin boards

� Distributing a wellness newsletter monthly or quarterly

� Conducting monthly or quarterly lunch time wellness talks

� Regularly communicating wellness success stories

Develop the implementation timeline. Create a specific timeline for the well-ness program. Outline when each step of each initiative will begin and end. Giveample time for each step to be completed.

Plan for the ongoing evaluation of wellness initiatives. Effective wellnessoperating plans need to have a clear evaluation plan. This is the only way to knowdefinitively whether the initiatives have “worked.” In the evaluation plan, describehow each initiative will be measured. Design pre- and post-assessment forms forthe overall wellness program and for individual initiatives.

Develop a budget for the wellness program. Even if the company does notintend on investing a significant amount of money initially on the wellness pro-gram, an itemized budget is still important. Follow the process and format forbudgeting used by other departments in the company. This will continue theprocess of integrating wellness into the organizational structure and give it thesame level of importance as other departments.

When developing a budget, first consider the scope of the program. How manyemployees will be involved? If it is a program where employees have to elect not to participate, 80% of employees are likely to participate. How many depend-ents and retirees will be involved? Will there be paid guest speakers? Will the company plan on buying equipment, such as pedometers? What kind of incentiveswill be offered?

This is a good time to consider what kinds of incentives the company would con-sider offering for participation in the wellness program. Financial incentives can be great motivators. According to some studies, the most effective monetary valuesrun from $300 to $1,000. If this expense is too great, consider smaller incentives,such as discounts to sports or health food stores, gym memberships, or extra vacation time.

Gather figures for outside speakers, equipment, incentives, and other expenses.With these factors in mind, estimate what the program will cost. Next, consider who

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will pay for the wellness program. Will the employer pay all expenses? Will employ-ees pay for the initiatives they participate in? Will they share the expenses?

Launch and Communicate the Wellness Plan

To help make the wellness program as effective as possible, make sure the programlaunch includes these three elements:

Get senior management involved. As noted above, a wellness program will suc-ceed only if senior management is part of the process and supports the initiative.Have senior management speak at a kick-off event, or perhaps even challengeemployees to a contest to see if they can reach certain goals before senior man-agers meet those goals.

Play to the audience. Remember that effective wellness programs are aimed atthe vast middle ground of the employee population, those employees who are generally healthy but who have one or two problem areas and are considered amedium risk. For most workplaces, that encompasses approximately 80% of theworkforce. Also be sure to keep in mind and address the health needs of employ-ees’ family members and dependents.

Make it fun. Generate excitement for wellness by making the launch activitiesenjoyable. Some workplaces choose to launch their wellness programs with ahealth fair. If a health fair is the kick-off activity, make sure it is well-organized sothat it will run smoothly.

Once the program is launched, it is important to continuously communicate withemployees. The real benefit to the company of a wellness program is the long-termreduction in healthcare costs and healthier, more productive employees. Therefore,maintain an ongoing effort to communicate, educate, motivate, and empoweremployees with the goal of changing behavior. The wellness program, initiatives,and goals should be a regular part of employee communication.

Measure, Assess, and Adjust

Measuring the results of the overall wellness program is vital to assess and adjustthe program based on what works best with a particular group at a particular location. Execute this step in the same way as employee performance reviews,annual budgeting, or other formal, annual, continual improvement efforts. Doing so provides yet another way to ensure the wellness program is integrated into theorganizational culture. In other words, think of wellness performance reviews as an(at least) annual time to report the progress and problems in the wellness program,to make adjustments, and to set new goals.

Assessments should not measure only dollars and cents. A financial return oninvestment (ROI) is critical, and it is important to have positive numbers to reportto senior management to continue or even enlarge the scope of your wellness program and perhaps receive a bigger budget. But it is also important to measurehealth changes and employee satisfaction.

Employee satisfaction. Because the success of the workplace wellness programdepends on employee participation, this is an important measurement. Some keyindicators include employee morale, absenteeism, and retention and turnover. Anannual employee survey is a good tool for gathering information that will help

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assess employee satisfaction before and after the implementation of a wellnessprogram. In addition, statistics on who is participating in the program and to whatextent they are participating will provide important data for measuring employeesatisfaction.

Employee wellness. The goal of the wellness program is to help employees staywell. When a program is developed, first assess the current level of wellness. Basedon the health risks identified during the assessment, the wellness program willfocus on specific areas and goals, and established timelines for achieving goals.

Because the program targets key health concerns, measuring related changes inemployee health is important. Measurements might include changes in BMI (bodymass index), blood pressure, cholesterol level, blood sugar, smoking habits, and prescription usage. In addition, it is important to measure individual activity level.

ROI. A wellness program requires a long-term commitment to improvingemployee health and, over time, a company should realize financial benefits suchas reduced healthcare costs and greater employee productivity. However, it isimportant to manage expectations in the short-term. So, while it is important toimmediately track and measure the return on a wellness investment, it is importantremember that most financial benefits will be long term.

ROI analysis deals strictly with the financial impact of the wellness program and isfast becoming an essential evaluation method for workplaces that invest in well-ness. ROI analysis answers the question, “For every dollar invested in wellness, howmany dollars does the employer get back?” Calculating ROI is critical to the long-term success of a wellness program because it:

� Is a concrete way to validate the wellness program as a business tool

� Can be used to justify the cost of the wellness program to senior management

� Can be a useful tool for choosing future wellness initiatives

Using the following formula when measuring the ROI provides the percentage ofreturn earned for every wellness dollar spent.

ROI percent = ((Monetary Benefits minus Wellness Costs) divided by WellnessCosts) multiplied by 100

To get the figures for this formula, keep track of wellness costs, including: designand development (outside consultants for health risk assessments, outside partner-ships); promotion (newsletter and poster printing); administration; delivery (staff,technology, outside consultant); materials (pedometers, health fair supplies); facilities (on-site exercise equipment, walking paths, outside gym memberships);employee wages (wellness team members); and evaluation (outside evaluationconsultants).

After wellness program implementation, keep track of monetary benefits, includ-ing: health insurance savings; productivity increases through presenteeism reductions; absenteeism reductions; lower workers’ compensation costs; and lower turnover costs.

Two other measurements to consider are cost-effectiveness analysis (CEA) andcost-benefit analysis (CBA). CBA works hand-in-hand with ROI and monetizes all

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costs and all benefits. Results are then presented in a ratio of benefit-to-cost andROI. A 3-to-1 ROI means $3 was saved for every dollar that was spent.

Cost-effective analysis is helpful when trying different programs to achieve thesame wellness initiative, such as smoking cessation or weight loss. The cost effec-tiveness of Program A can be compared to the cost effectiveness of Program B bylooking at the cost for each employee who achieved a goal to stop smoking or toreach goal weight. Costs include program discounts, group rates, and inflationadjustments. Results are reported as an incremental cost per unit of effectivenessfor each respective program.

Suggestions for Wellness ProgramsIdeas that employers can use in their wellness programs are as varied as theemployees in an employer’s workforce. It may take some trial and error to find theones that create an enthusiastic response and achieve high levels of participation.Some successful programs have included one or more of the following:

� Voluntary screening to check blood pressure, cholesterol levels, and other riskfactors

� Personal finance education and counseling

� Smoking cessation program

� Financial incentives for voluntary participation in healthcare assessment

� Reduced copayments for drugs that treat asthma, diabetes, hypertension, andother chronic conditions

� Health insurance discounts for nonsmokers

� Health insurance surcharges for smokers

� Discounted gym memberships

� Partnering with local restaurants to provide healthy lunch options

� Reimbursement for membership in Weight Watchers or other weight-management programs

� Healthy food options in company cafeteria or vending machines

� On-site medical facility, fitness center, and pharmacy for employees’ use

� No out-of-pocket cost to employee for preventive care, e.g., annual physicalexam, well-child exams, mammograms

� Flu vaccinations

� Newsletters, e-mail notices, bulletin board postings, and other awareness strate-gies to increase participation in wellness initiatives

Both large and small employers can implement wellness programs that helpreduce the cost of health care and improve the health of employees. Carefulassessment of workforce needs, tailoring of programs to meet those needs, and acomprehensive health management strategy are all components that will help anemployer’s wellness program succeed.

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Get Employees Engaged in Wellness by CreatingStrong ‘Culture of Health’“Lack of employee engagement is one of the biggest obstacles to changing healthbehaviors,” stressed Jennifer Bruno, B.S., during a recent webinar titled, “Defining aCulture of Health and the Link to Business Performance.”

Bruno, executive director of Wellness & Prevention, Inc., a Johnson & Johnson Com-pany (J&J), cited a 2010 Towers Watson survey (http://tinyurl.com/24hs2ze), whichreported that 58% of employers rated lack of employee engagement as the biggestobstacle to changing employee health.

She explained that in late 2009, Wellness & Prevention, Inc., fielded its own study of3,000 full-time employees aged 25 to 60 that found that in companies with a strongculture of health, employees were three times more likely to report taking actionon their health than in other companies. Notably, only 26% of respondents to thesurvey described their company as having a strong culture of health.

The study also found that such companies have significantly higher employee par-ticipation rates across all their wellness programs, commented Bruno. For example,almost 75% of employees in a strong culture of health participated in eatinghealthy foods in their cafeteria (less than 50% did so in weak or moderate culturesof health).

Other wellness programs reported in the study as having good participation ratesin companies with a strong culture of health included physical fitness assessments,weight loss programs, and exercise participation (exercise classes and walking orjogging), noted Bruno.

Employees in companies with a perceived strong culture of health “rated allaspects of their performance higher than employees whose employers do not havea strong culture of health—overall personal life, overall work life, job performance,career paths, and ability to reach full potential at work,” Bruno explained.

She also stated that the study results showed an employer’s commitment toemployee well-being is as critical as a commitment to opportunity for advance-ment and is more important than being competitive with other employers in theareas of pay and benefits for overall job satisfaction.

What’s a ‘Culture of Health’?

Bruno shared this definition of a “culture of health” from Nico Pronk, Ph.D., presi-dent, International Association for Worksite Health Promotion: “A workplace ecology in which the dynamic relationship between human beings and their workenvironment nurtures personal and organizational values that support the achieve-ment of a person’s best self while generating exceptional business performance.”

Bruno stressed that a culture of health shares common themes, including management support, commitment, and leadership; motivational programs andenvironmental influences that help employees sustain behavioral changes; policies, procedures, and benefits that support employee health; two-way commu-nication between the employer and employee; outcomes measurement (i.e.,health risk factor reduction); and health improvement.

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At J&J, the culture of health includes shared attitudes and values between leader-ship and employees, noted Bruno. Examples are encouraging people to take awalk during the day or starting meetings with a health or safety tip, she explained.

Impact on Bottom Line

Bruno cited another Towers Watson report, “Staying@Work Report 2009/2010”(http://tinyurl.com/ygzrcuf), which found that companies committed to health asa business imperative achieve significantly better financial outcomes and loweremployee turnover. Those are outcomes that any organization would be happy to achieve!

To access the webinar, which includes a case study regarding J&J’s experiencesand successes with its employee wellness initiatives (shared by Fikry Issac, M.D.,M.P.H ., FACOEM, executive director, Global Health Services and chief medical offi-cer, Wellness & Prevention, Inc.), go to http://tinyurl.com/2fp45t5. You will need toregister, but the webinar is free.

Conclusion

We hope that you have enjoyed this special report, and that you found the informa-tion contained in this report useful. BLR strives to provide Human Resources pro-fessionals with practical and easy-to-use information on a wide variety of topics. Ifyou would like to see the complete library of publications available through BLR,please visit our website at www.blr.com or call our Customer Service Departmentat 800-727-5257.

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