Our Human Resources Blog

It seems more companies are hiring interns this summer!  Although hiring interns can be a great way to find low cost (no cost) high energy talent, along with it comes a big commitment of time and responsibility.

Employers and students benefit from internships in different ways. Students gain a basic understanding of the rules of the work world, an insider's view to a possible career path and some networking opportunities. For employers, interns can be a valuable asset. They help fill entry level positions and assist employers with innovative ideas and technology.

So how can employers make the most of their time with interns? Here are a few tips for managing interns. 

1. Make sure that you are prepared for your intern by putting together a collection of interesting, meaningful projects before they start their first day of work. Keep them busy and productive. If your intern turns projects over quickly, you don't want to be caught empty handed with nothing for them to do.

2. Don't assume that interns know how things are done. Expect that you'll need to give more guidance than with a seasoned employee. Interns today need to understand everything they can prior to starting the actual work- working hours, dress code, employer expectations etc.  You might need to explain things that an experienced employee would already know.  No playing computer games or hanging out on Facebook; call if you can't come in.

3. Hiring interns requires a great deal of time, both in training and supervising. Don't cut the intern too much slack just because they are low paid/unpaid. Hold them to the same standards you hold your regular staff. You want to avoid an intern whose work is sloppy and needs to be redone.

4. Make sure expectations and goals are clear. Explain why a particular task is important. Encourage your intern to ask questions. Discuss what you hope to accomplish and how it will contribute to your business/department's goals and objectives.

5. Lastly, have a discussion with your intern on what they're hoping to get out of their internship. Most often they are looking for experience, but if they have specific projects in mind, see what you can do to accommodate them.

With some advanced planning, close supervision and treating your intern professionally and respectfully(and expecting the same in return) the intern experience can be a win-win situation for all.  

Earlier this month, the new JOBS Act – Jumpstart Our Business Startups- was signed into law, making it easier for small companies to raise money without meeting all the usual requirements for initial public offerings. 

The new law, which received bipartisan congressional support, provides businesses that are in need of capital many more options than were previously within reach. Many supporters of the law believe it is the first step in helping startups and small businesses to grow, hire additional employees and create economic growth.  Critics of the Act believe the new law will “bring fraud back to Wall Street” by loosening the foundation of securities laws which are designed to protect investors. 

Important provisions of the law include: 

• Effective immediately, a privately-owned company with under $1 billion in revenue can raise up to $50 million without registering with the SEC. Previously, the limit was only $5 million.(If a company qualifies, it is exempt from the usual requirement of having to conduct independent audits of internal controls for up to five years.)
• The new law allows a qualified business to use "crowdfunding" to attract cash from investors of all shapes and sizes. Under the new law, investments are limited to the lesser of $10,000 or 10 percent of the income of an investor earning less than $100,000 a year.
• A company can have up to 2,000 shareholders or 500 unaccredited investors without registering with the SEC. (Prior to the new law, the number of shareholders was limited to 500.)
• The new law also removes an SEC ban on using advertisements to attract investors to a non-public offering. In the past, it has been difficult for companies to keep communications about a private stock sale under wraps.
• A bank (or bank holding company) doesn't have to register with the SEC until it reaches total assets of at least $10 billion and at least 2,000 investors. This is a substantial increase from the prior limit of 500 shareholders. (It is believed that this provision will free up more funds for small business owners to borrow.) 

The new law doesn’t take effect until the rules are established. The Securities and Exchange Commission has until January 2013 to define how the legislation will be enforced.

More of the nation’s workers have been suing employers under federal and state wage & hour laws. Due to the recent recession, businesses have laid off almost 9 million employees since 2008. This reduction has led to many employees working longer hours, for the same or less pay. Prompting workers to strike back...

 The number of lawsuits filed last year was up 32% from 2008.The majority of the grievances stem from workers having to put in more than 40 hours a week without overtime pay through various practices including:

• They were forced to work off the clock.
• Their jobs were misclassified as exempt from overtime requirements.
• Because of smartphones and other technology, work bled into their personal time.

 Many employers believe that the increase of lawsuits demonstrates how the 1938 Fair Labor Standards Act has become out of date in an age when most employees want the flexibility to work at home or answer business emails while running errands. 

Under the FLSA, employees are entitled to overtime unless they're executives who manage and hire and fire employees; administrators who make key decisions; or professionals — such as lawyers and engineers — with advanced degrees, among other criteria. Also exempt are certain information technology workers and sales representatives whose hours can't easily be tracked.

Last year, 7,006 wage-and-hour suits, many of them class actions, were filed in federal court, nearly quadruple the total in the year 2000. The Department of Labor has stepped up its efforts to protect workers by adding 300 wage-and-hour investigators the past two years, increasing its staff by 40%.

In 2011, a southern Texas hospital instituted an unusual policy that stated they will no longer hire obese people. The hospital's chief executive, defended the policy by saying “the majority of our patients are over 65 and they have expectations that cannot be ignored in terms of personal appearance.” According to the policy, anyone with a Body Mass Index (BMI) of over 35 will not be considered for employment. 

To clarify, BMI is calculated on height and weight, with a measure of over 30 qualifying as obese. This means that a 5 foot 10 inch man who weighs 245 pounds or a 5 foot 2 inch woman at 195 pounds would have a BMI of over 35 and therefore be considered obese. 

As outrageous as the hospital's policy is, overweight people have few legal protections when it comes to workplace discrimination. Overweight Americans are not considered a civil rights, protected group- as minorities or older workers.  They are only protected from discrimination if their weight is registered as a formal disability under the 1990 Americans with Disabilities Act. Only one state (Michigan) and six cities in the US have anti-discrimination laws that extend protections to the overweight. 

The hospital’s policy is an extreme example of weight bias- but the nation’s companies have been increasing their scrutiny on weight and healthier employees for years. It’s a well known fact that healthy employees cost companies less, especially when it comes to insurance, sick time and productivity. 

Although, healthy employees are considered an important factor in reducing business costs, hiring practices should be based on qualifications- not appearance. Does a person’s weight have an adverse effect on his or her ability to perform a specific job?   Refusing to hire people based on image is a risky business practice-  a practice that could cause major legal ramifications down the road.

The numbers are in and according to reports released for the month of March - employment increased by 100,000 employees for private sector businesses with less than 50 employees. According to data, it was the fourth time in the past 5 months where payrolls of the smallest businesses increased by at least 100,000 employees. A total of 548,000 employees were added to small business payrolls since October 2011. 

Medium sized businesses (50 to 499) and large company payrolls (500+) also saw a boost in numbers- 87,000 and 22,000 new jobs, respectively. Among all sized companies, the construction and financial service sectors were especially active in hiring. 

Although the increases of the Intuit Small Business Employment Index were small, the results were positive as well. The average monthly compensation rose by .7% and the average monthly hours worked increased by .5%. 

According to economists, the reports are the strongest for small business that we have seen in a long time.  There are still uncertainties though, that are causing many small businesses to remain cautious. The uncertainties of health care expenses and tax benefits are keeping businesses from large capital expenditures- expenditures that can help create additional jobs.

In Maryland, Robert Collins was applying to be rehired by the Maryland Department of Public Safety after a leave of absence. He was shocked when his interviewer firmly requested his Facebook password.  Robert supplied it, as he needed the job to “feed his family”.  This story and others have been all over the news the past few weeks—companies asking potential employees for their Facebook passwords as part of the job application process.

Facebook’s Chief Privacy officer Erin Egan stated the following – “this practice undermines the privacy expectations and the security of both the user and the user's friends. It also potentially exposes the employer who seeks this access to unanticipated legal liability."

According to legal experts, besides being an invasion of privacy, asking for passwords from job applicants is a potential risky HR hazard for employers. Facebook profiles most likely contain information that is off limits in the hiring process- age, ethnicity, nationality, religion, and sexuality all might be found.  If an employer sees that someone is a member of a protected group and they don’t hire that person, they may open themselves up to claims of discrimination. 

Legal and privacy issues aside, asking for Facebook passwords is not a best business practice for companies.  Do you want practices that make employees feel invaded as soon as they walk in the door- with no sense of privacy or personal space?  Do you want to be viewed as “Big Brother”? Practices like these have the potential to negatively affect a company’s recruitment and retention. 

When recruiting, employers should stick with the time tested principles of conducting interviews, checking references and background screenings to find the best candidates.

The US News & World Report recently published a very interesting article on workplace benefits. The article “21 Workplace Benefits That Are Rapidly Disappearing” discussed a survey by The Society for Human Resource Management (SHRM) of over 600 Human Resource professionals.

The survey showed a significant cut of benefits and perks that employers offered employees over the last 5 years. Traditional pension plans, long term care, family leave and even the company picnic have all declined. Approximately 77% of companies surveyed reported that benefit offerings have been negatively affected by the slow economy.  The two biggest areas of cuts have been in health care and retirement- as that’s where the largest cost increases have occurred.

 Here is a summary of the workplace benefits that have significantly declined since 2007:

Traditional Pension Plans- Traditional pensions were offered at 40% of the companies surveyed in 2007. Now just 22 % of firms provide access to a retirement plan that guarantees payments for life.

Retiree Health Care Coverage- The proportion of companies offering retiree health insurance declined from 35 % in 2007 to 25 % in 2011.

Long-Term Care Insurance- 29% of employers provide long-term care insurance for workers, down from 46 % in 2007.

Health Maintenance Organizations (HMOs) - The number of companies with HMOs decreased from 48 % in 2007 to 33 %. Preferred provider organizations (PPOs) are much more common, with 84 % of companies offering this type of health insurance plan.

Paid Family Leave- A third of companies offered paid family leave in 2007, but now only a quarter of companies provide paid time off for births, and other significant family events.

Adoption Assistance- Adoption assistance is another waning employer benefit, with just 8 % of companies helping with adoption costs, down from 20% five years ago. Foster care assistance also declined significantly from 10% of companies in 2007 to only 1% in 2011.

Professional Development Opportunities- While nearly 96% of companies paid for professional development opportunities in 2007, only 87 % did in 2011. The proportion of employers offering mentoring programs also decreased from 26 % 5 years ago to 17 %. “Work development is one of the things that helps train and recruit employees and can only be temporarily cut,” says Mark Schmit, research director of the SHRM. “We see dips in it during recessionary times and then we see it come back following those recessionary times.”

Life Insurance for Dependents- About half - 55 % of companies provide life insurance for children and other dependents, down from 65 % in 2007

Incentive Bonus Plans- Bonuses for executives are also on the chopping block. Incentive bonus plans for high-level employees are currently offered at half of the companies SHRM surveyed, down 10 % since 2007.

Legal Assistance- One in five companies provides legal assistance or services to workers, down from a third of employers five years ago.

Sports Team Sponsorship- Only 17% of employers currently sponsor sports teams for workers or their families, a significant decrease from the 29 % of companies that did so in 2007.

Executive Club Memberships- While about a quarter - 24 % of companies subsidized executive club memberships for certain workers in 2007, now only 14 % continue to provide this perk.

Relocation Benefits- Employers have significantly cut back on temporary relocation benefits, location visit assistance, and spouse relocation assistance. And only a small proportion of companies continue to offer to pay a cost-of-living differential 10 % or provide assistance selling the previous home 9 %.

The Company Picnic- Many firms are cancelling the company picnic. Only about half - 55 % of firms scheduled a company picnic in 2011, down from 64 % in 2007.

Company Purchased Tickets- Season tickets to the local sports team or theater that are shared by employees are now only offered by about 26 % of employers, a considerable decline from the 42 % of firms that provided workers with subsidized event tickets five years ago.

In February, The Department of Health and Human Services, the Department of Labor and the Treasury Department issued a final rule under the Patient Protection & Affordable Care Act.  The mandate will require U.S. health insurers and group health plans to provide comprehensive information about plan benefits and coverage to participants.  The rule is intended to make it easier for individuals to compare one healthcare plan to another. 

The rule requires both the insurer and the plan administrator (typically the employer) of group health plans to provide employees and new hires certain disclosures about the benefit plans offered. Employers may be penalized if the insurer fails to furnish the information- so ultimately the employer will be responsible. The information is to be provided to all participants and beneficiaries who enroll in healthcare coverage on or after September 23, 2012 and annually during each open enrollment period thereafter. 

Employers will be required to provide two key documents that will help employees understand their health insurance benefits.  The required documents are: 

• The Summary of Benefits & Coverage (SBC) summarizes and explains the benefits and coverage provided by a company’s group healthcare plan. The format and content of the SBC must conform to several specific requirements, including font, length and language requirements. 
• A uniform Glossary of Terms commonly used in health insurance coverage, such as “deductibles, co-payment and co-insurance”. The glossary should also provide examples of common benefit scenarios, such as “pregnancy, diabetes and other chronic and/or serious medical conditions”. 

For additional information, please go to http://www.dol.gov/ebsa/healthreform/

Yesterday, the state of Maryland became the eighth state in the nation to legalize same sex marriages. Maryland now joins Massachusetts, Iowa, Vermont, New Hampshire, Connecticut, New York and the District of Columbia in states that have made it legal for same sex couples to wed.  Unless the bill is repealed, nuptials in Maryland could begin as early as January 1, 2013. With this legislation, state agencies will be required to extend the same benefits to gay couples that are extended to heterosexual couples. 

So what does this mean for employers? Same-sex marriages may present benefit-related difficulties for employers because of the mixed messages federal and state governments have given regarding the status of same-sex couples throughout the United States. 

For example, under the Federal Defense of Marriage Act,(DOMA) same sex marriages do not receive federal rights and benefits, regardless of any given states benefits. Federally excluded rights include, social security benefits, pension plan benefits, spousal immigration rights and income tax benefits. 

So what steps should employers take?

• Check to determine if any of the states in which you operate authorize or recognize same-sex marriages;
• Update personnel policies regarding discrimination and harassment to cover all applicable protected classes;
• Update personnel policies, if needed, regarding non-mandated and state leave laws to include leave for same-sex spouses;
• Review employee communications, administrative procedures and systems, and company policies to ensure that they cover the intended beneficiaries and comply with applicable state and federal laws.
• Offer additional training for supervisors/managers to cover the rights and obligations of same-sex couples;
• Review policies and procedures to ensure that the same requirements are being applied to both same-sex and opposite-sex couples for purposes of establishing benefit eligibility

This morning Congress approved legislation renewing the Payroll Tax Cut bill- sending the bill on to President Obama for his signature. The bill extends the payroll tax cut, unemployment benefits and avoids a Medicare fee cut for physicians through 2012. Without this extension all three measures were set to expire at the end of this month. 

The bill extends the 2% percentage point cut to the 6.2% Social Security tax that is deducted from workers paychecks.  Employees will continue to pay 4.2% into Social Security on the first $110,100 of wages instead of the 6.2% that was paid prior to 2011. 

The bill also extends benefits for the unemployed through 2012.  Under the terms of the deal, in states with unemployment rates higher than the national average of 8.3%, the maximum time an unemployed person can receive benefits will drop from 99 to 73 weeks. The maximum length of benefits for people in states with an average unemployment rate or lower will drop to 63 weeks or as far down as 40 weeks. 

 In addition, states will be allowed to perform drug tests on individuals applying for unemployment benefits if those people lost their previous job because they either failed or refused an employer's drug test. Individuals receiving unemployment assistance could also be tested if they are seeking a job that generally requires a drug test. 

Welfare beneficiaries will also be banned from using their electronic cards to withdraw funds from teller machines in strip clubs, liquor stores, and casinos. 

The bill also prevents a 27% cut in federal reimbursements to doctors who treat Medicare patients, a reduction that threatened to make it harder for seniors to find physicians.