New Year’s Resolutions for Employers

So, you’ve given up carbs, created a budget, and kicked your Facebook/Candy Crush/Starbucks/shopping /smoking/swearing habit. Good for you! But the new year is not just a time to clean up your act in your personal life. It’s also the perfect time to adopt better habits in your professional life, particularly if you are an employer.  To get you started, PMP has prepared this list of the top five new year’s resolutions for employers.

  1. Always Involve an Experienced HR Consultant or Counsel in Termination Decisions.

When you are considering firing an employee, it is crucial that you assess the facts from a legal/HR perspective. While you may be fully justified in your decision to terminate, there may be steps you should take before doing so. For example, if your company has a progressive discipline policy, adhering to that policy will help you defend the decision to terminate should a complaint arise. Also, if the employee has previously made a complaint involving discrimination, wage and hour issues, or other legal rights, then an HR professional or counsel can help you ensure that any termination decision will not be viewed as retaliatory. Thus, picking up the phone for a legal/HR assessment of any firing decision can help a company avoid significant liability in the future.

  1. Document Everything!

This resolution relates to Resolution No. 1 above. Any disciplinary act, incident of employee misconduct, or performance issue that may be relevant to a decision to terminate should be thoroughly and contemporaneously documented. It is not necessary to be overly formal in your documentation style; in many circumstances a simple email to the employee or to the file will suffice. It is also important to document requests for FMLA leave, other leaves, and religious or disability accommodation, as well as the company’s responses to such requests. Likewise, the employer’s response to any employee complaint about discrimination or the terms or conditions of employment must always be documented.

  1. Learn to Recognize and Respond Appropriately to Requests for Disability Accommodation, Religious Accommodation, and Family/Medical Leave

Building upon No. 2 above, it is important for employers to recognize an employee’s request to exercise legal rights when it is made. Employees need not use the words “family and medical leave” when making an FMLA request, for example. An employee might simply say, “Hey, I need to take some time off to take care of my mom while she recovers from surgery.” Supervisors must be trained to recognize and appropriately address such requests when they are made.

  1. Stop Retaliating. Period.

Employers generally are aware that retaliating against an employee for exercising legal rights is unlawful. But the ability to apply this general awareness to specific situations is another matter. Too often, employers engage in unlawful retaliation without realizing they are doing so. For instance, an employer might be angered that an employee publicly complained on Facebook about his pay, or about other conditions of his employment. Many employers in this situation will discipline or even terminate the employee, believing they have every right to do so to protect the company from further embarrassment. But in fact, the employee’s Facebook rant may well have been protected activity under the National Labor Relations Act. For another example:  an employee may complain that she was sexually harassed. Upon investigating the complaint, the employer may determine that there was no unlawful harassment. The employer might then decide to fire the complaining employee for making a false complaint. But the employee may be protected under the law from retaliation even if the complaint turned out to be without merit. This means that terminating the employee may constitute retaliation. To stay on the right side of retaliation law, employers should adhere to Resolution No. 1 above. And in addition to getting professional advice before terminating an employee, employers are well advised to seek such advice before engaging in any discipline short of termination if the employee has previously made a complaint or request that may be protected under the law.

  1. Be Consistent (Within Reason).

When granting or denying employees’ requests, disciplining employees, paying severance, or making a host of other decisions affecting employees, it is advisable to be as consistent as possible. Treating employees the same and according to well-communicated, easily understood rules and procedures can help employers avoid claims of discrimination based on race, religion, age, disability, or other protected class status. That being said, there are times when deviation from the norm is appropriate. For example, you may have offered severance to an employee you terminated six months ago, but the circumstances surrounding your latest termination decision – such as employee misconduct—may make you reluctant to offer this employee the same benefit.  Whether consistency is important in any given situation can be a tough call for employers to make. To avoid liability arising from inconsistent practices, consult with an HR professional or counsel before going rogue.

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While not an exhaustive list of rules by any means, these resolutions are intended to put your business on the road toward legal compliance and liability avoidance in 2017. For additional help in this regard, contact PMP about its training programs, which are designed to give management the tools they need to comply with all five of the above resolutions and more. PMP is also available, together with its affiliated attorneys, to assist you with specific situations, provide guidance on best practices, and update your company’s employee handbook. Happy New Year! Contact us at 800-921-2195 or 516-921-3400. You can also visit our website http://www.pmphr.com/ or e-mail us at info@pmpHR.com.

 

This article is intended for general information only and should not be construed as legal advice.



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Freelance Workers Must Have Written Contracts in New York City

Effective May 15, 2017, freelance workers in New York City will have new legal rights under the Freelance Isn’t Free Act (“FIFA”), a new law enacted by the New York City Council and signed by Mayor DeBlasio on November 16, 2016. FIFA provides that when a company retains the services of a freelancer for a value of $800 or greater, the freelancer must be given a written contract. The law is intended to make it easier for freelancers to collect payment for their services at the agreed-upon rate and in a timely manner.

FIFA defines “freelance worker” as any individual or an organization composed of no more than one individual that is retained as an independent contractor to provide services for compensation. This means that if your business retains the services of a vendor made up of more than one person, the engagement would not come under the Act. But if a business retains the services of a single person as an independent contractor rather than an employee, or a single-member LLC or a corporation comprising only one person, the engagement will be governed by FIFA.

Any written contract entered into under the new law must include the following information:

  • Name and address of freelance worker of the hiring party and the freelance worker;
  • An itemization of services to be provided, their value and the rate and method of compensation; and
  • The date on which payment will be made or the mechanism by which the payment date will be determined.

Regarding the timing of payments to freelancers, FIFA further provides that freelancers must be paid by the date stated in the contract or, if the date is unspecified, no later than 30 days after completion of the contracted-for services.

In addition, FIFA prohibits retaliation against a freelance worker for exercising his rights under the law, including by refusing to provide work to the freelancer in the future because the freelancer has done so. A freelancer may exercise his rights under FIFA by filing a complaint with the director of the office of labor standards and/or bringing a lawsuit, in which the freelancer may be awarded double damages as well as attorney fees.

Accordingly, businesses who in the past have enjoyed informal arrangements with freelancers must begin formalizing those arrangements starting May 15, 2017. However, the Act will not apply retroactively to arrangements entered into prior to that date.



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Employee Responding to Emails at Home are “On the Clock”

A recently enacted French law giving employees a legal right to ignore work-related emails after office hours is attracting international attention. And no wonder! The obligation to check email in the evenings and on weekends has become so entrenched that the idea of being allowed to unplug seems nothing short of revolutionary.

Here in the U.S., there is no federal law directly addressing whether workers must answer work emails after hours. There are, however, laws mandating that all working time be compensated. For non-exempt employees—i.e., employees who are entitled to overtime compensation—this can create a tricky situation for employers. Employees may not be tracking the time they spend reading and responding to email outside of office hours. This can easily result in employer liability for unpaid overtime, even if the time spent on afterhours work is relatively short. For example, if a non-exempt employee who works 40 hours a week in the office also spends 20 minutes, three nights a week, answering emails from home, that employee is now working 41 hours per week and is entitled to time and a half for the 41st hour.

Unfortunately, some employers are under the impression that if an employee is answering emails after hours voluntarily, the time need not be compensated. In other words, these employers believe that if employees work from home at night not because they are required to but because they are ambitious and wish to seem accessible to their bosses, the time spent is not compensable. But that is not the case. All work must be compensated. And employers should bear in mind that email, by its nature, creates a written record of time worked. The exact amount of time spent may not be clear, but if an email was received and read at 9p.m. and a reply sent at 9:15p.m., a Department of Labor investigator might reasonably assume that the employee performed work for 15 minutes on the evening in question.

Accordingly, employers are well advised to maintain clear policies regarding after-hours work, including time spent answering emails, as well as clear policies regarding overtime. Employees should be instructed that all time spent working is to be included in their time sheets, regardless of when or where the work was performed, and regardless of whether it took five minutes or several hours. They should also be instructed that working overtime requires pre-approval from a supervisor. Likewise, supervisors should be directed not to send employees off-hours email unless truly necessary and, further, to be mindful of the extra hours it might cause the employee to work, possibly incurring overtime obligations.

Since it is unlikely that the U.S. will follow Frances’ example in banning after-hours work email any time soon, U.S. employers need to function within the reality of today’s workplace, whether that workplace is the office or an employee’s kitchen, commuter train, or any other place where they feel compelled to respond to that persistent ping in their pockets. Employers who understand this reality and create policies to address it lawfully and appropriately can avoid liability for unintended labor law violations.



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New Form I-9: But You Still Need To Know The Basics

The long-anticipated, newly revised Form I-9 was released on November 14, 2016.  This new form replaces the Form I-9 that was issued on March 8, 2013 with an expiration date of March 31, 2016.  As with previous new versions of the Form I-9, there is a grace period before companies must begin using the new version.  This time the grace period is longer than usual—companies have until January 22, 2017, before they must begin using the new version of Form I-9.

Prior to issuance of the recently revised Form I-9, significant increases to fines were announced on August 1, 2016 for Form I-9 violations. Although the new form has some changes, overall the new form looks very similar to the previous Form I-9.  Before we delve in to what has changed, companies should know and keep in mind that the compliance basics of Form I-9 have not changed.

To avoid incurring the newly raised fines, being proactive is key!  When PMP conducts an I-9 audit for companies, certain areas are traditionally the most problematic and can trigger high fines should the U.S. Immigration and Customs Enforcement (ICE) come knocking at the door.  So….before implementing the new Form I-9, employers should seize this opportunity to conduct a self-audit of your current forms and practices to assure that everyone authorized to handle these forms has been properly trained.  Bear in mind that, to be effective in discovering errors, a self-audit should only be conducted by a knowledgeable person other than the person that usually completes Section 2 for the company.  As a certified IMAGE Business Partner with ICE, PMP can not only conduct the mock audit but also train your staff on best practices to avoid errors in the future.

When completing the Form I-9 or conducting a self-audit, the following 10 items should always be kept in mind:

  1. Section 1: must be completed and signed by the employee no later than the first day of employment;
  2. Section 2: must be completed by HR or an authorized company representative no later than the 3rd day after the first day of employment;
  3. For Section 2: company must review original and unexpired documents at the time they complete this section;
  4. Employer must not ask the employee for any specific documents. Employee should be given the list of acceptable documents and the employee must choose either 1 from Column A or 1 from Column B plus 1 from Column C;
  5. Photocopying the documentation is voluntary except for the E-Verify exceptions – just remember that too much documentation is still a big No-No;
  6. The documentation portion of Section 2 must be correctly and fully completed (issuing authority, document number, expiration date—as applicable). Making photocopies of the documents does not take the place of correctly completing this area;
  7. Never, ever use correction fluid (i.e., White-Out) on any part of Form I-9;
  8. Original I-9s must be maintained for all current employees hired after November 16, 1986;
  9. Forms for separated employees should be kept in a separate file. These forms must be retained for either three years from date of hire or one year from the employee’s last date of employment—whichever is later.  (Contact PMP for a free copy of the retention sheet information.)
  10. Although there is a Spanish-language version of Form I-9 available, it is available only as a translation tool — unless the employee is located in Puerto Rico, in which case the Spanish-language form may be used to satisfy I-9 requirements.Now, let’s discuss some of the changes in the new Form I-9.  One of the most obvious changes is that the instructions went from 7 pages to 15 pages. A lot of “stuff” to read for a 2-page form!

    The new form has been issued in both conventional (printable, hard-copy) and “smart” form versions.  However, although the smart form version can be completed on the computer (with Adobe Acrobat), it must be printed out, hand-signed and retained in a separate file as previous I-9s.  Although it is “smart” — it’s not that smart!  It won’t catch typing errors or errors in dates. You still need to review the information for accuracy.  YOU are ultimately responsible for errors found during an ICE audit.

    Although this article cannot detail all of the changes in the new I-9, below are a few notable ones:

Section 1: To be completed by employee

  • The employee must indicate (by checking one of two boxes) whether a preparer and/or translator assisted them with the completion of this section, including someone from the company’s HR department. If anyone assisted the employee, that person must then complete this part of Section 1.  The smart form allows for multiple boxes to be completed if needed; for the hard copy, this can become a third page to the form if multiple persons assisted.
  • Almost all fields not containing information will now require that “N/A” be shown (going forward you can receive violations if N/A is not entered).

Section 2: To be completed by employer

  • In addition to a more visible area for the employee’s name at the top of page 2, employers must now fill in the employee’s “Citizenship/Immigration Status.”
  • Smart form has drop-downs for document selections. Reminder: if document number or expiration date is not applicable, you must enter “N/A” on that line
  • New Field/Box: “Additional Information” will can be used to note TPS extensions**, employee termination and form retention dates or other notations on visas, etc. that the employer may need.
  • Instructions reworded to identify the person who physically examines the documents and completes Section 2 – this person must sign his/her name.

Section 3: Reverification and Rehires

  • Reverification does not apply to List B documents or U.S. citizens, noncitizen nationals, or lawful permanent residents who present a Permanent Resident Card.
  • If you rehire an employee within three years from date that the Form I-9 was previously executed, the employee does not need to provide any additional documentation—unless the employment authorization has since expired
  • If Section 3 had been previously used for reverification but you rehire the employee within the three years, you may complete Section 3 on a new Form I-9 and attach to current form.

This is not an exhaustive listing of the changes.  For any additional information on the new Form I-9 or to schedule a mock I-9 audit, please contact PMP.  To print out a copy of the instructions or new Form I-9, click here.

Portnoy, Messinger, Pearl & Associates, Inc. is here to answer any questions you have regarding the new form I-9. Please keep in mind that in addition to our staff of seasoned HR professionals, we also have a staff of experienced employment lawyers on hand to address any questions you may have regarding compliance.

This article is intended for general information only and should not be construed as legal advice.

 

**Temporary Protected Status (TPS): On September 22, 2016, The Department of Homeland Security (DHS) announced the decision that conditions in Guinea, Liberia, and Sierra Leone no longer support their designations for TPS. Guinea under the current designation for 6 months for the purpose of orderly transition before the TPS designation of Guinea terminates. The termination will become effective May 21, 2017.  To provide for an orderly transition, nationals of Guinea, Liberia, and Sierra Leone (and individuals having no nationality who last habitually resided in Guinea Liberia, and Sierra Leone) who have been granted TPS under the Guinea, Liberia, and Sierra Leone designation will automatically retain their TPS and have their current Employment Authorization Documents (EAD) extended through May 20, 2017.  USCIS has automatically extended the validity of employment authorization documents (EADs) issued under the designation of TPS Guinea for an additional 6 months, through May 20, 2017.  After that date, individuals from these countries with TPS/EAD will no longer be eligible to work in the United States.   It is important to note that although these individuals are no longer qualified to work in the United States under a TPS as of the effective dates, they may still be qualified to work under additional immigration statuses they may have acquired while in the country.



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HR Tips for the Holiday Season

Let’s hear those sleigh bells jinglin’, ring-ting-tinglin’, too! Come on, it’s lovely weather for an HR headache for you!

The holiday season can be a wonderful time, even in the workplace. It is a time to take a step back, show your staff some well-earned appreciation, and celebrate another successful year together. The holiday season can, however, bring with it its own particular HR woes. Some common holiday-specific workplace issues are discussed below.

Workplace gift-giving:  

Employees should never be made to feel pressured to purchase gifts for their supervisors. For example, employers should ensure that no one in HR is soliciting contributions for a gift for the boss. In the reverse scenario, where supervisors are giving presents to underlings, they should avoid anything too intimate in nature (stay away from pajamas and perfume, for example), and avoid any appearance of favoritism — don’t single out one employee with a more valuable gift than others are receiving. In addition, any “Secret Santa” or “Yankee Swap” should be subject to a low monetary limit, and participation should be purely voluntary.

Avoiding discrimination claims:

With talk of a so-called “War on Christmas” now a holiday tradition in its own right, many people feel strongly about not letting “political correctness” dictate their words and actions at the holidays. But employers who are frustrated by political correctness should be careful not to be so zealous about this issue that they make employees who do not celebrate Christmas uncomfortable. When it comes to the holidays, inclusiveness should be your watch word. Resist any urge you may have to put up a nativity scene in the break room, lead a group prayer at the holiday party, or engage in other religious speech or action that may appear to be company-sponsored.

Fielding PTO requests:

Many employees will want to take time off at the holidays. Some of these employees will have planned for this, ensuing they have sufficient accrued PTO time. Others will not have. If employees who have exhausted their allotted PTO wish to take time off at the holidays, some employers may choose to let them borrow against next year’s PTO allotment. Others may deny the request. The choice is up to the employer, but it advisable to be as consistent as possible about these decisions to avoid any appearance of discrimination.

Holiday party concerns:

Hosting a holiday party is a popular way for employers to express their appreciation for employees’ hard work throughout the year. But if alcohol is served at the party, employers can be subject to liability for accidents caused by inebriated employees, even when such accidents occur after the party has ended. For example, in some jurisdictions, an employer may be held liable for a drunk driving accident caused by an employee after leaving a work event where alcohol was served. To minimize such liability, and – more importantly — to ensure the safety of employees and others, employers should take steps to limit alcohol consumption at company-sponsored events. For example, providing each employee with one or two drink tickets only, or having the bar open for a limited period of time, and ensuring that minors are not served, are all steps in the right direction. And always, if alcohol is being served, plenty of food should be provided as well.
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If you need further guidance on any issues or are faced with another holiday-related HR predicament, please contact PMP. And from all of us here at PMP, here’s wishing you a happy holiday season and a successful new year!  Please keep in mind that in addition to our staff of seasoned HR professionals, we also have a staff of experienced employment lawyers on hand to address any questions you may have regarding compliance.



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Changes to Salary Thresholds for New York Overtime Exemptions Still Expected, Despite Injunction Halting Federal Changes

Although the changes to federal overtime regulations that were expected to become effective on December 1, 2016 have been halted by a preliminary injunction (see our article on this at http://blog.pmphr.com/2016/12/01/new-overtime-rules-halted/), New York employers are not off the hook yet. As we reported previously (see http://blog.pmphr.com/2016/11/10/think-you-are-prepared-for-the-new-overtime-changes-think-again/) the New York Department of Labor has announced proposed changes to overtime exemption salary thresholds applicable to New York employees. The period for public comments on the proposed changes ended on December 3, 2016, with a final rule likely to be issued this month.

Under the proposed changes, the salary thresholds for the administrative and executive exemptions to New York’s overtime requirements would be updated as follows:

For employees working for “large” employers (11 or more employees) in New York City:

  • $825.00 per week on and after December 31, 2016;
  • $975.00 per week on and after December 31, 2017;
  • $1,125.00 per week on and after December 31, 2018.

For employees working for “small” employers (fewer than 11 employees) in New York City:

  • $787.50 per week on and after December 31, 2016;
  • $900.00 per week on and after December 31, 2017;
  • $1,012.50 per week on and after December 31, 2018;
  • $1,125.00 per week on and after December 31, 2019.

For employees working in Nassau, Suffolk and Westchester Counties:

  • $750.00 per week on and after December 31, 2016;
  • $825.00 per week on and after December 31, 2017;
  • $900.00 per week on and after December 31, 2018;
  • $975.00 per week on and after December 31, 2019;
  • $1,050.00 per week on and after December 31, 2020;
  • $1,125.00 per week on and after December 31, 2021.

For upstate employees –i.e., those working anywhere other than New York City or Nassau, Suffolk, or Westchester County:

  • $727.50 per week on and after December 31, 2016;
  • $780.00 per week on and after December 31, 2017;
  • $832.00 per week on and after December 31, 2018;
  • $885.00 per week on and after December 31, 2019;
  • $937.50 per week on and after December 31, 2020.

Thus, while the changes to federal exemption salary thresholds may never come to pass, in view of the preliminary injunction recently issued by a federal judge in Texas, employers in New York should prepare themselves for changes to salary exemptions under New York law. Employers who have employees in different parts of the state should pay close attention to the differing requirements base on location.

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Portnoy, Messinger, Pearl & Associates, Inc. is here to answer any questions you have regarding this matter.  Please keep in mind that in addition to our staff of seasoned HR professionals, we also have a staff of experienced employment lawyers on hand to address any questions you may have regarding compliance.



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New Overtime Rules Halted

Just days before the new overtime rules were set to take effect on December 1, a federal judge in Texas has issued an injunction that will stop the new rules from becoming effective. The new rules were to significantly increase the salary threshold applicable to certain exemptions from overtime pay requirements — from $23,600 per year to $47,476 per year.

Judge Amont Mazzant III of the Eastern District of Texas ruled yesterday that the Department of Labor lacked the authority to make the change. The judge reasoned that such a high salary threshold would mean that the salary aspect of exemption tests would effectively supplant the duties test. The judge said that the original intent of including a salary threshold in the exemption tests was merely to “screen out” obviously nonexempt workers so that a duties test would not be necessary in their case. An increase of the salary requirement to $47,476 per year would create, he said, “essentially a de facto salary-only test,” making the duties of the employees in question irrelevant to their status as exempt or non-exempt.

Although yesterday’s ruling was only a preliminary injunction, pundits have predicted that the new salary threshold is unlikely to be revived, given the conservative bent of the Fifth Circuit Court of Appeals (which would hear any appeal of Judge Mazzant’s ruling) and the fact the Department of Labor under the upcoming Trump administration may be less likely to fight for the would-be rule. Employers, stay tuned!

Those with questions about the Texas court’s decision and what it means for their business should contact Portnoy Messinger & Pearl. In particular, employers who have already taken steps to implement the new rules – especially those who have announced salary raises or other changes to their staff – may need guidance in determining next steps.

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Portnoy, Messinger, Pearl & Associates, Inc. is here to answer any questions you have regarding the Texas court’s decision. Please keep in mind that in addition to our staff of seasoned HR professionals, we also have a staff of experienced employment lawyers on hand to address any questions you may have regarding compliance.  Contact us at 800-921-2195 or 516-921-3400. You can also visit our website http://www.pmphr.com/ or e-mail us at info@pmpHR.com.



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Concerns in Non-Profit Executive Compensation

Guest Article By:

Michael F. Maciekowich, National Director

Astron Solutions, LLC

A natural concern that many have in the non-profit sector is the compensation of executives. In fact, a 2011 report from the Chronical of Philanthropy highlighted that the median pay of executives in a survey of 132 charities and foundations increased by 3.8% of the prior year. Three years later, Charity Navigator reported that the typical charity CEO’s compensation had increases of just 2.6% over the prior year. Their report surmises that raises have been modest since the recession. However their report also acknowledges that despite this, there are some non-profit leaders that earn “excessive” wages of more than $1 million. Factors involved in enhancing pay include:

  • Greater competition among non-profits to attract top talent
  • Difficult in retaining staff and a lack of internal candidates for some important positions
  • Non-profits desire to lure corporate executives as the finances of non-profits have become subject to greater government scrutiny.

In addition to higher pay, some non-profits compensate for the lack of stock options and other corporate extras by allowing flexible work time. Others even pay bonuses, once rare at non-profits.

In recent years, the Internal Revenue Service has begun examining executive compensation at non-profits with an eye toward uncovering potential abuse. Understanding the need to recruit and retain quality staff has added to the concern over how to structure compensation policies and programs to be fair and competitive. Incentive plans and other innovative compensation and human resources practices are becoming critical elements in the organizational strategy of many non-profit organizations.

Consider these details when developing a compensation plan for executives in non-profit:

  1. Rationale for developing plans

  Non-profits indicated multiple reasons for creating new programs. More than half of the participants indicated their program objectives included the following: improve morale and/or employee relations; improve employee retention; link pay to performance/improve employee performance; and become more competitive in total compensation (i.e., cash compensation, recognition, and benefits).

  1. Types of plans and performance measures

  The most popular types of cash compensation and recognition programs implemented by the participants were bonuses, incentives, and non-cash recognition programs.

  Productivity, financial, and quality measures were the performance criteria most often used as the basis for the respondents’ compensation awards under a variety of programs.

  1. Budget and award amounts

  The average variable compensation award payouts typically ranged from 20% – 30% of salary. In some organizations, the targeted payouts ranged from 10% – 20% of the salary range midpoint. Interestingly, in Astron’s confidential database of non-profit organizations, target incentives levels are as follows:

  Staff / Non-Management: 5% – 10%

  Supervisory Staff: 5% – 15%

  Middle Management: 10% – 20%

  Senior Management: 15% – 30%

  Executive Management: 20% – 40%

  CEO: 30% – 50%

In addition, here are some guidelines to consider when implementing a new compensation plan:

  1. Non-profit organizations should first conduct an assessment to determine the appropriateness of innovative compensation to their culture and organization. This assessment should focus on the objectives to be achieved through implementing an innovative compensation program, what motivates staff, the opinions and views of members, constituents, and volunteer leaders, and the financial resources available.
  2. Any innovative compensation program should be viewed as part of a total approach to compensation and carefully integrated into the design of that program. A market analysis of current compensation levels related to the jobs in the organization should be conducted in the early stages of or prior to developing a program.
  3. The innovative compensation program, especially management incentive programs that provide significant opportunities for financial rewards, should be clearly tied to performance. The program should demonstrate the achievement of overall organization objectives in finance, program, development, client service, membership, public affairs, government relations, community relations, and any other areas deemed important to the organization.
  4. Organizations should consider pilot testing an innovative compensation program on a selected group of staff before introducing it to all staff. More than one innovative compensation program should be considered, especially in larger organizations. The majority of non-profit organizations in the survey had implemented at least two types of programs.
  5. Innovative compensation programs should be well communicated to staff and used as a vehicle to announce the success of employees, teams, and the organization.

Do you work in the non-profit sector? Is executive pay a concern for your organization? Is there some form of transparency to alleviate those concerns? Are you considering or recently changed your compensation plan? Contact Michael Maciekowich, National Director, Astron Solutions, LLC at 212-792-8886 or michaelm@astronsolutions.com.



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Think You Are Prepared For The New Overtime Changes? Think Again!

Just Before New Exemption Salary Thresholds Become Effective Under Federal Overtime Law, NY DOL Issues Proposed Changes to Its Own Exemptions

Are you a responsible, prepared employer who has already addressed the changes coming to federal overtime exemption rules on December 1, 2016? Have you thoroughly planned for these changes, and have now become bored and listless since your work is done? Are you searching for fresh overtime-based challenges? Well, search no more! The NY DOL has issued a complex new proposed rule that, if passed, will keep New York employers busy – and quite likely confused – for years to come!

Yes, that’s right. Just weeks before the federal overtime changes are set to go into effect on December 1st the New York Department of Labor has issued a proposed rule to significantly change New York’s salary thresholds for the administrative, professional and executive exemptions. The thresholds differ depending on the size and location of the employer.

Here is the breakdown:

For employees working for “large” employers (11 or more employees) in New York City:

  • $825.00 per week on and after December 31, 2016;
  • $975.00 per week on and after December 31, 2017;
  • $1,125.00 per week on and after December 31, 2018.

For employees working for “small” employers (fewer than 11 employees) in New York City:

  • $787.50 per week on and after December 31, 2016;
  • $900.00 per week on and after December 31, 2017;
  • $1,012.50 per week on and after December 31, 2018;
  • $1,125.00 per week on and after December 31, 2019.

For employees working in Nassau, Suffolk and Westchester Counties:

  • $750.00 per week on and after December 31, 2016;
  • $825.00 per week on and after December 31, 2017;
  • $900.00 per week on and after December 31, 2018;
  • $975.00 per week on and after December 31, 2019;
  • $1,050.00 per week on and after December 31, 2020;
  • $1,125.00 per week on and after December 31, 2021.

For upstate employees –i.e., those working anywhere other than New York City or Nassau, Suffolk, or Westchester County:

  • $727.50 per week on and after December 31, 2016;
  • $780.00 per week on and after December 31, 2017;
  • $832.00 per week on and after December 31, 2018;
  • $885.00 per week on and after December 31, 2019;
  • $937.50 per week on and after December 31, 2020.

 

These changes mean, among other things, that as of December 31, 2017 for large NYC employers and December 31, 2018 for small NYC employers, the threshold for the administrative, professional and executive exemptions under New York law — $975/week and $1,125.00/week, respectively — will be greater than the threshold under federal law at that time, $913/week. The federal thresholds may or may not catch up to the state thresholds on or about December 1, 2019, based on the automatic increase mechanism built into the rules. Specifically, the federal threshold will increase every three years as necessary to meet the 40th percentile of full-time salaried workers in the lowest-wage Census Region.

These changes also mean that businesses with employees in various parts of the state will be forced to apply different salary thresholds to different employees. For example, where two employees have the exact same duties and the exact same salary, one might be exempt and the other non-exempt because one works in, say, Westchester County and the other works in, say, Sullivan County.

The NY DOL has invited public comments on the proposed rule. Comments may be submitted until December 2, 2016.

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Portnoy, Messinger, Pearl & Associates, Inc. is here to answer any questions you have regarding the proposed rule and/or how the rule would interact with the new federal exemption thresholds. Please keep in mind that in addition to our staff of seasoned HR consultants, we also have a staff of experienced employment lawyers on hand to address any questions you may have regarding legal compliance.  Contact us at 800-921-2195 or 516-921-3400. You can also visit our website http://www.pmphr.com/ or e-mail us at info@pmpHR.com.

 



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Do Your Commissioned Salespersons Have Written Agreements?

The majority of employees in the United States do not have written employment agreements. Because employment agreements are not the norm, they often do not occur to employers as a possibility when hiring a new employee, let alone a requirement. With most employees, the lack of a written agreement is not an issue, except for one glaring exception:  commissioned salespersons.

Pursuant to New York labor law, New York employers must have a written agreement in place with each commissioned salesperson. This agreement must be signed by the employer and the employee, and must include a description of how all compensation will be earned and calculated, including any wages, salary, and commissions. If the terms of compensation include a recoverable draw, this must also be addressed in the agreement. For those not in-the-know:  A recoverable draw is a fixed amount advanced to an employee within a given time period. If the employee’s commissions during that period exceed the draw amount, the employee is then paid the difference. If the employee earns less in commissions than the draw amount, the employer can deduct the amount of the difference from the employee’s commissions in the next draw period. If such practices are part of the employer’s arrangement with the salesperson, they must be clearly explained in the written agreement, including the frequency with which the draw will be reconciled. The agreement should also detail how all forms of compensation will be calculated upon the employee’s termination or resignation.

In addition, it is vital that written commission agreements address the issue of when commissions are considered “earned.” Are they earned when the employee books the sale? When the client pays in full? How to define “earned” is up to you as the employer, but it should be clearly stated in the agreement. If the agreement is silent or ambiguous on this point, the employer runs the risk that a court reviewing the agreement will construe it against the employer.

The commission agreement is a good place to address other issues as well, such as at-will employment status and the obligation to adhere to the policies set forth in the company’s employee handbook. The agreement should also state whether the employee is exempt or non-exempt from overtime laws. Of course, before making this designation, the employer must educate itself on the applicable exemptions; many employers make the mistake of just assuming their salespersons are covered by the outside salesperson exemption without verifying that the exemption applies to each employee’s particular situation. The requirements for meeting the outside salesperson exemption are quite specific. The exemption applies only if the employee’s “primary duty” is making sales or obtaining orders or contracts for which a consideration will be paid by the client/customer, and the employee “customarily and regularly” works away from the employer’s place or places of business.

Employers should also consider including a non-solicitation covenant in agreements with salespersons, commissioned or otherwise. Because salespersons, by definition, are going to cultivate relationships with your company’s clients, they are well-positioned to poach clients when they leave the company. A well-drafted non-solicitation clause will restrict their ability to do so.

If entering into written agreements with each salesperson on your staff sounds like too much work, bear in mind that, without such an agreement, the Department of Labor will accept as true whatever terms the salesperson says were agreed upon. Thus, this is not a step any employer with commissioned sales staff should be skipping. For assistance in drafting compliant commission agreements, please contact an HR professional at PMP.

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Portnoy, Messinger, Pearl & Associates, Inc. is here to answer any questions you have regarding written agreements. Please keep in mind that in addition to our staff of seasoned HR consultants, we also have a staff of experienced employment lawyers on hand to address any questions you may have regarding compliance.  Contact us at 800-921-2195 or 516-921-3400. You can also visit our website http://www.pmphr.com/ or e-mail us at info@pmpHR.com.



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