Cultivating Cultural Positivity
A Challenging Opportunity for Employers

Steve Morris is a globally recognized leadership consultant, personal development coach, corporate workshop leader and author of Glorious Leadership! A Holistic Approach to Achieving Mastery and Work-Life Balance. The founder of Singapore-based Steve Morris & Associates, International Leadership Consultants, he is a former advisor for the U.S. Department of Defense. Steve has been quoted and featured widely in leading business columns and publications.

There is a call for cultural diversity in American corporations today. Whether this is a sincere call for diversity or simply a yield to appease public pressure, Human Resources managers are struggling to make cultural diversity a working reality. This can be attributed to several factors including the lack of diversity in senior management, a generally contemptuous attitude towards all things different, disregard for the knowledge and wisdom of minorities and the adversity of leaders to change the status quo. It is only when these problems are acknowledged and tackled universally that we will begin to see a genuine form of cultural diversity emerge.

The statistics on senior management in America today are overwhelmingly characteristic of one gender, one nationality, and one socio-economic class making senior management a club that leaves very little room for diversity within its ranks. It can be safely stated that the majority of senior management in American Corporation's today are white middle class males. Without diversity at the top there is no role model or leadership for diversity within the company as a whole. It is not until these top echelons of corporate management embrace and actualize diversity amongst their own ranks that the likelihood of it permeating through the organization will become a real possibility.

Whilst diversity throughout the organizations ranks is a necessity, cultural expansion (diversity) is more than just a quantity shift, it is a quality shift. There is a need to change the way we as organizations and people communicate, appreciate, relate and educate. Beyond work, it potentially affects the way we live and grow as individuals and communities. The present climate of our society breeds an indifference to things outside our own sphere of experience, in some cases even an aversion to things different. We need to work on changing this attitude at the grass roots level to achieve success on other levels.

In today's management paradigm when two cultures collide, one subsumes the other. The dominant culture holds the power and seeks to perpetuate itself. The minority culture is either swallowed up or forced out. There are only a few instances of hybrid cultures emerging and surviving after a merger or acquisition. Being a member of a minor culture you either conform to the norm or you get left behind, even forced out. The danger here is the loss of knowledge and wisdom that is disregarded by the dominant culture. This dominant culture continues to function (with all its faults) unchanged without the benefit of informed input from the other minority organization.

Another factor that challenges cultural diversity is not surprisingly, the central tendency within group behavior towards perpetuating its sameness. It requires leadership and effort to shift this inertia away from its status quo. Today's corporate leaders must learn to implement the vision of diversity and exhibit the commitment to make this happen. This requires courage and encouragement as the initiator becomes the minority and thus may be subject to being overpowered by the majority. What must be recognized is that for the leaders to fulfill this new role they will require the support of the professional people and organizational developers, a role traditionally filled by Human Resource professionals. Once there is support and understanding of what is trying to be achieved then action and change can occur.

Cultural conformity lowers leadership diversity
Culture is a set of beliefs and behaviors that distinguish one group from another. Often we hear of the clash of cultures when two companies merge or one company is acquired by another. It is less frequent that we hear of different cultures within the organization but the existence of subcultures is well known. Within an organization exist many sub-cultures, each with their own unique set of predominant beliefs and behavioral expectations.

With all of these cultural divides, each with their own predominant set of beliefs and mores, culturally varied populations such as black Americans, Hispanics and Asians are often found on the outside of the 'inner circle.' This is especially so in the case of minority representation in senior management. Perhaps it should be noted that white women would also be considered a minority when it comes to representation within the ranks of senior leadership.

Corporate leaders often state the reason for the lack of minority representation as due to the low levels of qualified or interested candidates. This itself is a chicken and egg situation that begins at lower levels of management. If future candidates are not in the lower strata then they cannot be in the upper strata – this too is a weak argument since external recruitment can overcome this limitation.

There is a supply constraint too – mostly based on cultural values. If we are looking for leadership potential from our American mainstream eyes we will likely pass over many non-mainstream candidates. For example, the typically Asian values of modesty, harmony, and humility may not attract attention to the Asian executive as a potential corporate leader. Asians as leaders may be seen as too accommodating (perhaps patience and harmony at work) or too risk-averse (perhaps respect for authority leading to waiting to be told what to do).

These minorities, not just Asians but African-Americans, Hispanics, women - all minorities, sit on the outside of the country club culture that seeds the top seats of America's corporations. As a result these minority groups feel like they have to espouse the same values of those in power if they are to fit into a workforce dominated by white middle class males. Women become like men, blacks become like whites, cultural uniqueness is lost and as a result we see evidence of corporate conformity.

Corporate conformity is not what I refer to when I encourage the need for cultural diversity. Cultural diversity is about embracing different attitudes and traits to form a more dynamic hybrid culture that results in exceptional leadership and as a direct result exceptional workplaces and productivity. It requires leaders at the top who embrace and champion diversity as well as organizational stewards who will help make it so. Only in this environment of cultural diversity can we expect to reap the rewards.

The call for diversity
There is a need for diversity not just of racial cultures, but social, political and even spiritual cultures. Clearly people are biased towards that with which they are familiar. This is human and we should not be ashamed of it. What is more important is that we break down the cultural barriers that exist between us and create an environment of trust, appreciation and acceptance. This is the ideal of cultural positivity. A major milestone on this journey is the broadening of cultural diversity within organizations.

Historically, the call for diversity did not arise from inside the organization but rather from outside forces such as Affirmative Action and special interest associations that put public pressure on organizations to widen their employment of minorities. These efforts have made considerable impact but have yet to reach the inner sanctum of where the power and influence that drives a corporation's culture emanates – the senior leadership team.

Corporate websites laud the virtues of cultural diversity and outline their programs but the truth of the matter is that the topmost ranks of corporate leadership are lacking in true diversity. This being the case, is it any wonder that cultural minorities feel pressured to conform to the white, male, middle class norm?

Consider 3M, which touts diversity as one of its core organizational values. As quoted from their corporate website they say…

Diversity is not just a "buzz" word at 3M… It is an important part of our world. As an international company, working with a diverse group of colleagues is part of the 3M experience.

3M even has a diversity vision…

To become a company that reflects the diversity of our global markets, building on each employee's capabilities through inclusive leadership, to achieve 100% customer satisfaction and accelerated growth.

Specifically, we want to:

• Support diversity in our workforce, so that we reflect the communities we serve by recruiting and retaining a diverse workforce.

• Support diversity and diverse perspectives within upper management and our operating initiatives, to capture new ideas and different viewpoints

• Support and mentor our under-represented groups

• Foster an inclusive and supportive environment

• Continue to hire superior talent from all different cultures and backgrounds.

These are indeed great intentions and I respect and admire the ideals behind them, but what about the reality of diversity at the top? A visit to 3M's corporate website (www.3m.com) will confirm that of the 16 top corporate officers there is only one woman and fifteen men, all of whom are white (one is of Iranian decent and another Swedish). There is not one person of the 16 that are of Asian, African or Hispanic decent.

The 3M Board projects a bit more diversity but not much more – having three of 11 board members as women, one black and one Hispanic. But here too, no members are of Asian decent despite the fact that Asians have the highest proportion of college graduates of any race or ethnic group in the country, and their rate of employment matches that of whites.

Other major American companies are sorely lacking in diversity at the top. I could have easily picked any company from the Dow Jones Industrials at random and gotten the same result. Consider just a few below:

• At GE, of the 27 top Business CEOs (prior to July 5, 2005 reorganization) there are two black males (7%), three white females (11%), and 22 white males (82%).

• At Pratt & Whitney, of the 20 top leadership positions, one is Indian, one is a woman, 18 are white males.

• At United Technologies Corporation, of the 58 top positions, one is Japanese, two are women, and 55 are white males.

• At Microsoft, of the top 111 positions there are 12 women (one black), 10 Indians and 89 white males.

The senior most leadership of America's top 10 companies of the Dow Jones Industrials is comprised of 91% men and 6% Asian, Black and Hispanics. If you take out Microsoft, the minority percentage plunges downward to 2%.

Only pharmaceutical giant, Merck, seems to buck the overall trend. Of the top 11 leaders at Merck, three are women, three are black males, one is an Egyptian male and only four white males. We can get a glimpse of why this might be so in reading their leadership credo regarding diversity:

To be an effective leader at Merck is to value, promote and develop ways to reap the benefits of diversity in our workforce.

While other companies talk about promoting cultural diversity, Merck is succeeding in doing so all the way to the top. The key to success is in shaping diversity into the top leadership team, the rest follows naturally.

While there is some evidence of diversity within Boards of Director, Board members are often chosen from outside and not grown from within. Some could even argue that Board members have been selected to represent or portray diversity to shareholders. The real test of diversity of an organization's leadership is evident in its top executive positions – CEOs and Corporate Executives. This is where strategy is forged and made into daily decisions. It is the locus of power and authority within the operational entity.

The role of people and organizational developers
Our goal as stewards of the future organization is to nurture cultural positivity. We can do this through increasing cultural awareness, appreciation and sensitivity. Here are 10 things that People and Organizational Builders (i.e., HR managers) can do right away to expedite the shift towards cultural positivity:

1. Craft a statement of intent regarding diversity and cultural positivity. Make sure that it is co-created with the top leadership team. Post it publicly. It is okay to have a gap between where you want to be and where you are, provided that you are moving towards the ideal and not away from it.

2. Facilitate dialogues around values, and aspirations to help bring ideals into alignment. Focus on finding the different interpretations that exist rather than rushing towards convergence.

3. Refrain from using culturally biased competencies in leadership development models – initiative and risk-taking have very different boundaries across different cultures. To suggest a single, dominant style perpetuates the dominant culture.

4. Fill for talent – not for quota. If you don’t have enough of a talent pool to select emerging leaders, then grow the pool. This means actively recruiting more diverse candidates for their leadership potential. Also, provide training and developmental opportunities augmented with personal leadership coaching. Leaders are grown, not born. They are fashioned from the experiences and environments from which they arise. To shape a future leader, you should be aware of the external forces.

5. Provide mentors cross culturally – this will help both senior leadership better relate to and understand people of other cultures as well as provide an experienced guide. Simply assigning a mentor is not enough – the mentoring relationship must be active. Senior leaders are not always comfortable with mentoring and may not have the skills or the motivation. Monitor the mentoring relationship and provide training to both mentors and mentees as to what to expect and how to go about mentoring.

6. Hold leadership accountable for harnessing diversity and cultural positivity. In the world of organizations, what gets measured get done. Build it into a performance metric and review it.

7. Take a culture inventory – what are your company's demographics? How many different nationalities, cultures, ethnic groups are represented? Publish the results. Post changes and updates to show your workforce that you are making progress consistent with your statement of intent.

8. Circulate notices/news/videos of other international offices – profile them in the company newsletter. Let Iowa know what's happening in Indonesia and vice versa – focus on the people elements and not so much the business performance.

9. Encourage leaders to prepare and present a cultural profile of their people. One of my clients takes with him a PowerPoint presentation introducing his diverse team and their local environment. He plays this as a scene-setter before his main presentation.

10. Use Cultural Positivity Meeting Icebreakers – have meeting participants introduce themselves as a descendant of their particular cultural group(s); share experiences from 'the old country'; relate stories of parents' or grandparent's challenges.

Editor’s Note: For those interested reaching Steve Morris and learning about his international leadership consulting and personal and organizational development coaching, contact the Employers Group Editor

By Max Maximon Young, Senior Claims Representative

Employers may now be in receipt of a “Notice of Potential Increased Liability for Training Extension Benefits,” which offers California Training Benefits to claimants (generally former employees), also known as the “CTB Program”.

Claimants may be eligible to participate in this program upon exhaustion of their 26 weeks of unemployment. If found eligible to participate they can receive up to an additional 26 weeks of unemployment benefits while they are enrolled in an approved training program. See California Unemployment Insurance Code (CUIC) section 1271.

The purpose of the program is to allow individuals eligible for unemployment insurance (UI) benefits who lack competitive job skills to receive continued UI benefits while attending an approved training or retraining program. Individuals approved for the CTB training or retraining do not have to be subjected to the following requirements:

• Actively seeking work,
• Be able and available for work,
• Accept suitable work.

Participants are also not subject to disqualification for leaving work if working prevents them from completing the training.

There are two types of CTB approved training. To be eligible under CUIC section 1269 (a) or (b) or (c) the former employee must be approved in one of the following programs:

• Workforce Investment Act (WIA) Funded Program
• Employment Training Panel (ETP) Funded Program
• Trade Readjustment Act (TRA) Funded Program
• California Work Opportunity and Responsibility to Kids (CalWORKs) training contracts

The other type of CTB-approved training is for individuals who secure their own training on their own behalf and meet the following criteria under CUIC section 1269(d):

1. Be out of work for four or more continuous weeks or unlikely to return to their usual occupation due to a plant closure, a mass layoff, technology changes or have a physical mental disability the would prevent use of existing job skills.

2. There must be a lack of demand for their skills in the local labor market.

3. There must be a demand for the occupation for which they will be trained in.

4. They must complete the training course within one year, including scheduled breaks and vacation periods.

5. The training must be full-time as defined by the school and EDD (EDD defines fulltime as not less than 20 hours per week, or 12 units per semester or quarter.)

What this potential charge means for employers
Training benefits for former employees may increase charges to the employer’s reserve account. If a former employee is eligible to participate in the CTB Program, the base period employer may be subject to double the amount of the claim. The employer will receive a DE 1545TE base period form - Notice of Potential Increased Liability for Training Extension Benefits. The form will indicate the maximum amount of unemployment benefits, including the training extension benefits. The form provides the option to protest the charges within 15 days of the mailing date.

It is important to understand that the DE 1545TE shows potential charges. These charges are charged to the employer’s reserve account in the same manner as a regular unemployment claim. The former employee may or may not participate in the training program. When the DE 1545TE is issued, it is not written in stone that the employer will actually be charged for the retraining benefits. If you look closely at the claim you will see they use the word “may” be charged or the employee “may” be eligible. If the tax rated employer received a favorable ruling on a previous claim, the employer would not be subject to a charge for the retraining benefits. The form DE 1545TE should indicate if a favorable ruling was issued or not. An individual who is not entitled for unemployment benefits does not meet the qualification for the retraining program.

Employers should do all they can in protesting charges against their reserve account and providing good supporting documentation to the Employment Development Department, such as: resignation letters with the reason the employee is quitting, exit questionnaires, facts on the last incident leading up to a discharge, written warnings, etc. It is to the employer’s benefit if they respond timely to EDD calls regarding former employees.

In addition employers should also audit their statement of charges, form DE428T. Employers who use an unemployment insurance service should immediately send the DE428T to their agent. Employers have 60 days to protest unwarranted charges for the following reasons:
• Never received a claim
• Never received a decision from a timely protest
• Received a favorable decision
• Clerical error such as wrong account number or social security number.

The Value of Integrated Benefits and IDM

Diana B. Henderson is founder and president of The Henderson Group, a workers’ compensation and disability management consulting and training firm in Newport Beach. With more than 25 years hands-on experience, she has worked in both the corporate and service provider communities.

Employee benefits were established to meet the needs of both the employer and employee. Employers, both large and small, view benefits as a solution to:

• Attracting good talent
• Increasing employee productivity
• Increasing employee morale
• Reducing employee turnover

On the other hand, employees view employee benefits as an integral part of their compensation package. Benefits are no longer thought of as a luxury but more of an entitlement. When negotiating with a future employer, individuals quite often look at both the cash compensation and non-compensation components of a package. It’s important to note that it is difficult to attach a monetary value to a truly outstanding non-cash compensation package. Most employees would be truly amazed if they really knew how much their benefits cost. It is estimated that employers spend an additional 35-40% of an employee’s base salary on benefits.

It is critical that employees and employers understand the coordination of these benefits. For employees, it is knowing what benefits they are entitled to and how to obtain them. For employers, it is knowing how to coordinate benefits while facilitating return-to-work to mitigate the costs overall.

Integrated disability management
Integrated disability management or IDM is a strategy that an employer may choose to adopt to help reduce the overall cost of disability. By way of definition, IDM is a coordinated approach to administration, management information, managed medical and disability services, claim payment, and communication of all benefits available to employees.

According to a survey conducted by the Integrated Benefits Institute in 2000, four out of five employers with 10,000 or more employees were investigating or implementing such programs. IDM programs often use case management when combining workers’ compensation, short-term disability and long-term disability claims to encourage return-to-work, no matter how the injury occurred.

To an injured worker, the fragmentation of disability benefits that normally occurs at their employer looks and feels like a giant maze with no end or puzzle where the pieces do not seem to fit together. This concept becomes a reality when answers to questions are not easily found and there are numerous claim forms to fill out.

Common integrated programs
The most common type of integrated program involves managing disability and absence across non-occupational benefits (for example, short-term disability and Family and Medical Leave Act) and occupational benefits (i.e., workers’ compensation) in an integrated disability management program. Employers often include some form of medical management in their programs, and sometimes involve group health plans as integrated benefits partners.

There are other types of integrated programs, such as coordinating delivery of medical and disability programs for injuries off the job or focusing on a program where STD benefits are managed so they are less likely to become long-term disability issues.

FMLA is another area that is gaining increased attention. If FMLA eligibility is not tracked, employers are concerned they will extend their liability to offer FMLA entitlement unnecessarily.

The goal of integration
What can an employer achieve from integration? With businesses facing the challenges of keeping costs down and improving productivity, risk managers and human resources managers are under pressure to demonstrate their contributions to the bottom line of their organizations.

Insurance costs and benefits costs are increasing and managed care falls short of meeting the needs of employers and employees. Likewise, reducing benefits or cost shifting will not help meet a goal of retention and attraction of a skilled and trained workforce. Thus, integrating delivery of employee health, disability and absence benefits seems to be a way of meeting these conflicting goals.

Employer size
Employer size does matter relative to the type of integrated program and the goals hoped to be achieved. How an employer is organized internally will often dictate. Smaller employers are looking for cheaper coverage, lower benefit costs, administrative ease and keeping employees on the job. Small employers cannot cover absent employee’s duties with temporary help or overtime as easily as a large employer. Their definition of integration is to utilize a single vendor or partnership of vendors.

Larger employers, too, are looking to minimize the cost of absence including the effects of lost time on productivity and the bottom line. Their goal of integration is to enhance their benefits tracking systems and provide easy access to benefits for their employees. Many define integration as disability management and return-to-work for all injuries, regardless of cause.

Mid-sized employers share many of the same characteristics of both large and small employers. Their focus is to seek to control lost days and unnecessary absence. Their definition of integration is to have an employee-centered approach to the benefits delivery system through common intakes and return-to-work programs.

Getting started
For most employers, the hardest part of integration is getting started. There is often limited data with which to make the case for integration. In addition, internal turf constraints and organization structure can be an impediment.

There are a variety ways to overcome the challenges. Sometimes current vendors can bring the solution through computer system applications. The use of a pilot program can test integration initiatives and the results can provide missing information and suggestions for a broader application. Merely consolidating claims management best-practice functions from each benefit program into an independent or co-managed central case management unit can allow existing silos to continue to perform their current functions. Using a single point of contact for reporting claims relieves supervisors and allows case managers to assist employees, physicians and supervisors in the area of getting healthy and return-to-work.

Savings
Savings can come from managing disability and absence and getting workers back on the job sooner thereby increasing productivity and lowering indemnity costs. A single system of administration eliminates duplication of efforts and allows for resources to be utilized more effectively.

Finally, while there may be savings from integration over time, promising significant savings going in may be risky as few employers can document their baseline costs. Promising enhanced employee satisfaction and improved healthcare goals is less risky and far more achievable in the short term and can be the building block for continued integration initiatives.

(Editor’s Note: For more information on integrated benefits and IDM programs, contact
lhollis@employersgroup.com.)

By Mimi N. Mericle, SPHR, Helpline Consultant

An “alternative workweek schedule” (AWS) is a regularly scheduled workweek that requires an employee to work more than eight (8) hours in the 24-hour workday. Properly instituted (see California Wage Orders for implementation procedures), employers can establish an AWS to better meet operational requirements and/or give employees greater flexibility than the conventional work schedule of eight hours per day, five days per week, without paying overtime for hours worked beyond eight in a day.

An AWS, however, does not eliminate daily overtime pay. Since an AWS’ overtime pay requirements are quite different than the general rules that apply to a standard five-day, 40-hour workweek, employers must know the AWS overtime zones in order to schedule shifts (employees’ designated work hours) in a cost effective manner and also to ensure workers are properly paid.

Overtime pay is triggered by any work the employer requires outside of the established AWS. In other words, work performed beyond the regularly scheduled daily hours or regularly scheduled workdays will result in overtime pay. The overtime zones are listed below and the examples are based on a “four-ten” schedule, which consists of four 10-hour shifts during the workweek for a total of 40 hours.

Time and one-half
1) Hours in excess of the regular schedule per day, through 12. Using a four-ten AWS, time and one-half would be due for work which begins after the 10th hour and continues up to the 12th hour.

2) The first eight hours of work on a day outside the regular schedule. For instance, if the AWS establishes the regular workdays as Monday through Thursday, an employee’s rate of pay will be time and one-half for the first eight hours of work performed on the days which fall outside of the regular schedule – Friday, Saturday and Sunday.

3) Hours in excess of 40 per week.

Double time
1) Hours in excess of 12 on a regularly scheduled workday. Based on the above example, this would be Monday through Thursday.

2) Hours in excess of eight on a day outside the regularly scheduled workdays. In continuing with the example, this would be Friday through Sunday.

Additionally, the Wage Orders create a penalty that could apply when an employer requires an employee to work fewer hours than specified in the AWS agreement. In such a case, the general daily overtime rules take effect: 1) time and one-half after eight hours (instead of after 10, the number of regularly scheduled hours); and 2) double time after 12 hours.

The makeup time provisions of the Wage Orders may be utilized in an AWS. To clarify, this means when an employee requests to make up work that is or would be lost because of a personal obligation, the makeup work will not incur overtime pay if the following conditions are met: 1) the makeup work is performed in the same workweek as the missed work; and 2) the number of hours of the regular shift plus the makeup time do not exceed 11 hours in one (1) workday or 40 hours in the workweek.

Lastly, as with a conventional work schedule, paid time off such as sick, vacation and holiday pay need not count toward overtime since they are not hours worked. A company can, however, apply paid time off toward overtime, if it so wishes.

Please call the Employers Group Helpline for answers to your AWS, overtime and other wage and hour questions.

Why Safety Incentive Programs Work

Joe Stevens, President of Bridge Consultants, Inc., specializes in safety incentive programs and other services to help employers reduce the high cost of workers’ compensation in California. Bridge Consultants’ record of claim reduction averages 55% for all their clients.

One of the most challenging tasks for any company is getting the message to employees that they are appreciated. It is easier in the management offices, because face-to-face sessions are possible. But what about the ones who perform the most physically demanding jobs? How do you let them know you appreciate their efforts? The problem is exacerbated when the primary language of the workforce is not English, as is often the case in California.

The answer is having great safety incentive program. When designed and delivered correctly, the program encourages the one area that your employees can absolutely impact: their safety. Done right, it conveys a message that you care about their safety and appreciate their efforts to stay safe. It also lets them know that injuries due to carelessness will be noticed.

There is no better way to let your employees know that you pay attention to them, that you care about their well being, and you appreciate the fact that they may have difficult jobs. Here are some ideas for making a safety incentive program effective:

• Don’t rely on games or gimmicks. They don’t address what should be conveyed as your primary goal—safety. On some level, employees know they are gimmicks, and that they are more about claims than injuries and safety.
• Make the awards meaningful. Pizza doesn’t change behavior. You create positive peer pressure when you offer a real incentive.
• Put people on teams by department, with people they know. Put positive peer pressure to work for you.
• Make your meetings a blast! They should be fun and memorable so your employees look forward to them. Morale plays a big role in safety.
• Balance the appreciation with the other key ingredient that all good companies have: Accountability. Before any awards are made, discuss every injury and how it could have been prevented. This is the right forum to do that.

Accountability and appreciation
Successful safety incentive programs are built on the foundation of appreciation and accountability, the same two qualities that great companies spend a fortune trying to create. When your employees know you care about them, and see it demonstrated every month, the message gets through.

The best programs are designed to offer your employees the opportunity—not a guarantee—to win at least one significant award every month. Programs should be designed so that 10-15% of the workforce wins something every month. Over the course of a year, every employee who has been safe will be a winner. It is not recommended that the same programs be extended to the clerical staff, because we want to convey the message that we recognize that some workers have much more difficult and physically demanding jobs. A program with smaller rewards can be incorporated for administrative staff.

Accountability comes from discussing the injuries every month, and asking the group how they could have been avoided. Carelessness and fraud have no hiding place when injuries are discussed in an open forum. No accusations, no recriminations, just a discussion with the goal of teaching in the best possible environment. Watch your fraudulent claims virtually disappear.

Visibility
The safety incentive program should serve as the engine to your safety initiative. Take advantage of your employees’ interests to motivate them in other ways. Take pictures at your meetings, especially of smiling faces, then post those pictures where everyone can see them. List the award winners on a large sign or safety board. We all like to see our name in lights. And remember that your program is an incentive—a carrot, not a stick. Be sure to list prominently what the awards will be for the next month if there are no injuries or claims.

Now, just when you think you have it solved, I am going to suggest something else—change it! That’s right, change it from time to time to keep it interesting. Don’t give the same awards every month. Use cash one month, prizes the next. If you have a bad month, take it as a sign to change the awards. And, here is a key point, if you are doing very well, enhance the awards with extras to keep the momentum going. Anything you add will be noticed and appreciated, especially when you tell them it is being added because they are doing so well.

Finally, get top management involved. If the CEO makes the effort to be present and hand out the prizes, it makes a statement that safety is important to everyone. No other program has the potential to boost your employees’ morale, while making your company safer and healthier at the same time. Do it right, and it will be one of the most valuable contributions you can make to your company.

Editor’s Note: For information about the services provided by Bridge Consultants, contact lhollis@employersgroup.com.

By Wendy Taylor, Editor and Legislative Coordinator

The Legislature passed 961 bills in 2005. Of these, Governor Schwarzenegger signed 729 bills and vetoed 232 bills. The Governor continues to present himself as someone in between the traditional definitions of Republican or Democrat. On business issues, he was consistent in his protection of the employer community—vetoing all but one of the so-called “job killer” bills.

Signed Bills
His one exception among the “job killer bills” was signing the bill prohibiting the sending of “junk faxes” – unsolicited advertising—in California.

• SB 833 (Bowen) – Junk fax bill
This bill means that California businesses will need to obtain written consent from their own members or customers prior to sending certain fax communications. The Federal Fax Prevention Act of 2005 also restricts so-called “junk faxes,” but maintains an exemption for existing business relationships. SB 833 does not provide for this exemption, and thus, it intrudes on legitimate business communications between employers and their customers.

Also signed, but not on the Job Killer list

• AB 1093 (Matthews) – Employment wages
This bill provides that the employer may deposit the wages or advance on wages in an account in any bank, savings and loan association, or credit union of the employee's choice that has a place of business in this state. It also provides that if an employee is discharged or quits, the employer may pay the wages earned and unpaid at the time by depositing that sum into the account authorized by the employee.

Vetoed Bills
For the most part, the vetoed bills fit into three general categories: minimum wage, pay enforcement and insurance benefits.

Minimum Wage bills

• AB 48 (Lieber) Minimum wage increase
This minimum wage increase bill contained a CPI inflation factor. Although he did not sign the bill, the Governor indicated he would sign a minimum wage increase bill without an automatic consumer price index, but wanted in exchange some more "flexibility" in overtime laws. He said, in part: “…It is essential to those working at or near the minimum wage that the adequacy of the wage is reviewed on a regular basis and raised when appropriate. The minimum wage has not been increased since 2002, and I believe it is now appropriate. This is a position I made very clear to the author. However, I have also made it clear that I do not support automatic increases to the wage that relieve elected officials of their duty to consider all of the impacts each increase to the wage will have on workers and businesses….”

• SB 174 (Dunn) – Minimum wage: violations
This bill would have provided for a private right of action for minimum wage violations. The Governor indicated, in part, “….This bill creates a new kind of class action lawsuit with no protections contained in the Code of Civil Procedure which governs traditional class action lawsuits… This bill will undoubtedly lead to increased litigation and could result in the same sorts of ‘shakedown’ lawsuits that the citizens of California voted to curb last year by passing Proposition 64….”

Pay Enforcement (gender)

• AB 169 (Oropeza) – Gender pay equity
This bill would have increased damages in gender equity complaints. The Governor said, in part, that “…I remain supportive of reasonable efforts to eradicate the historical trend of women earning less than men for doing the same work, however I still do not believe the provisions of this bill… are necessary …to achieve this goal. Current state and federal laws forbid paying an individual lower wages on account of gender and provide stiff civil and criminal penalties against employers that do so. The elimination of judicial discretion to modify the penalty coupled with the massive increases in fines will do nothing more than increase frivolous litigation and could lead to the same ‘shakedown’ lawsuits that the citizens of California voted to curb last year by passing Proposition 64.”

• AB 391 (Koretz) – Unemployment benefits: locked-out workers.
This bill would have permitted locked-out union workers to receive unemployment benefits. In his veto message, the Governor indicated, in part, “….Unemployment benefits are predicated on the principle that workers should receive assistance when they have lost their job through no fault of their own.…Current unemployment insurance law already protects workers from lock-outs called by an employer when there is no strike notice. Essentially, this bill will require that businesses subsidize the strike actions of their workers. Unemployment benefits must be maintained for workers who lose their job through no fault of their own.”

• AB 875 (Koretz) – Employee wages and working hours: violators.
This bill would have required a list of standards to be set that would trigger wage and hour audits. In his veto message, the Governor said, in part, “…This bill calls for the development of an unnecessary set of standards. The Labor and Workforce Development Agency already has the authority to coordinate enforcement efforts related to the underground economy. Additionally, this bill is duplicative of efforts currently underway by the Economic and Employment Enforcement Coalition, an inter-agency task forced focused on enforcement activities. This year’s budget includes $6.5 million and 62 personnel years for coordinated enforcement of the underground economy by these entities. The state funds spent developing the standards called for in this bill would be better spent actually enforcing existing laws.”

Insurance Benefits

• AB 89 (Horton, Jerome) – Health care: employer coverage: disclosure.
This bill would have required employers to report to the State any employees who qualify for low-income health care services. In his veto message, the Governor indicated, in part, “… Although I share the Legislature's interest in exploring ways to provide health coverage to the uninsured, I have doubts that this report would provide useful information. The report would not account for the complex and multi-faceted decision-making process that employees and employers consider when choosing health insurance options or differentiate between part-time, seasonal and full-time workers …”

• AB 1310 (Nunez) – Severance offers: disclosures for larger companies.
This bill would have required employers to provide 21 days (vs. current 7 days) for an employee to accept or reject a severance agreement, and required a lengthy financial analysis done by the employer. The Governor’s veto comments include “…This measure prohibits large employers from offering severance packages unless the employer provides the employee extremely detailed financial disclosure information and a lengthy rescission period. …[it] does little more than require employees to disclose personal financial information to employers and encourage employers to discontinue offering severance…”

• AB 1698 (Nunez) – Health care coverage age increase.
This bill would have required health care plans to provide dependent coverage for persons up to age 26 instead of age 21. In his veto message, the Governor said, in part, “…I believe in providing access to affordable health insurance, however, mandating employers such as school districts and small businesses to include coverage for dependents up to the age of 26, when current dependent coverage is typically to age 19 or 24 if the dependent is in college, will impose additional costs on employers at a time when many are struggling to afford the rising costs of health care….”

The Legislature will reconvene on January 4th for the second half of the two-year legislative session.

UPS’s Safety-of-Others Defense

By Jim Kuns, J.D., Senior EG Consultant

Some of United Parcel Service (UPS) employees were denied driving jobs when they failed a UPS vision test. The employees filed suit in the complex case claiming in part that the company discriminated against their visual disability in violation of California’s Fair Employment and Housing Act (FEHA). The court found, among other things, that some of the employees were disabled under FEHA; but UPS was able to avoid some liability by using FEHA’s safety-of-others defense; see EEOC v. UPS, 9th Circuit Court of Appeals (2005).

Prior to 1988, the federal Department of Transportation (DOT) regulations barred drivers who had Monocular vision. Monocular vision usually causes a decrease in peripheral vision. On average, a monocular person has a field of view that is 10 to 40 degrees less than the field of view of an average binocular individual. The DOT changed their rules by 1995, so that lightweight commercial vehicles were not covered by federal regulations. Then, persons with monocular vision were permitted to drive the lighter vehicles that weighed no more than 10,000 pounds.

UPS employs nearly 70,000 drivers that pick up and deliver packages. Most of UPS’s vehicles weigh more than 10,000 pounds and are subject to the DOT regulations. The employees with monocular vision seek to drive the lighter trucks, which amount to 5,511 out of UPS’s 67,178 vehicles.

In 1995 UPS established its own vision policy, “Vision Protocol,” which permitted some vision impaired persons to drive. The policy is less restrictive than the federal DOT regulations.

DOT’s regulations require 20/40 vision with peripheral vision of 70 degrees in each eye. UPS’s policy requires: 20/40 (corrected or uncorrected) in the better eye; 20/200 (corrected or uncorrected) in the affected eye; peripheral vision of 70 degrees in each eye or a combined horizontal visual field of 140 degrees; and peripheral acuity of at least 20/200 in each eye.

The lower district court determined that “the literature generally supports the proposition that monocular drivers as a whole are involved in more accidents than others as a whole … [but] not dramatically more.” The district court conceded that peripheral vision is important in avoiding accidents and that the monocular driver is not able to see a child or any other pedestrian or cyclist or car darting from the impaired side as well as a binocular driver.

The appeals court found that monocular vision impairment could be a disability covered by the FEHA. But the court also determined that “FEHA does not prohibit an employer from refusing to hire or discharging an employee ... where the employee, because of his or her ... disability ... cannot perform [the job's essential] duties in a manner that would not endanger ... the health or safety of others even with reasonable accommodations … Cal. Gov't Code §12940(a)(1). … This aspect of the statute has been expressed in the FEHC's regulations (and in the Commission's decisions) as the safety-of-others defense: It is a permissible defense for an employer or other covered entity to demonstrate that after reasonable accommodation has been made, the applicant or employee cannot perform the essential functions of the position in question in a manner that would not endanger the health or safety of others to a greater extent than if an individual without a disability performed the job.”

The court noted that not all vision protocols (policies) would be approved. However, because the “UPS Vision Protocol rests on objective and statistical evidence that monocular drivers are involved in somewhat more accidents than binocular drivers, because the risk of harm to others is high, because the UPS standard does not categorically exclude monocular individuals from working as full-time package car drivers, and because the application of the Protocol is individualized to each employee or applicant, we are persuaded that UPS must prevail on its safety-of-others defense.”

This case is a very complex one, and we have only touched on a portion of it in this short article. Employers should seek legal counsel if they intend to exclude employees from jobs under similar circumstances.

Save Yourself—and Your Company—with an Employee Handbook

BethAnn Whittenberg, PHR
Employers Group HR Generalist

It is Monday morning and while walking through the office you notice one of your employees surfing the internet. On Tuesday you caught an employee assigned to a crucial project downloading hacker software onto his work computer. What is your first instinct…document, discipline and start managing those employees out. You take all this information to your company HR person and realize nothing in your employee handbook states that these behaviors are against company policy. Better luck next time.

Or does it really need to be that way? One of the most often overlooked, but most important aspects of managing employees is providing them with a suitable employee handbook. The time and money invested on the front end saves countless hours and thousands of dollars in lost wages or attorney fees down the line.

Employee handbooks are a necessary communication tool used to convey information to employees about the company’s rules, regulations; they also contain a summary of the company’s benefit plans, and what is considered acceptable and unacceptable behavior and the standards of disciplinary action. But more than that, employee handbooks are the basis for protecting companies from violations of employment law and lawsuits arising from unclear business practices.

Where to begin
Before diving into an undertaking of this magnitude, there are certain things to consider.

First, does the company have internal resources available to document the company rules and regulations? Is that person(s) aware of the local, state and federal laws that impact some of those rules and regulations. Finally, if the company does not have the resources available, is there an option to consider outsourcing to a firm specializing in producing handbooks. These companies employ experts in employment law and HR guidelines to ensure that what is documented is both clearly defined and within the parameters of the law.
Think about this, do you think that FMLA and Pregnancy Leave have the same parameters? Where they differ is FMLA is only available to employees that have been with your company for a year or longer (among other parameters); pregnancy leave is available to them from day one.

Second, how are you going to distribute the handbook? Will you be using hard copy, soft copy or even posting it to the company intranet? If so, how will you ensure that not only has the employee read the document, but how can you prove that they were aware of those policies if ever confronted with a potential lawsuit. Many companies find that posting to the company intranet is an acceptable measure for distributing the employee handbook, but doing it this way means not having a physical copy of the employee’s signature showing receipt—which is a good thing to have.

Third, who will own the handbook internally and be responsible for making revisions? That person needs to have strong communication and organization skills in order to stay abreast of the changes within the organization. As the company grows and new policies are developed, the employee hand book not only has to be updated, but it also has to be redistributed to each employee and receive an updated signature.

Finally the document should contain not only what the management team wishes to convey to the employees, but what is required by law to be conveyed. The document has to provide details about any commission or bonus plans, in addition to the company’s position on overtime and paid time off.

Putting it together and providing training
The above is just a sampling of all the critical items necessary to consider when you begin developing your employee handbook. For most companies this is a major undertaking and the development team should incorporate members of the entire management team, as their individual departments will be impacted by the agreed upon procedures. In addition, any manager that has authority over employees must receive the proper training on the company’s policies and procedures set forth within the handbook. During implementation the employees will undoubtedly have questions about the policies and since the management team is on the front line with them, they will need to be able to provide clear and concise answers.

Once you have started writing the company handbook, stay focused on the purpose. Make sure that the policies and guidelines are geared towards your employees; use concise and straightforward language. Keep the information to basic company policies and general expectations of employees. Once that is all considered, that employee who was surfing the internet may think twice about doing it again between 8am and 5pm.

(Editor’s Note: For help in producing handbooks, contact Leslie Hollis, Vice President of EG’s Consulting Services at 714.545.5017 or email lhollis@employersgroup.com

5 Reasons Why Employers Must Comply with AB 1825

By P. Anthony (Tony) Burnham
Executive Vice President and Employment Counsel

The following information should help clarify why California businesses need to comply with AB 1825 and provide harassment training before the year is up.

1) Punitive damages available: If a harassment suit is filed and proven in court and training in compliance with AB 1825 was not conducted it could effectively be argued that the plaintiff is entitled to punitive or exemplary damages—which is in addition to compensatory or actual damages and plaintiff's attorney's fees;

2) Avoidable consequences defense not available: If a harassment suit is filed and proven in court and training in compliance with AB 1825 was not conducted, it could preclude the employer from effectively arguing it had discharged its established legal duties to prevent, investigate and correct unlawful harassment in its workplace—and thus lose the opportunity to reduce the amount of monetary damages recoverable by the plaintiff in the suit:

3) Insurance coverage lost: If a harassment suit is filed and proven in court and training in compliance with AB 1825 was not conducted, Employment Practices Liability and other forms of insurance coverage, both for the employer and its directors/officers, could be lost because the failure to comply with the statute would likely be interpreted by carriers as an intentional act and, therefore, outside the scope of the protection of their policies;

4) Personal liability for decision maker(s): If a harassment suit is filed and proven in court and training in compliance with AB 1825 was not conducted, the decision maker(s) responsible for not approving the training could be held personally liable for any damages sustained by their employer for their intentional failure to comply with the well publicized training law as well as, in most cases, their employers own Non Discrimination/Harassment Policies; and,

5) Benefits of non-discrimination/harassment policies lost: Having Non-Discrimination/Harassment Policies and not effectively communicating them to supervisors and employees is like having fire extinguishers in a workplace that no one in the building knows how to operate. The common purpose for having both the policies and the extinguishers is to minimize the risk of damages a business sustains from either discrimination/harassment claims or fires. Not to train employees on the use of these protections is to clearly defeat their purpose and would subject those who don't approve such training to justified criticism if those damages were to occur.

What California Law says about employers providing training to prevent sexual harassment

• Section 12950.1 of the California Government Code requires: By January 1, 2006, an employer having 50 or more employees shall provide at least two hours of classroom or other effective interactive training and education regarding sexual harassment to all supervisory employees who are employed as of July 1, 2005, and to all new supervisory employees within six months of their assumption of a supervisory position.

• In State Dept. of Health Services v. Superior Court, 2003 (McGinnis) the California Supreme Court said: ... in a FEHA action against an employer for hostile environment sexual harassment by a supervisor, an employer may plead and prove a defense [to damages] based on the avoidable consequences doctrine. In this particular context, the defense has three elements: (1) the employer took reasonable steps to prevent and correct workplace sexual harassment [training]; (2) the employee unreasonably failed to use the preventive and corrective measures that the employer provided; and (3) reasonable use of the employer's procedures would have prevented at least some of the harm that the employee suffered.

Educational Reimbursement Practices Helpful Plan Guidelines

By Juan Garcia, Director of Research Services

Any time you establish or update your company’s tuition reimbursement program, you will need to benchmark your program against current industry practices and trends. Questions, such as how much to pay, when to pay, what time-off policies and reimbursement requirements, must be carefully considered, while answers should be addressed from not only a financial perspective, but also a practical one; i.e., what makes sense to your company?

Designing a thorough and well thought-out plan is critical: It can help your organization achieve maximum results without wasteful spending, as well as assisting your employees in meeting their long-term educational needs; this, in turn, will result in higher quality employees.

According to a June 2005 survey, while almost two-thirds of firms have a formal educational reimbursement plan, 12 percent of companies do not. If you are one of these firms, or if your plan has not been updated within the last few years, here are some top-line summary results to help you design a basic plan. This information is based on data from 250 California companies that responded to a June benefits and policies survey we conducted among EG’s 4,000 member base.

As to a waiting period, three out of every five companies require at least three months of employment before an employee is eligible to participate in the program, while one in every five requires employees to wait an entire year before they are eligible.

How to calculate the actual reimbursement amount varies considerably and depends on a company’s size and industry. Typically about 66 percent of companies reimburse up to 100 percent of all tuition costs depending upon the grade the employee receives. For example, an employee can receive 100 percent reimbursement if they earn an “A”, 80 percent for a “B” and 70 percent for a “C”.

A reimbursement cap is a popular method to control costs: almost 80 percent limit the total reimbursement to about $3,200 -- $600 more since 2003 when this survey was last conducted and $1,000 more since 2000.

This latest survey also found that more companies are willing to reimburse employees for non job-related courses. In 2003, 75 percent of companies paid for only job-related courses whereas, in 2005, that figure dropped 10 percent points to 65 percent. A possible explanation for this drop may be that more companies are betting that by increasing their employee-friendly benefit package their retention rate of quality employees will increase as well.

Employee retention and training costs are problems being faced by the employer community. According to Wilson Beach, Chairman of Abigail Abbott Staffing Services, the average length of employment is only 2.6 years. By offering non job-related courses employers are offering more incentives for an employee to stay longer with that particular company.

As with any survey summary, the above information represents overall figures and readers should use caution when applying them as considerable differences were found between the different industry groups and organization sizes participating in the survey. For example, manufacturing and large-size firms tend to have more employee-oriented policies than other industries or smaller firms.

If your firm does not have a plan or if the plan has not been updated in more than four years, we recommend that you contact us to obtain the full report. The report was released to all participants in October; Non-participants may purchase the report by contacting Research Services at 213-765-3920 or at surveys@employersgroup.com.