Career Contentment
The True Measure of a Best Place to Work

By Jeff Garton

(Editor’s note: Last month, Employers Group announced the 2007 winners of the first-ever California-specific program to name “California’s Best Places to Work.” Here, author Jeff Garton provides further insight about how employers can be perceived as “best” by their employees.)

Every employer offers job satisfaction, but due to years of cost-cutting, layoffs, and uncertain job markets, employees are less swayed by satisfactions that are here today, but could be gone tomorrow. The true measure of a best place to work is whether employees are genuinely content to be there in the first place, and how long they’re content to stay after the satisfactions have faded.

Industrial psychologists and human performance technologists have long suspected that traditional job satisfaction has lost its motivational effect. The more employees are given, the more they expect—and yet they still complain, and come and go regardless of efforts to keep them satisfied. HR leaders and CEOs are asking: “If employees can’t be satisfied, how else do we attract, motivate, and retain them?”

The answer reveals a surprising source of employee resilience, motivation, and effectiveness that was overlooked and is relevant to everyone who works. Careers are guided and sustained by an employee’s sense of career contentment, and job satisfaction plays only a minor role in their decisions.

The idea that contentment trumps job satisfaction may be a surprising revelation for some employers. That’s because the business world has forever equated job satisfaction with success and fulfillment, and we assume contentment means “settling for less.” But as this article reveals, things are not as they seem.

There never was nor will there ever be a consistently perfect or completely satisfying job, career, or employer. Even within the best employers, it’s the nature of an employee to eventually want more or something new and different, making it impossible for employers to satisfy all employees all the time. Since my career began almost thirty years ago, every generation entering the workforce has complained about the same dissatisfactions as the generation before them—this, despite the efforts by employers to continuously improve job satisfaction. Employees are never completely satisfied, but thanks to their contentment, this has never prevented them from having enjoyable careers.

Job satisfaction vs. career contentment
To understand why contentment is so important, it helps to know how it differs from satisfaction. Dictionaries imply these words mean the same thing, but their etymology or root origins suggest otherwise. Each fulfills a different purpose, and contentment doesn’t mean “settling for less.”

The word satisfy originates from the words sad and factitious. It’s sad, because in order for employees to be satisfied, someone has to do something to fulfill their expectations first. They can’t simply choose to be satisfied, and because they lack control over their employer, job, boss, pay, benefits, and other things that make them satisfied, employees may never be completely satisfied. It’s factitious, or artificial, because satisfaction doesn’t originate from within but is dependent on outside factors. The term intrinsic job satisfaction is misleading, because it’s not possible without the job, which is controlled by employers. Job satisfaction is a condition beyond an employee’s ability to control except by bargaining, complaining, or changing jobs.

The word content originates from the words contain and enclosed, suggesting that when an employee’s desires are limited by what they already have, or when satisfaction isn’t possible, the contented employee endures with a calmness protected by their own self-sufficiency. Rather than complain about what they don’t have, the contented employee decides to persist with or endure what they do have until they can turn their situation around. As such, contentment is not a condition controlled by others, but a state of mind that only the employee controls. Their state of mind is dependent only on how they think, and by reasoning alone an employee can choose to be content even if dissatisfied. Employees rely on resilience enabled by their contentment.

Employers control jobs and the means to satisfy, while employees control their state of mind or contentment, which they rely on to manage their careers with or without job satisfaction.

The idea of career contentment was inspired by employee reactions to the tragedy of September 11. Following this event, employees began to question why they were working so hard when at any time they could go to work and lose their lives to another tragedy. They said, “Job satisfaction is offered everywhere, but not guaranteed or worth dying for.” They asked, “What is so important that I would be content to stay in a job despite risks and dissatisfying conditions?” Although employers were offering job satisfaction (which employees can’t control), employees were looking instead for contentment (which they do control).

Best employers are contentment-worthy
You could say employers have spent billions trying to improve the wrong thing all these years, except they can’t offer employees career contentment. It’s a state of mind. But what “best” employers can do is demonstrate their contentment worthiness.

To understand contentment worthiness, realize contentment is from within, and personal or different for everyone. It’s linked with the use of motivated talents and the fulfillment of meaningful purposes. What employees consider contentment-worthy is work that engages their motivated talents, and is relevant or conducive to the fulfillment of their meaningful purposes. Their purposes are not limited to factors inside the employer, which means an employee may be content to stay in a job for reasons on or off the job. Why some employers are considered best is because they’re most attentive to the whole person—not just the paid employee.

Career contentment solves a mystery that has frustrated everyone who has ever managed people. It explains why an employee won’t accept just any job, no matter how satisfying; why they may be content to stay in a job despite dissatisfying conditions; and why they may leave a job despite the best efforts by employers to keep them satisfied and engaged. They’re on a mission, and job satisfaction is secondary to the contentment they derive from pursuing what they reason is meaningful to their evolving purposes.

From the employee’s point of view, job satisfaction is great when they can get it and so is engagement with their work, but only when they want it. More important is their sense of career contentment which, if genuine, can’t be bought.

Best employers grasp the notion of contentment worthiness. They’re not in business to satisfy employees or to manage their careers. They seek self-sufficient and purpose - driven employees and don’t expect them to forfeit their purpose simply because they’re paid to fulfill the employer’s purpose. They want the right employees, contented to be in the right jobs and utilizing their talents to make valued contributions without complaining, because dissatisfactions are inevitable and can be avoided or endured. They’re oriented to help employees make informed career choices, and to ensure they’re trained, resourced, recognized, and rewarded.

It’s simple. Best employers believe people want to work. They make it possible for employees to do what they love doing most and to experience as often as possible that “end of the day” feeling of self-respect and genuine contentment that comes from a job well done and appreciated.

A new paradigm
Maintaining a contented workforce requires a shift of the job satisfaction paradigm we grew up with and that is still being taught. It goes like this: Do what you love and work real hard and your employer will make you satisfied.

At first glance this seems reasonable, but today it evokes comments like “Yeah, right!” and “Whatever!” This paradigm contributes to the very problems employers are trying to prevent. If we know employees are never completely satisfied, why do we insist on propositioning them with job satisfaction? Employers are giving employees a reason to complain and training them to be dependent rather than self-sufficient. And although employees are expected to be content and not complain, they were never trained how to be content without complaining.

A new paradigm focusing employees on their career contentment should say: Take the responsibility for doing what you love, but also look for ways to love what you do without complaining, and let employers worry about keeping you satisfied.

Benefits to employers
Career contentment is not a program. Leaders won’t have to decide whether to adapt this new concept because it already exists in the minds of employees. It’s a matter of catching up to them.

Career contentment functions like an internal “homing device.” It feels to employees like the job finds them, and without actually experiencing what it’s like to work someplace, they know instinctively which employer is best for them, how long to stay, and when they’re being called elsewhere. This happens without regard to job satisfaction, but because job satisfaction is offered, employees feel compelled to complain if they don’t get it.

Dr. Chris Peterson, co-founder of the new positive psychology and board member to the Gallup Organization’s Positive Psychology Institute, put it this way: “Due to a lazy misuse of terms, we overlooked how career contentment trumps job satisfaction in importance to a person’s career.” And Dr. Richard Petty, a noted MD and specialist in psychiatry and human potential says, “Career contentment is a key aspect of our work lives that slipped under the radar and will birth a revolution in the workplace.”

The challenge to best employers is how to switch on an employee’s “homing device,” and to ensure they understand how to purposefully utilize their career contentment to avoid complaining and suffering the costly effects of job stress and dissatisfaction. This will require training to reorient employee reasoning and to develop their self-sufficiency and resilience, and employers will be glad they did. Some benefits:

• Reduced complaints and associated costs. According to the American Institute of Stress, US employers are spending over $300 billion each year to address the same complaints arising from job stress and dissatisfaction (no doubt caused in part by employees expecting satisfaction and never being oriented to contentment).
  
  
• Performance improvement. Career contentment draws from positive psychology, which teaches that people don’t live in response to their conditions but in response to their emotions caused by what they think. The conditions we encounter in life are subject to our thoughts about them, and by improving how employees reason to deal with their conditions, it’s possible to improve how they feel and the effectiveness of what they do. Employees preoccupied with needing, wanting and complaining act on emotions of fear, worry, envy, doubt, and anger. Employees predisposed to reasoning and leveraging their contentment to endure act on emotions of enthusiasm, excitement, optimism, and gratitude despite their conditions, which enables resilience and greater performance potential.
  
  
• Recruitment and retention effectiveness. Relying primarily on job satisfactions to attract and retain doesn’t push all the right buttons, wastes resources, and invites complaints. Generation X and the Millennials are not eager to work for the same job satisfactions they saw their parents miss out on, and seasoned employees realize satisfaction is fleeting. Employers espousing career contentment and demonstrating its worthiness will have a distinct advantage over employers who don’t get it. By connecting with or inspiring employees on a level meaningful to their career contentment, savvy employers activate "homing devices."

Although not every employer can win the “Best Place to Work” award, any employee can make any employer feel like a best place to work when they stop expecting satisfaction and learn how to rec-ognize and leverage their career contentment. Copyright 2008 by Jeff Garton, All Rights Reserved.

Hiring Made Easy
Create Checklists!

Create job descriptions
A job description should be created for a new position or updated for an existing one. Is the job going to be exempt or non-exempt? There are rules for determining this. It is important to have correct and accurate job descriptions. If the description is too vague, it may attract too many applicants who do not qualify. Also, don’t make the description so detailed that it may scare off even qualified applicants.

Screening resumes and applications
Resumes and applications should be screened by one central person so there is consistency. I recommend the screener be either a recruiter or a Human Resources professional, because they are trained to look for red flags on applications and also to remain neutral in the selection process. Too many times, hiring managers or their executive assistants will do this. This can lead to things being overlooked on the application/resume, or to possible discrimination lawsuits because of inconsistencies.

The recruiter or Human Resources professional should set time aside to go over the job description with the hiring manager and also to find out other important functions necessary for the job. This will help them tremendously in selecting the top applicants.

Before the interview
Now we have selected our top applicants to interview. Before the interviews are set, the recruiter/human resource professional should develop a standardized set of questions. These questions should be shared with the hiring manager so their questions build upon your questions.

The hiring manager’s questions should also be a standardized set of questions so the interviews remain consistent and legal. Many hiring managers think they know how to interview or what questions to ask because they themselves have been interviewed in the past. The reality is, a lot of them don’t know what questions they can legally ask an applicant and this can create possible lawsuits for your company. I recommend training for all new and existing hiring managers on how to interview. I also recommend that you sit in on the first initial interviews the managers conduct, to make sure they are asking appropriate questions and not asking any leading questions that could be considered discriminatory.

Conducting interviews
Make sure you arrange for an interview space, a procedure on how to contact the applicants and how you are going to schedule the interviews. The best time to conduct interviews is in the morning. When conducting the interviews, make sure you give each applicant the same amount of time for the interview. If you screen the applicants well, there should not be a surprise applicant who does not qualify and thereby, wastes your time and theirs.

Ready to make an offer
Once you have selected the top one or two applicants, make sure to advise them that you may contact at least two work references and confirm the salary before making any offer. Also inform the applicant of any background checks, credit checks or drug testing that must be completed. The offer is contingent until they have cleared. Send the job offer for the new employee’s signature and make sure “at will” language is incorporated into the offer letter.

You’re hired!
The applicant has accepted your offer and is ready to start. Now is the time to schedule a new employee for benefits orientation, request computer sign-on ID/email access (if applicable) and prepare the new employee’s workstation, including computer and phone. If applicable, order their new business cards, name plate and parking permit. You will also prepare the timesheet and explain timesheet procedures.

Orientation and forms to provide
During orientation, you will also be providing the following documents to the new employee:

• W-4 Form
• Employment Eligibility Verification
• Employee Withholding
• Report of New Employee
• I-9 Form
• Form DE-34

Other required information and forms to provide a new hire include:

Workers’ Compensation Information at the time of hire or no later than the end of the first pay period, Personal Physician/Chiropractor Pre-designation Form, Disability Insurance Pamphlet, Form DE 2515, Paid Family Leave Pamphlet, Sexual Harassment Information Sheet, DFEH 185 English/DFEH 185S Spanish or equivalent, Work Permit (if employee is a minor) and California Employee Withholding Form DE-4.

During the orientation, highlight any important areas of the employee handbook. As you might be aware, there are a lot of employees who do not read the handbooks, so it is best to cover it with them now and not wait until you have an employee relation issue because they didn’t read it. A nice way to introduce a new employee is to assign a coworker within the department to help them out in their first week.

Finally, all of these steps should have checklists so you never forget an important item!

Must Do v. Should Do

It goes without saying that virtually every Human Resources function skews heavily towards compliance. On a daily basis, we turn to state and federal laws and regulations to answer questions about how to pay employees, administer their leaves, or even terminate their employment relationship. In our pursuit of what we must do, however, we often lose perspective on what we should do.

Employment laws generally deal with minimums: minimum wage, minimum leave, minimal benefits. Those employers who squeak by doing only the “minimum” for their employees tend to attract and retain the same – marginal performers. No HR professional wants this result.

When researching what the law requires, don’t end the analysis there. Granted, in California particularly, there will be times when what the law requires you to do is much more than what you wish to do for an employee; however, there will also be times where the law requires much less than what an employee would expect of you.

Your research into what a law or regulation minimally requires should always accompany a discussion of what its impact will be on your employees. If enforcement will leave your employees with a bad taste in their mouths, you probably need to take a step back and rethink your decision. Below are just a few examples to illustrate this point.

Health care continuation and PDL
California’s Pregnancy Disability Leave (PDL) does not actually require employers to extend health care continuation to employees on PDL. Because FMLA (which does mandate coverage) may run concurrently with PDL, the issue of health care continuation is often a moot one. However, if an employee has not been with the company a year, has not worked 1250 hours in the last year, or works at a site with less than 50 employees within 75 miles (and, thus, triggered FMLA), PDL regulations do not prevent an employer from extending COBRA to that employee. But just because the employer may terminate health insurance, should it?

Discontinuing medical coverage for an employee at a time when she needs health insurance the most (prenatal care, etc.) undoubtedly sends the message that the employer is not supportive of its employees in their times of need. No one wants negative PR to be the unintended byproduct of a company’s decision to act on what it learned it was permitted to do – without thinking through the impact it would have on employee relations. Of course, there will be times when you decide to act in a way that will not be warmly received by your employees, but failing to even take into consideration what they would think, first, is not making an informed decision at all.

Translating documents into other languages
Many employers in California have a substantial number of employees in their workforce for whom English is not their native tongue. Some laws (state and federal) require that documents the employer generates are translated into other languages if a percentage of employees are native speakers of that language (e.g., summary plan documents, written FMLA policies, etc.). By limiting your decision to translate only those documents that require translation, your employees may question your commitment to diversity. Moreover, if the document directs your employees to observe an important rule, you don’t want them to argue they couldn’t comply because they couldn’t read the document.

The above scenario offers a good example of the positive results you gain by going beyond your compliance obligations. First, it sends a positive message to your employees; and secondly, it protects you by removing employees’ arguments that they didn’t comply because they didn’t know better.

Conclusion
It is so easy for HR to fall victim to tunnel vision. Don’t focus so intently on what the law permits you to do that you lose sight of what you should do – or at least of what the employees will think of your decision. For additional scenarios to help you distinguish between compliance and HR best practices, contact a member of Employers Group’s Helpline.

Summer Hires and Child Labor Laws

With the summer vacation period rapidly approaching, employers will be receiving an increase in applications from students seeking temporary employment. Some of these students are considered “minors,” whose working conditions and hours are regulated by state and federal laws. In some instances, the state or federal law will ban the employment of minors entirely.

Under the California Educational Code, a “minor” is defined as a child under the age of six and any person under the age of eighteen who is required to attend school. Employers Group’s Helpline Consultants put together this overview for employers.

Permits
A Work Permit will be required prior to employing a minor, even during the summer vacation, unless the minor is a high school graduate or has a certificate of proficiency. In California, any minor who is at least twelve years of age may be issued a Permit to Work by school officials; however, few occupations are available to them. Federal and state occupational restrictions are such that in most cases, minors must be at least fourteen years of age to begin working. The permit contains the maximum number of hours a minor may work in a day, range of hours during the day, occupational limitations and any additional restrictions imposed at the school’s discretion.

A Permit to Employ is the employer’s copy of the work permit and expires five days after the opening of the next succeeding school year. It must be renewed to continue employment.

Occupational restrictions
Minors under eighteen are restricted in any occupations declared by the Secretary of Labor to be hazardous. The complex and lengthy regulations are set forth in Title 29 Code of Federal Regulation Part 570, Subpart E. A selected list of these are:

• Motor vehicle drivers and helpers
  
  
• Positions in plants manufacturing explosives
  
  
• Operations of a power-driven wood-working machine, a hoisting apparatus or a metal forming, punching or shearing machine
  
  
• Operators of bakery or paper products machines
  
  
• Mining, coal mining and logging occupations
  
  
• Positions involving exposure to radioactive substances
  
  
• Jobs involving the operation of circular saws, bandsaws, or guillotine shears
  
  
• Brick and tile manufacturing positions
  
  
• Occupations involving excavation, roofing, wrecking, demolition or shipping
  

Persons over eighteen may be employed in almost any occupation. However, there are rare exceptions, such as particular employment situations involving the sale and service of alcoholic beverages and transporting hazardous material. The California vehicle code also has additional restrictions.

Do Recessions Impact Hiring (and Keeping) the Best?

The employment landscape is changing considerably due to external influences. The “R” word is more than a whisper: recession is now an untoward reality. Employees are loosing their homes, while the demand for rent is high. The price for groceries is increasing (large eggs cost about $2.19, up from about $1.54 in 2007), largely due to the cost of gasoline. Gasoline may already be up to $4.00 per gallon by the time you read this article.

Recent employment reports have indicated that unemployment claims have risen to the highest level in five years. Typically, recruiters are optimistic about the prospect of having a larger pool of candidates to choose from when unemployment is higher. This should mean that recruiting will be easier, right?

Well, you may consider pausing before embracing this myth. By 2010, more than 51 percent of the workforce is expected to be 40 or older. On the other hand, there is an expected decline of 5.7 percent in workers 25 to 39 as indicated in a Bureau of Labor Statistics report. Also see Employers Group December 2007 Employee Retention: The Generation Issue for more information regarding the U.S. future talent deficit.

Moreover, expect this decline in talent and the recession to be global. American consumers spent over $9 trillion last year, out-spending China by $8 trillion dollars. When America stops spending, importers like China will inevitably feel the crunch.

Europe is expect to experience 60,000 fewer workers by 2010 and that number is expected to get higher thereafter, leaving the country with 5.1 million people needed for their growing workforce, according to The Age and Employment Network survey.

Staying ahead of your competition
Here are five guidelines to help your company stay ahead of the competition.

1. Quantity does not equate to quality.
   There will continue to be a deficit of top talent conservatively for the next few years. Hence, throw away your generic job descriptions, and truly define great performance. Tie the definitions to your organization’s goals, and to the knowledge, skills and ability of the talent.
   
   
2. A recession typically means that employers must do the same (or more) with fewer resources.
   This means capturing control of your talent-supply chain, just as your organization would with other critical resources; this includes taking stock of internal networking ability that management may have with associations and memberships. Streamline your recruitment process, such as eliminating barriers to efficient placement and increasing automation, plus Web-based capabilities. Additionally, centralize the recruiting process for consistency and efficiency.
   
   
3. Manage your current talent.
   Top performers are difficult to recruit and retain regardless of the state of the economy. Retain your top performers by delaying your strategy to satisfy the majority of employees to avoid dissatisfying a few. Rather, tailor your strategy with an emphasis on satisfying your top performers. Remember, the best people usually have ample career options.
   
   
4. Consider the financial challenges for talent.
   The considerations include: the cost of commuting to and from the worksite; rising cost of benefits without salaries matching the pace, as well as the expense of urban living, since suburban proximities are becoming just as costly. Are the current wages offered competitive? Can talent afford to work for you?
   
   Recently, a friend was asked to join a large company sales team. Regrettably, the typical elation diminished when she received the offer. The offer was such that she could not afford to work and pay for medical benefits for her family. All too often, employers ignore local external factors like this. Rather, employers mistakenly only assess historical data.
   
   
5. Be innovative.
   According to Towers Perrin, even though companies are downsizing, 73 percent of those same companies are also hiring at the same time. Stay connected to your local community. If your competitors announce a layoff, get in touch with the competitor’s HR contact. Here’s an opportunity to send the employees affected by the layoff a sympathy letter; information about open positions, company and benefit information; and include branded company items that will help you stand out as an employer of choice.
   

As the landscape morphs towards a looming talent deficit, employers must be vigilant in their actions to engage and retain talent regardless of the state of the global and local economy. Recruiting is predicted to become trickier than ever.

Proposed FSA Regulations for Cafeteria Plans

Effective for plan years starting on or after January 1, 2009, employers are subject to final regulations concerning cafeteria plans. Presently, the IRS is reviewing public comments on its proposed rules issued on August 7, 2007. Once final regulations are issued, they will replace previous “dash one” (1984), and “dash two” (1989) regulations. Employers may rely on them now, even before 2009, if they so choose.

Of the five sections in the proposed regulations, the one we are asked about most often is FSAs. The following summarizes the proposed regulations concerning these accounts:

• The “Use-It-or-Lose-It” is still in place, but renamed “Use or Lose.”
  
  
• FSAs are allowed to be 100% funded by employer flex credits. The maximum amount of FSA reimbursement must be less than 500% of salary reduction and employer credits.
  
  
• The uniform coverage rule states that the full amount elected is always available for reimbursement, regardless of the actual amount in the account. This rule is applicable for health FSAs, but not for dependent care or adoption assistance.
  
  
• FSAs must have a 12-month period of coverage except for beginning or ending short plan years.
  
  
• The period of coverage may be different than the plan year. There may be different periods of coverage for different qualified benefits.
  
  
• FSAs can only reimburse for qualifying benefits during the period of coverage.
  
  
• Eligibility for an FSA can be limited to employees who participate in specific employer health plans.
  
  
• All allowable expenses under IRS Code Section 123 (d) need not be covered under the health FSA. For example, the plan could exclude over-the counter-drugs.
  
  
• A health FSA may reimburse orthodontia expenses when advance payment is required. However, this is not allowed in cases where a discount is offered for prepayment. This may change in the final regulations.
  
  
• A health FSA may reimburse 100% of durable medical equipment even if that equipment may be used in subsequent years.
  
  
• The interaction of FSAs and Health Savings Accounts (HSAs) is restated in the New Proposed Regulations.
  
  
• Employee contributions to the FSA may be made on any schedule the employer elects, even quarterly if desired, as long as the schedule applies to all participants.
  
  
• The forfeiture allocation rules remain the same for FSAs. The employer may keep the forfeitures, use the forfeitures to pay for administrative expenses, or allocate the forfeitures to plan participants.
  
  
• The grace period amendment remains in place. This amendment allows employees to incur expenses and receive reimbursement from the prior year FSA balance. This grace period remains at 2 months and 15 days.
  
  
• There are alternative rules for an employer to reimburse qualified dependent care expenses incurred after termination through a dependent care FSA.

What’s Up for Employers in 2008 CA Legislature?

If you offer an employee benefit program, then you know about the one million and one things that go with the pricing and administration of such an employee perk. Many companies look to their HR department to pick up the pieces in this area. Other companies may rely on the accounting department or office manager to help make sure that everything is handled. With all of the administrative rules and state and federal laws around these programs, it can be a lot to manage!

Workers’ Comp
For employers, there were no major surprises. The usual assortment of workers’ compensation bills was introduced and two stand out as significant:

• SB 1115, Migden, permanent disability:
  This bill provides that race, religion, national origin, age, gender, marital status, sex or genetic predisposition may not be considered as a factor in the causation of any permanent disability. The bill is a response to press accounts of permanent disability awards that have been reduced due to predisposition factors, such as for an African American man whose award was reduced by a specified amount due to the higher risk of hypertension in African American males.
  
  
• SB 1717, Perata, permanent partial disability benefits:
  At the moment, this legislation is just an “intent” bill to adjust the formula for determining permanent partial disability benefits. Labor, however, has wanted to increase permanent disability benefits for the last two years, and Senate President Perata may want to accomplish this before he is termed out at the end of this year.

Meal and Rest Periods
Labor Code Section 512 states that an employee may not work more than five hours in a workday without being provided a 30-minute meal period. This rule has been interpreted in various ways by state enforcement officials and the courts, leading to significant confusion.

This confusion has prompted costly litigation against California businesses that now may face significant settlements and/or penalties. Meal period disputes are currently 40 percent of all California class action lawsuits and approximately one-half of all employment-related lawsuits filed in California each year.

There are a number of bills relating to meal and rest breaks: SB 1192, Margett, and AB 2719, Jeffries, relate to all employees. SB 342, Torlakson, relates to armored car company employees, and AB 2530 affects workers in the transportation industry.

SB 1539, Calderon, is a bill sponsored by Employers Group and a broad-based group of other business organizations. Below is a portion of the bill summary:

The Industrial Welfare Commission (IWC) of the Department of Industrial Relations adopts and amends wage orders that, among other things, specify how meal periods are required to be provided to covered employees within various industries, including the procedures for providing employees with on-duty meal periods.

This bill would revise the statutory requirements for the provision of meal periods to specify that the requirements apply only to employees subject to the meal period provisions of an order of the IWC. The statutory requirements for providing the meal periods would be revised to specify that a meal period based on working more than five hours in a workday is required to be provided before the employee completes six hours of work, unless the existing waiver provision is invoked.

The waiver provision for the 2nd meal period would be changed to provide an exception for different provisions within IWC wage orders in effect as of January 1, 2008, and to permit the employer and employee to agree to waive either the first or the 2nd meal period if the employee otherwise is entitled to two meal periods.

The bill also would specify conditions under which on-duty meal periods are permitted rather than meal periods in which the employee is relieved of all duty. The meal period provisions of a valid collective bargaining agreement would be required to be implemented for covered employees rather than the statutory requirements.

Mandatory Sick Leave
Another bill particularly bad for employers is AB 2716, Ma. As a San Francisco County Supervisor, Ms. Ma successfully authored a mandatory sick leave ordinance for that city. As an Assemblywoman, she has introduced AB 2716, which would require all employers to pay sick leave, to accrue at no less than one hour of paid sick time for every 30 hours worked.

The bill would apply to all employees after just seven days of employment (although employees would not be able to use the accrued leave until after the 90th day of employment). The sick leave benefit could also be used for the illness of a family member or for leave relating to domestic violence or a sexual assault.

New leaders
The first three months of the legislative session have been spent primarily engaged in jockeying for new leadership positions. Senate President Don Perata and Assembly Speaker Fabian Nunez are “termed out.” Senator Darrell Steinberg was elected as the new Senate President, and Karen Bass the new Assembly Speaker. The leadership positions officially become effective in November, but once Perata and Nunez became lame ducks, much power shifted to the new leaders.

Employees & Supervisors Not
Personally Liable Under FEHA

The California Supreme Court recently held that the California Fair Employment and Housing Act (FEHA) does not hold supervisors or employees personally liable for retaliation in violation of FEHA. The decision overturns a lower court finding that reinstated money damages to an ex-employee for sexual orientation discrimination against a supervisor and the employer – see Jones v. Lodge At Torrey Pines Partnership (2008). The Court made it clear that the employer may still be held liable for retaliation.

The Lodge at Torrey Pines Partnership (company) owns and operates the Lodge at Torrey Pines (LTP), a hotel and restaurant in La Jolla, California. Scott Jones started working for LTP in 1995 as a supervisor at LTP’s restaurant called The Grill. He was promoted to manager of the restaurant in 1997. Then in 2000, he was promoted to Outlet Manager, a position making him responsible not only for the restaurant, but also for the bar, catering and banquet events, and the beverage cart service to golfers on the golf course.

In 2000, the company started a major reconstruction project at the LTP to upgrade it to a five-diamond hotel. The Grill stayed open during the extensive reconstruction. Jean Weiss was hired, in a superior position to Jones, as LTP’s Food and Beverage Director in 2000. Jones claimed that Weiss and Kitchen Manager Jerry Steen developed a special bond of vulgar joke-telling. He claims that they told jokes that degraded women and gays. When Jones was not present they reportedly said that Jones had to go home to "f... [his] bitch" or "[his] bitch needs [him] at home." Weiss and Steen also allegedly aimed graphic "gay-bashing jokes" at Jones, and kept copies of the jokes in the bar next to The Grill.

Jones said he received several complaints from female employees who worked in the LTP’s cart department stating that they felt uncomfortable around Weiss and Steen, particularly Weiss. They said Steen used offensive language, including calling them “bitch,” and Weiss would leer at them.

In early 2001, Jones complained to Weiss that Steen was aggressive and unprofessional in the workplace toward women. According to the case, in February or March, Weiss threatened to fire Jones if he “aired any dirty laundry,” i.e., spoke to the Human Resources Department about anything that happened at the LTP’s Food and Beverage Department.

In May 2001, Jones sent Weiss an interoffice memorandum, stating: “Please refrain from your unprofessional remarks.” Jones said that his reference to “unprofessional remarks” included gay-bashing jokes and jokes about women. Weiss responded by taking Jones into an office, locking the door, sitting Jones down in a corner, and delivering a tirade. Then Weiss crumpled up Jones’ interoffice memorandum and threw it at him. Jones stated he felt physically intimidated by Weiss.

Steen was promoted in June 2001 to Food and Beverage Operations Manager for The Grill and the LTP’s golf course operations. A few days later, a female employee told Jones that she wanted to file a complaint concerning gay-bashing jokes she heard Weiss and Steen tell about Jones and his partner. Then, Jones met for two hours with the HR Director, and complained about the use of vulgar language, and sexual orientation discrimination and harassment at the LTP, and about the sexual harassment of his female coworkers. Jones told the HR Director that he was emotionally upset and needed a therapist for counseling. The HR director reportedly advised Jones that he would have to get permission from Weiss, and suggested that Jones quit his job, because “things like this get worse.”

In June, Weiss met with Jones and gave him a written notice that he had 30 days to improve his performance. After that meeting Weiss stopped talking to him and excluded him from the LTP weekly management meetings, which he formerly had attended. Meanwhile, according to the record, Weiss and Steen continued to use offensive language in the workplace and Jones states he overheard Steen threaten to “punch the faggot in the mouth.” Jones complained to HR about Steen’s threat. The HR Director said he would talk to Weiss, but Jones never heard back from him on the matter.

In July, 2001, Jones’ doctor put him on disability leave for “on-the-job harassment.” Jones was offered a position at another company-owned hotel, but he refused. Jones informed the HR Director that he had met with a DFEH representative. He claims that the HR Director accused him of “blackmailing” the company. In September 2001, the company was given notice by the DFEH that a complaint had been filed by Jones. Jones returned to work for a brief time, and was written up four times for poor work performance issues.

In January, 2002, Jones quit, giving two weeks’ notice. He told a representative of company management that he received warnings for “stupid stuff.” He said that he had thoroughly enjoyed working for the company, but he was sick of the abuse and wanted to feel better, and that he was worried about his health, which was his first priority.

Jones sued the company and his supervisor Jean Weiss and others. Finally, his multiple legal claims were reduced to only two. He claimed sexual orientation discrimination against the company, and retaliation against the company and Weiss. At trial the jury returned sided with Jones. It awarded compensatory damages of $1,395,000 against the company and $155,000 against Weiss personally.

The FEHA forbids retaliation and discrimination and forbids “… any employer, labor organization, employment agency, or person to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part or because the person has filed a complaint, testified, or assisted in any proceeding under this part.”

The Supreme Court supported its prior judicial thinking in Reno v. Baird (1998) regarding personal liability in a discrimination case. Regarding retaliation in the Jones case, the Court reasoned that if it took Jones’ position it would “… place a supervisory employee in a direct conflict of interest with his or her employer every time that supervisory employee was faced with a personnel decision.... [It] would coerce the supervisory employee not to make the optimum lawful decision for the employer. Instead, the supervisory employee would be pressed to make whatever decision was least likely to lead to a claim of discrimination against the supervisory employee personally, or likely to lead only to that discrimination claim which could most easily be defended.

“The employee would thus be placed in the position of choosing between loyalty to the employer’s lawful interests at severe risk to his or her own interests and family, versus abandoning the employer’s lawful interests and protecting his or her own personal interests. The insidious pressures of such a conflict present sobering implications for the effective management of our industrial enterprises and other organizations of public concern. We believe that if the Legislature intended to place all supervisory employees in California in such a conflict of interest, the Legislature would have done so by language [which is] much clearer…”

Health Benefits Resurgence
Protects Employee and Employer

When it comes to implementing benefits packages, Human Resources professionals generally consider them a security blanket for employers and employees alike. New studies indicate that companies that increase the value of their benefits not only show gains in attracting top talent, but also see an increase in employee loyalty via lower turnover. More impressive yet is increased employee productivity, garnering great benefits for the organization itself.

Regrettably, the findings of such studies also suggest these companies are more frequently adding benefits and perks haphazardly, without first thoroughly evaluating the costs of such programs – a detrimental game plan if little evidence exists to support the program’s success. Still believing that elaborate perks are required to maintain the upper hand, HR professionals continue to create “meatier” packages with convoluted details and little evidence to substantiate such efforts.

Blame it on the times
Among the many reasons benefit packages and perks continue to expand, the one most often cited in surveys is the pressure exerted by peer-companies through alternative work schedules, commuting options, and employee-friendly benefits. These types of benefits are constantly redefining and reshaping the workplace and are popular programs companies seem eager to embrace, but not so eager to research.

Such programs are implemented with questionable presumption about the costs of the benefits. In these instances, employers are generally limiting the cost of their benefits to their medical and insurance plan. By not considering other benefits, perks, and costs associated with these employment practices, companies may miscalculate their costs by as much as 70 percent!

For example, medical and dental costs generally comprise approximately 30 percent of the total benefit of employment program expenses. Other costs often overlooked include: time-off compensation, retirement plans, payments required by law, and the costs of family-friendly benefits (i.e., severance pay, tuition reimbursement options, relocation, etc.). Even so, as medical benefits remain the most favorably scrutinized benefit, there is a significant need to examine how medical benefits influence the workplace.

Health care havoc
Although the most common type of health care in the past was the Indemnity Plan, the personalization of packages has created an array of options for employers to choose from. Among these are the HMO (Health Maintenance Organization), PPO (Preferred Provider Organization), POS (Point of Service), and “hybrid” versions of these plans.

Over time, the popular choice among health benefits has shifted in favor of the HMO, standing at 80.8 percent. In the last few years, however, the popularity of PPO plans has increased twice as fast as HMOs, which now closely matches HMO rates at 77.7 percent. While other more costly plans may never disappear as they nevertheless cater to particular employee groups – such as indemnity plans (still the select choice of executives) – they are not typically desired by employers.

Rather than breaking budget on expensive options, employers have opted towards determining personalized approaches in creating striking benefits packages to meet employees’ unique needs.

For example, our latest survey of California companies shows 96.2 percent of the respondents offer medical benefits not only for employees, but for their dependents as well. Furthermore, of those who offer these types of benefits, 40 percent offer health benefits to same-sex or opposite-sex unmarried couples. Within these benefits lie a variety of coverage amounts and types, including coinsurance, drug co-payments, mail-order drug plans, and more in-depth wellness plans. Even these have been customized to better meet the needs of maintaining affordable coverage for employees and keeping tight control over year-to-year cost increases.

As evidenced by our latest survey, this approach may be an attempt to create lower year-to-year increases for companies – between 2006 and 2008, the average annual premium increase was 9 percent, while 2001 to 2004 reflected an annual increase of 16 percent.

An apple a day
Budget restrictions around cost control may initially deter the spread of employee-friendly benefits, but the proper examination of benefits before implementation can be a proactive approach. Research has led companies to turn toward wellness programs. Our survey indicates that within the last 12 months, 6.1 percent of companies have introduced innovative approaches to the work environment (i.e., extended vacation, employee retreats, etc.) with positive results in employee morale, sick days, etc.

These findings support the balance employers seek between the cost of health benefits and the retention of top performers in an overall healthy and loyal workforce.

Information for this article was derived from the 2008 Human Resources Practices & Benefits Survey, data effective December 2007. For information on purchasing the book or CD, visit the survey’s website at www.employersgroup.com/surveys.asp.

Write to the Point

How many times have you read an email or memo and by the second paragraph wondered, “Why am I reading this?” Sadly, this is a common problem. In fact, a major complaint about today’s business writing is that it doesn’t get to the point. Why? Because writers write without thinking. As a result, their writing lacks focus, and they lose their readers’ attention and the chance to communicate good ideas.

Getting to the point is the hallmark of effective communication and is especially important when considering that today’s business professionals read, on average, between 40 to 50 email or memo messages per day. That means you need to make your point in the very first paragraph and in a clear, brisk way. To communicate effectively, you must crystallize your message into one paragraph—a single paragraph that tells the reader what the message is about, why it is important to the reader, and what the reader should do with the information.

To write an effective opening paragraph requires strategic thinking and planning – two skills many writers ignore. And yet, taking time to think through the message can improve communication by 50%. This is not an easy task, but a necessary one. To make the point, let’s look at some typical opening paragraphs:

These opening paragraphs – although they somewhat improve with each iteration – all fail to get to the point. They don’t tell the reader what he wants to know:

This, in essence, is the main message. However, this message is typically buried in the second, third, or final paragraphs, where the reader is likely to overlook it. As a result, you’ve lost the reader—and maybe the sale. It now may take a phone call to clarify exactly what you will do and another email to outline the project. In the process, however, you’ve lost time and credibility.

On the other hand, a thoughtfully written opening paragraph tells the reader what he needs to know upfront – concisely and graciously:

In four sentences the writer has given the reader all he needs to know: what the message is about, why it is important to the reader, what the reader needs to consider, and what actions the reader needs to take.

A brisk, to-the-point opening paragraph is like the elevator pitch; it communicates the key message in a few short sentences. To write effective openings requires thinking strategically about the message and planning what you want to say.

Focus on the reader

• Why should the reader be interested in this message?
  
  
• What information does the reader need to clearly understand the issues?
  
  
• How will the reader use this information?
  
  
• What actions, if any, do you want the reader to take?

These questions force you to write from the reader’s perspective, rather than your own.

Next, consider the context – the business situation:

• Why are you writing, rather than calling or meeting in person?
  
  
• What do you want to achieve by writing?

This last question relates to the outcome. You may want a decision made, or approval or buy-in on an important policy issue. Whatever it is, you must clearly communicate it to the reader upfront. The outcome determines your strategy and the key points you will cover.

For instance, in the last opening paragraph example, the writer wants the reader to approve the floor plans, budget, and schedule. The opening strategy, however, is to first address the writer’s main concern - changes to the floor plans. Letting the writer know in the first paragraph that the plans have been changed to accommodate the reader’s request clears the way to discuss other issues - like budget and schedule.

Answering these planning questions before you begin drafting helps you focus on strategy and content. Planning allows you to think about the message rather than issues of style and tone, which you will deal with later when drafting and revising. By separating planning from the actual drafting, you avoid hit-and-miss messages that require repeated revisions and keep at bay the cursed writer’s block.

Taking the time to plan and think through your strategy helps you craft an opening paragraph that concisely expresses the key message that readers can quickly comprehend and act on. Thoughtful, well-written openings save you and your reader time, build your credibility and keep the business transaction on track.

Rising Health Care Costs
Could Self-Funding be the Answer?

According to the 2006 Kaiser Family Foundation Employer Health Benefits Survey, 55 percent of all U.S. companies partially or completely self-fund their healthcare plans.

An increasing number of employers have made the change to self-funding as a way to reduce costs. Self-funding may not be right for every organization. Employers considering a switch from fully funded to self-funded health plans should carefully consider the pros and cons before making the leap.

What is self-insurance?
When covered by a conventional insurance plan (fully funded), organizations pay a monthly premium, the cost of which includes the insurance company’s projected claim costs, overhead costs, profits, taxes, reserves, as well as various other charges. In exchange for this monthly premium, the insurance company assumes financial responsibility for claims filed on behalf of members based on the terms of the plan.

Self-funded plans, sometimes referred to as self-insured plans, offer an alternative to traditional health insurance plans. Employers can partially or fully self-insure their health benefits plans, typically health, dental and vision coverage.

Company size considerations
Most large employer groups self-fund their health benefits plans, assuming the financial risk for paying all employee health care claims out of pocket. Eighty-nine percent of employers with 5,000 or more workers self-fund, spreading their claims risk over a large employee population.

An alternative for smaller firms – generally those with 200 or more employees – is to partially self-fund their health benefit plans. The cost of a partially self-funded plan has fixed components similar to an insurance premium, such as administration fees and stop-loss premium. These and any other set fees charged per employee are referred to as fixed costs.

The employer sponsoring a self-funded plan also pays the claims costs incurred by the covered persons enrolled in the plan, and this cost varies from month to month based on health care use by the covered persons. Partially self-insured health plans allow a company to budget for small predictable claims while protecting the group against unpredictable catastrophic claims, through the purchase of stop loss protection.

Types of coverage
There are two principal types of stop-loss coverage, “specific” and “aggregate”. Specific stop-loss coverage is designed to protect against individual claims that exceed a predetermined limit. Aggregate stop-loss covers claims for an entire group and takes over when claims exceed a predetermined amount – either a dollar amount or a percentage of estimated costs. The amounts set for specific and aggregate coverage depend on the company’s size and cash flow capabilities.

While some large employers self-administer their self-funded group health plan, most smaller firms contract with a third party for assistance in claims adjudication and payment. Third party administrators provide these and other services, such as access to preferred provider networks, utilization review and the stop loss insurance market.

Advantages of self-insurance

• Flexibility in plan design – By self-funding, employers are able to design their own customized health benefit packages rather than a one-size-fits-all insurance policy.
  
  
• Far fewer mandates than state regulations – Self-insured plans are governed primarily by the Employee Retirement Income Security Act (ERISA) and are exempt from many state regulations mandating costly benefits. For multi-state employers, self-funding can help create national consistency by elimination of the need for state-by-state compliance.
  
  
• State Premium Tax savings – Self-insured programs, unlike insured policies, are not subject to state premium taxes. The premium tax savings is about 2-3 percent of the premium dollar value.
  
  
• Additional cash flow – The employer’s cash flow is improved when money formerly held by the insurance carrier in the form of reserves, for unreported and pending claims, is freed for use by the employer.
  
  
• Carrier profit margin and risk charge eliminated – Carriers assess a risk charge for insured policies (approximately 2% annually), but self-insurance removes this charge.
  
  
• Retain reserves when the Plan has a good year – An employer saves money when his plan’s claims experience is better than expected. Their experience is only based on their own population, and not pooled with other employers, who may have poor claims experience.

Disadvantages of self-insurance

• Employer assumes risk – The biggest disadvantage of self-funding is the assumption of greater risk. A year that brings large, unanticipated medical claims can be devastating to employers with poor cash flow. Self-funding also can make budgeting more difficult because health care outlays will vary from year to year. In contrast, fully-funded employers know the amount they’ll need to pay out over a specified period of time.
  
  
• Asset Exposure – The employer’s assets are exposed to any liability created by legal action against the self-funded plan.
  
  
• Fiduciary Responsibility – ERISA imposes a fiduciary duty on employers who self-fund, making them responsible for administering their plans in a prudent manner that is consistent with the plan and in accordance with fiduciary obligations under ERISA.
  

Dental and Vision Care
Unlike medical services, dental and vision services are predictable and rarely catastrophic. Wide fluctuations in cost and use of services, typical in medicine, are rare in dental statistics. Instead of purchasing insurance coverage from an insurance carrier, an employer can create a self-funded plan where they assume the responsibility for paying employee claims. The cost savings experienced from moving from a fully insured to self-funded dental and/or vision plan can be substantial.

Is it right for your company?
Knowing facts, such as whether your workforce is mostly young or old, whether the majority of claims were due to chronic illnesses or one-time incidents, and the total dollar amount of claims, will help you budget for claims in the future. Self-funding should be viewed as a long-term strategy in which good and bad years average out in the employer’s favor. Self-insured plans work best for companies that have a strong cash flow or reserves. Understand what your cash needs are, so you have money available to make timely claim payments.

Self-funding is an important option for employers to consider. When deciding if self-funding is right for your organization, the most important step you can take to assure that you make the best decision is to have an experienced consultant assist you. By carefully analyzing actuarial cost factors for age, gender, area, plan design and claims, employers can weigh the risks and the rewards.