Winners Named for the 2007
“California’s Best Places to Work”

By Wendy Taylor

As the keynote speaker, Olympic Champion John Naber celebrates the 2007 winners of EG’s “California’s Best Places to Work” at the Beverly Hills Hotel gala on February 28th.

If you were to ask hundreds of people “what makes a great place to work,” you would expect hundreds of wildly divergent answers – depending on where they work, their age and occupation, and whether they are an employee or the head of the company.

In our “California’s Best Places to Work” Program, Employers Group did exactly that. Via a two-part survey process, we asked the 400+ company entrants to assess what sets their organizations apart from the rest – and then we asked their employees to provide their own opinions, anonymously.

Six months later, 20 companies rose to the top, along with four honorable mentions. The answer to the question “what makes a great place to work” turns out to be multi-faceted; yet, interestingly, as the winners’ stories suggest, it comes down to a number of commonalities with three main themes: improvement, inspiration and innovation. Yes, company benefits count, but we’ll get to that

The three “I’s”
When we asked Olympic Champion John Naber, Keynote Speaker at the February 28th Gala honoring the 2007 winners of “California’s Best Places to Work,” to tie together the Olympic approach to winning with employers building a great business and motivating their people, he said:

“The motto of the Olympic movement doesn’t idolize the excellent; it encourages the devoted,” he said. “By focusing on improvement, all companies can grow stronger. If everyone is seeking a better way to satisfy the customer, the rising tide will lift all boats. Devoted employees work harder, think about company problems outside the workplace, and will likely arrive at more innovative solutions than workers who are merely watching the clock.”

Mark Wilbur, Employers Group’s President and CEO, put it another way: “Innovation is the lifeblood of every successful organization. Often, the next ‘great idea’ is what moves a burgeoning business to the forefront in today’s global market arena."

Questions posed
Even from the beginning, when Employers Group first launched this program last July, until the culmination with the selection of the winning companies, we became increasingly caught up in the excitement of learning the answers to these three questions: (1) what is company innovation, (2) what is employee inspiration, and (3) how do these two ideals come together to facilitate continuous improvement in successful organizations?

Answers revealed by the winners themselves
The answers came by looking at the attributes of all the winning companies. In this first California-specific competition, among companies vying for the honor of being one of the “best places to work,” we conducted and quantified the results of an exhaustive survey of both employers and their employees to determine the winners. Assessment dimensions included work/life balance; employee voice and workplace culture; community involvement; employee turnover; pay practices; benefits; perks and incentives; training and opportunity for advancement, and diversity.

Innovative practices inspire employees
Here’s a small sampling of some of the innovative practices demonstrated by the winning companies (not all categories are covered here).

• Employee-friendly benefits
  Under this category, we heard about, free on-site yoga classes, massage therapists, soccer, cycling and running clubs, and a variety of “fun events” for employees – from Go-Kart racing and private movie screenings to a Mother’s Day Survival Party and box seats at major league baseball games. Plus, catered meals during busy holiday schedules, company-sponsored surprise trips, subsidized golf tournaments, and best of all, a “reboot lounge” complete with foosball, pool tables and DirecTV.
  
  
• Community involvement
  We learned that companies have a deep commitment to improve the quality of life of people in the community – from donating and participating in Race for the Cure to large monetary donations to local charitable organizations. One employee-supported fund raised over $80,000 to help 17 families who lost their homes in the San Diego fires.
  
  
• Pay practices
  At one company, bonuse are not reserved for the company’s top leadership; even associates can earn up to 30% of their pay in bonuses and these bonuses are paid every month. Several companies reported a PTO donation program where employees may donate hours from their personal PTO account to other employees in need of paid time off to cover personal, medical or family emergencies. One pay practice is that sick time converts to vacation time twice a year. For maternity leave, employees may receive more than 60% of pay.
  
  
• Perks
  An Infant-at-Work program offers new parents the option of bringing their newborn to work with them until their child is five months old. A “Live the Journey” wellness program, whereby employees have access to fitness equipment, lifestyle seminars, educational materials and opportunities, company-sponsored social events, newsletters and other health minded programs. One company has a “meditation garden” near the main building, with beautiful flowers and benches for taking quiet breaks.
  
  Another company reported this: “To encourage a thankful spirit around the office, we have a ‘thank you’ message program among employees where the employee that has the most ‘thank yous’ gets a check for $3,000 (net).”
  
  
• Training & advancement opportunities
  We heard about an “Annual Training Day” for all employees, when the business is closed to the public and the employees are paid to participate in a fun and interactive, off-site educational day complete with food and prizes. Then there’s the company that provides employees with at least 10 years of service a fully paid sabbatical – up to 3 months; thereafter 50% of pay for the next 9 months. Another company provides more than 250 web-based and instructor-led learning programs to all employees.
  
  
• Diversity
  All the winners report that diversity programs are important to their workplace culture. One company program provides an affinity network devoted to the advancement and retention of women through coaching, mentoring, and networking forums. Another establishes retreats for “our attorneys of color and openly gay and lesbian lawyers.”
  
  Finally, though it was not one of the assessment categories, one company is so devoted to innovation that their company credo is “Capitalize on Change.”

Let’s hear it from the employees
Although employer surveys of winning companies produced specific policies, incentives, educational opportunities, benefits and amenities that induce employee loyalty and satisfaction, it was the employee surveys that comprised the real litmus test in determining what constitutes a great company to work for.

Stay tuned for the 2008 competition
Juan Garcia oversees EG’s Research Services Department, one of the largest non-profit HR survey programs in the U.S. He conceived the idea for “California’s Best Places to Work,” and, along with his dedicated research team, facilitated the completion of what is to be an annual program for California employers.

“‘California’s Best Places to Work’ Program recognizes those companies who have demonstrated a healthy, happy work environment,” said Juan, “which is the starting point for productive and enriching relationships between employees and their companies. Not only do both employees and their employers benefit, but so does the community at large.”

Conclusion
Mark Wilbur, as EG’s President and CEO, wraps it up nicely when he addressed the winners with this: “Employers Group shares your belief that California is one of the best business environments in the country. By participating in this significant program, you are helping to showcase the best practices of the companies that fuel California’s thriving economy.”

What the winning companies have to say
The following are the comments from the winning companies. Clearly, each echoes the themes of innovation, inspiration and continuous improvement.

Large Companies
1st Place - Cox Communications, Orange County/Palos Verdes, is a multi-service broadband communications and entertainment company. “By creating a company culture centered on innovation, personal growth, professional development, recognition and opportunity, Cox is able to attract and retain better talent, grow faster, and compete more effectively,” said Duffy Leone, Senior Vice President and General Manager.

2nd Place - Bingham McCutchen LLP is a national law firm with global capabilities, with nearly 1,000 attorneys in 13 offices (six in California). [This honor] “…reflects Bingham’s spirit and commitment to fostering a positive work environment. We take great pride in investing in our people to cultivate growth and success,” said Chairman Jay Zimmerman.

3rd Place - Amylin Pharmaceuticals, Inc., is a San Diego-based biopharmaceutical company. “The talent and commitment of Amylin’s employees are vital to the company’s success in bringing to market innovative medicines that make a meaningful difference – that is why we show up every day,” said Dan Bradbury, President and CEO. “At Amylin, we have the unique opportunity to translate science into medicines that improve the health of society – and that inspires our employees.”

4th Place - Palomar Pomerado Health. Headquartered in San Diego, Palomar is the largest district hospital system in California. “Being recognized…is a strong testament to the dedication and hard work of our physicians, nurses and employees…it’s a part of our culture to take time to listen to our employees, build them as leaders, and foster an environment that is compassionate and innovative,” said Michael H. Covert, FACHE, President and CEO.

5th Place - Sun Microsystems, Inc. Guided by a singular vision – “The Network is the Computer” – Sun Microsystems, with headquarters in Santa Clara, develops the technologies that power the global marketplace. “Across the world and in all fields, Sun’s 33,000 employees demonstrate the courage and passion needed to deliver game-changing innovation,” said Jonathan Schwartz, CEO and President of Sun Microsystems.

Medium Companies
1st Place - Lockheed Federal Credit Union. Headquartered in Burbank, LFCU, is one of the strongest credit unions in the nation with over $2.6 billion in assets. CEO Dave Styler said, “I consider this recognition ... a tribute to all our employees, who create and sustain our terrific working environment. Whoever said, ‘the worst day of fishing is better than the best day at work,’ never worked at Lockheed Federal Credit Union.

2nd Place - Seacrest Village Retirement Communities in the San Diego area is a leader in the senior housing and healthcare industry – caring for seniors who range from the active to the frail in a supportive environment that enhances quality of life. “Providing quality care to our residents in a warm and supportive environment would not be possible without the compassion and dedication of our team,” said CEO Pam Ferris.

3rd Place - Mitchell Silberberg & Knupp LLP. This Los Angeles-based century-old law firm offers litigation, corporate and tax counsel to a variety of prominent businesses. “…[we are] dedicated to the idea that superlative work can best be accomplished in an environment that is respectful, collegial, caring and fair…and responsive to the needs of the people who work here,” said Thomas P. Lambert, Managing Partner.

4th Place – Nicholas-Applegate Capital Management is a diversified, global investment firm based in San Diego that delivers value offering investment solutions to institutional clients. “This award affirms the hard work and dedication of our employees to build a strong culture, which ultimately benefits the clients who entrust their investments to us,” said CEO Marna C. Whittington, Ph.D.

Editor’s Note: The HR folks at this company conducted a raffle to draw the names of seven employees who won attendance at the Gala Event on February 28 in Beverly Hills to hear their company announced as a winner. The raffle winners did not know what the event was about until they arrived the evening of the event!

5th Place - Provide Commerce is one of San Diego’s leading e-commerce companies, delivering high-quality, perishable products straight from the supplier to the consumer at a better value. CEO Bill Strauss said, “This award comes from our employees…For them to rate their experience here so positively while continuing to accomplish so many great results for our business is the best award we can receive!”

Small Companies
1st Place - Motorcycle Industry Council is a not-for-profit, national trade association located in Irvine, representing the many diverse aspects of the powersports industry. “For most riders, motorcycling is about passion, freedom and feeding the soul. While we operate and manage a real business here, that sense of personal fulfillment and sharing a great experience remains at the root of everything we do,” said Tim Buche, MIC’s President.

2nd Place - Western Pump, headquartered in San Diego, is a fully integrated, award-winning petroleum and lubrication systems firm specializing in the construction and servicing of fleet fueling facilities, aviation, retail service stations, convenience stores, and vehicle maintenance facilities. “The credit … truly belongs to all the innovative men and women who make up the workforce, and who have been instrumental in creating and maintaining our great workplace environment,” said Dennis Rethmeier, Owner and President.

3rd Place - Glovis America, headquartered in Costa Mesa, this national automotive vehicle logistics and freight forwarding organization started out five years ago in a trailer behind Hyun-dai Motor America, and now has satellite offices in 10 states. “We’re pleased to be recognized for the efforts we put forth to guarantee our staff is given the best possible environment to work in and for the contribution that our employees have given in return…,” said CEO Glenn Clift.

4th Place - Aspen Medical Products, Inc., in Orange County designs, develops and markets orthopedic products used for rehabilitative purposes, post-surgical stabilization and pain management. Daniel J. Williamson, President and CEO, said, “This achievement would not have been possible without the hard work and dedication of Aspen’s employees.”

5th Place - Olivenhain Municipal Water District is a municipal water district located in Encinitas, CA (San Diego County). According to Operations Supervisor Tom Kennedy, “This recognition reflects the commitment of the District’s Board of Directors, Management, and staff to develop a work environment that enhances personal growth and balance, while remaining focused on meeting the needs of our community.”

Growing Companies
1st Place – MortgageIT On January 3, 2008, subsequent to being selected as a first-place winner in this category, this company was acquired by Deutsche Bank. As a result, MortgageIT, a residential mortgage real estate investment trust (REIT) located in San Diego, is now part of a much larger organization serving the residential mortgage market throughout the U.S.

2nd Place - Sequoia Communications, based in San Diego, is a semiconductor company focusing on multimode RF solutions. President and CEO David Shepard said, “In today’s workplace and, specifically in our market, skilled professionals have countless choices when it comes to employment…we are honored to have our staff validate our success as an employer.”

3rd Place - Veterinary Cancer Group, located in Orange County (Tustin), this is a comprehensive cancer treatment center for pets specializing in medical and radiation oncology. “My first thought was Wow! I was shocked and awed that we actually won. My second thought was validation. …We can only get better from here,” said Dr. Mona Rosenberg, Owner and Founder.

4th Place - Peartrees Catering, Inc. is a catering and event planning company located in San Diego, featuring a state-of-the-art 8,000-square-foot facility that produces quality events for parties of 2 to 10,000. President, Jerry Siegel said, “We are very pleased to have been selected as one of California’s Best Places to Work. Our company’s policies have evolved with the input and direction of all our employees.”

5th Place - Materia, Inc. This Pasadena company was founded to commercialize olefin metathesis catalyst technology, and holds the exclusive worldwide rights to the Nobel-Prize winning catalyst technology. Michael A. Giardello, President and CEO, said, “We place a high value on our employees…we strive to provide our team members with an enabling work environment and a compensation package reflective of their contributions to our efforts.”

(Editor's Note: For more information about EG's "California's Best Places to Work" program, please go to: www.employersgroup.com/cabest.)

HR “Goes Green”
Eco-friendly workplaces offer benefits

What organizations are doing
There are many steps that organizations can take to affirm their position as being green. Employers are taking action to reduce daily consumption of resources, finding more energy-efficient means of doing business, and better means to restore business resources.

According to the Green Hotel Association, many hotels have reduced their daily consumption of resources by using daylight in restaurants and bars for as many hours of each day as possible. Hotels are renting or loaning bicycles to guests as an alternative to car rentals. Additionally, one hotel is recycling stained tablecloths into napkins, chef’s aprons and neckties.

Benefits of “going green”
Organizations have found that going green has other benefits, such as reducing overall costs within the business. A company in Torrance, California, projects to have saved $130,000 by installing high-efficiency fluorescent lights and equipment at its facility. Employers have reduced energy costs by about $20 per month for each computer by using smart power strips. Smart power strips reduce idle current by knowing when a PC is shut down and turning off computer peripherals.

Employers have also noted that using equipment that uses fewer toxic materials and more recycled components has also increased profits. Recently, toy maker Hasbro, Inc., has seen sales increase and also avoided bad press regarding the lead-related recalls in 2007. Cities such as Santa Monica, Berkeley, and San Diego have green cleaning programs, substituting traditional cleaning products with environmentally safe alternatives. Eco-friendly products save about 5% annually in supply costs.

Another benefit of going green is having healthier employees. Using eco-friendly products has been found to reduce illnesses and injuries in the workplace. Employers have discovered employees have fewer occurrences of eye injuries, skin irritations or burns, nausea, headaches, and lung damage with green products. These products promote cleaner air, which can reduce allergies for employees. Not all of these products are lower in cost, yet the derivative effect is lowering costs elsewhere. Employers are rewarded with less sick or down time due to work related injuries. An injury caused by an adverse reaction to cleaning chemicals may cause a janitor to lose about 18 hours off the job, and the company about $600 per injury.

Employees are found to have less illnesses, adverse reactions to their work environment, and injuries on the job. Employees are more likely to portray an overall positive attitude towards their company as well as more loyalty, translating into sustained retention.

No longer just about recycling
Today, employers have gone beyond the low cost of recycling paper goods and low-flushing toilets. Employers are taking a look at all departments within their company to find ways to reduce their carbon footprint. (Carbon footprint is the measure of the amount of carbon dioxide or CO₂ emitted through everyday operations and consumption.)

IT departments (including Employers Group’s) take on projects to recycle old computers and equipment. Safe disposal services will responsibly dismantle and recycle electronic equipment for a fee, while some products may be at no cost. Organizations have turned to using rechargeable batteries as well. The Rechargeable Battery Recycling Corporation has a service that will recycle used rechargeable batteries at no cost.

Companies that invest larger sums into green programs are seeing just as large returns. General Electric invested $700 million in cleaner technologies. Their Ecomagination program was launched in 2005 and recorded revenue in the first year from the sale of energy-efficient and environmentally advanced products and services that reached $10.1 billion.

Small steps count
Small steps can create a greener world. This year, Employers Group took steps to create a greener office by not ordering office calendars and using Outlook Calendars exclusively to manage employees’ schedules. We also encourage the use of coffee mugs, double-sided printing and copying. Additionally, we don’t print out PowerPoint presentations for company meetings, but make them available on shared drives or email them to participants.

Here are some ideas that can be started at your company today, with little or no cost to you:

• Purchase refillable ink cartridges;
  
• Install high-efficiency fluorescent lights;
  
• Add high-oxygenating plants;
  
• Enable “sleep” feature on computers and equipment;
  
• Offer incentives for carpooling and working from home, and
  
• Offer teleworking and flexible scheduling.

Going green is in the eye of the beholder, which means your organization can be creative and innovative in its approach. Enlist everyone in your organization to champion the movement toward making positive choices to enrich, renew and reduce people’s adverse impact on the environment. Whether companies put together large formal eco-programs, or begin with small programs, the companies that “go green” really do help. Your employees will thank you – and your company will be doing its part for an eco-friendly planet.

For further information on how your organization can “Go Green” go to the Natural Resources Defense Council at www.NRDC.org.

Salary Basis

We regularly field calls on our Helpline about the rather confusing, but fundamental, concept of paying an exempt employee on a salary (as opposed to hourly) basis. Compounding the problem, the rules regarding how fixed the salary must be are not exactly intuitive, and the consequences of noncompliance can be severe – at least in the case of class actions.

Exempt v. Salaried
Much confusion stems from the terms “salary” and “exempt,” and while the terms are often used synonymously, they do not mean the same thing, at least to the Division of Labor Standards Enforcement. An employer may always elect to pay an employee a guaranteed salary; however, unless the employee qualifies as exempt from overtime (under the appropriate Wage Order here in California), the employer must pay not only the agreed-to amount but also any overtime the employee works as well. These employees are more accurately referred to as “salaried non-exempt” employees. Because this classification represents a lose-lose proposition to the employer (a fixed salary cost in addition to overtime costs above and beyond the salary), this classification is generally disfavored by employers.

An exempt employee, by contrast, is “exempt” from the obligation to pay overtime. The employer need only pay them their fixed weekly salary, regardless of the number of hours the employee works in day or week. There are two tests the employee’s job must pass before they may be classified as an exempt employee. First, the employee must meet the duties test, meaning the employee’s job duties fall under the categories listed in Section 1 of the Wage Order (e.g., professional, etc.). Second, the employee must be paid on a fixed salary basis.

Salary basis
The FLSA and its regulations, as well as state law, dictate just how “fixed” the salary must be for the employer to continue to pay an employee a set weekly amount, exclusive of additional overtime obligations. The analysis starts with the requirement that any work an exempt employee performs in a workweek entitles that employee to their full week’s salary.

The analysis does not, however, end there. An employer may deduct from that weekly salary when permitted – but only when permitted – by regulations established at the federal level by the U.S. Department of Labor and adopted (and in some cases, rejected) at the state level by the DLSE.

Deductions from salary
Deductions from a fixed weekly salary are either in the form of: (1) a deduction from the salary itself, or (2) merely a deduction from the exempt employee’s available paid leave bank (e.g., vacation, sick leave, etc.). In both cases, wage and hour laws place limitations on how those deductions may be made. Deductions from an exempt employee’s salary may never be made except in full-day increments. If any employee works any portion of the workday, an employer may not deduct from their salary for the partial day worked. In addition, the employee’s absence from work must be for a reason that allows for a deduction. If the employee’s full-day absence is for a reason the law does not permit a deduction, the employee is entitled to continue being paid their salary through the rest of the week.

Permissible salary deductions
One permissible reason to deduct from an employee’s pay (versus paid leave banks) is when the employee works any portion of the workweek and then absents himself/herself for personal reasons. The classic example is a new hire who has yet to earn any vacation but wants to take their family to Disneyland for a full day. Provided the employee does not return voicemails or perform any other work between rides, the employer may deduct a full day’s wage from their weekly salary.

A second permissible reason to deduct from an employee’s wage is if: (1) the employer has a bona fide sick leave policy that compensates exempt employees for sickness or disability, and (2) the employee is not yet eligible for the program or has already used up all their allotted sick days. Under this deduction, if the employee were to go home sick midday, for example, the employer would continue to pay their weekly salary for that partial day worked; however, if the employee was out sick the remainder of the week, the employer would be permitted to deduct full days missed. Of course, as stated above, employers without a bona fide sick leave policy for their exempt employees may not make any deductions from the weekly salary.

Third, employers may make full-day deductions from an exempt employee’s salary at the beginning and end of their employment, if those employees start or end working mid-week. In other words, if a new hire starts work on a Wednesday, the employer may deduct from their weekly salary for the Monday and Tuesday not worked, and if an employee quits on a Tuesday, for example, employers needn’t pay through the rest of the week.

Prohibited salary deductions
A fourth reason employers may deduct from an employee’s salary at the federal level is not permitted in California. The federal FLSA regs were recently revised to permit deductions when an exempt employee is suspended for a partial workweek for violating a written work rule (e.g., a sexual harassment policy). California has yet to embrace this rule, which means that if California employers wish to suspend exempt employees for a partial workweek, the suspension is a paid one. The same applies to suspensions for violations of health and safety policies.

Another prohibited deduction commonly arises when employers attempt to administer their paid holiday policies. Many employers do not offer employees paid holidays until the completion of an introductory period – exempt and non-exempt employees alike. The problem, however, is that employers may not deduct from an exempt employee’s weekly salary when the employer – and not the employee – is triggering that absence from work, even new hires. The employee is not absenting themselves for personal reasons, which would be permitted; rather, the employer is the one shutting down operations that day.

The regulations also address specific reasons an exempt employee might be absent full days but an employer may not deduct from an exempt employee’s salary. These include absences brought on by: jury duty, military leave, and attendance as a witness. Until employees miss an entire week fulfilling any one of the above obligations (i.e., a lengthy trial), the employer must not carve out of their weekly salary.

Deductions from paid leave banks
As opposed to deductions from an employee’s salary, employers must also be careful how they deduct from an exempt employee’s available paid leave banks. Most recently, California clarified how these deductions may be made in the case of Conley v. PG&E.

Before the case was decided, the DLSE took the position deductions from vacation banks could only be made in full-day increments (identical to the rule on deductions from an exempt employee’s salary). The court, however, sided with the employer and their policy that allowed for half-day deductions. Employers who wish to deduct from an employee’s bank in increments any smaller than four hours should consult legal counsel.

Deductions may also be made from sick leave banks in less than full-day increments. Whether permitted or not, Employers Group recommends employers never make deductions in less than half-day increments. Exempt employees who feel “nickeled and dimed” by the administration of their leave banks tend to respond by thinking in hourly terms themselves, and move closer to working 40 hours a week and no more than that.

Blackberries on vacation
One of the more compelling issues in the administration of salary basis happens when an exempt employee takes their Blackberry or other portable device on vacation with them, or calls their administrative assistants to ensure operations continue running smoothly while they are out. This action constitutes work, triggering the weekly salary obligation, and each day the employee responds to e-mails or returns calls, no deduction may be made from their salary or vacation bank.

Remind employees that when they are on vacation, they are not to call in. The company will contact them if it is necessary for them to follow up with anyone.

Safe harbor
The penalty for improper administration of the salary obligation is typically the loss of the exemption, meaning employees are entitled to the overtime they worked from the point the exemption was compromised going forward. The DLSE has indicated in its Enforcement Manual that provided the employer, acting in good faith, still nonetheless makes an inadvertent error, the exemption need not be lost provided the employer reimburses the employee and commits to compliance going forward.

For this reason, employers are well advised to implement a written “safe harbor policy” regarding the pay of salaried employees that expresses a commitment to compliance and a complaint procedure for employees who question a deduction and promise to reimburse for any inappropriate deductions.

For additional questions or concerns regarding salary basis, please call the Employers Group Helpline at 800.748.8484 (option 1).

New to HR?
How hard could it be?

By general definition, Human Resources are the people that staff and operate an organization. In other words, it is an organizational function that deals with people. You read the definition and say to yourself, I love people. How hard could it be?

You are so excited because you just started your job as a Human Resources Generalist. It’s your first day and so far so good. But as you were ready to bite into your energy bar, the phone rings and it is the Vice President of Product Development. He welcomes you to the company quickly, but rushes into what he needs from you. He is desperate to hire four people for his department – people he needed yesterday!

As you hang up the phone, you notice that you have messages in your voicemail and they sound something like this: One, “Several employees in my department are complaining because one employee has severe body odor.” Two, “The employee I just hired a month ago just told me she is pregnant and I want to fire her.” Three, “I have an employee who just showed up to work for the first time in a whole week.” Four, “I think my employee is using drugs.” And, last but not least, five, “My employee is having an affair with a co-worker.”

Are you prepared?
All of a sudden your first day has turned into a nightmare, and it’s not even ten o’clock. Welcome to the real world of Human Resources! Your definition of HR has just been changed from a function that deals with issues related to people to those related to compensation, hiring, performance management, organizational development, safety, wellness, benefits, employee motivation/re-tention, communication, administration, training and employee relations.

There is much more to HR than recruiting the hottest talent. As a Human Resources Generalist, you wear many different hats. One minute you may be negotiating your company’s employee benefits package, and in the next, you’re assisting your vice president with a termination.

The real questions you need to be asking yourself if you want this career are:

• Do I enjoy changing gears on a moment’s notice?
• Do I consider myself fairly flexible?
• Am I open to learning about areas in which I currently have no expertise?
• Am I comfortable leaving a project unfinished to handle emergency situations?
• Can I handle different types of personalities?
• Can I keep things confidential?
• Do I have strong communication skills?

If you answered “yes” to all of the above questions, you are in the right place. You will need to keep things running smoothly when your boss is gone. You will need to learn how to prioritize multiple tasks better when everyone wants it now. You will be working with multiple personalities, so you will need to tweak your working style to match up with all the levels of management. Sometimes we are asked to do things that really don’t follow company policy, or even violate law, so you will also need to learn when you should stick your neck out without getting it chopped off.

For a lot of us, the HR opportunity just fell into our laps. We might have been working in a different career until someone in the company said to you, “We need someone in HR – and you are a people person!”

Courses to take that can help
To survive HR, you need to have several courses underneath your belt. I recommend you attend a course in Employee Recruitment and Selection. This type of course teaches job analysis, behavioral interviewing, candidate assessment, background investigations, legislative compliance, and equal employment opportunity.

The second course I recommend is Law and Employee Relations. Especially in California, the changing nature of laws governing employee relations and escalating damage awards demand that management clearly understand workplace regulations. You need a solid foundation in current federal, state and local regulations applicable to the workforce. Generally this course includes laws related to hiring, promotion, wages, discipline, documentation, record keeping, privacy and grievances. This helps you achieve compliance and maintain management control.

The third course would be Employee Benefits. Familiarity with the fundamentals of employee benefits is essential for your success in HR, including profit sharing plans, COBRA, health and life insurance options, compensation plans, pre-tax deductions, paid time off, employee assistance programs and methods for funding employee benefits.

Network with other HR folks
The last course you need to take does not exist. I would call it “How do I keep my sanity in Human Resources!” Time and experience will help you, but I recommend that you surround yourself with other HR professionals and associations to help you along with the questions that no text book can teach you.

So, in those moments when it seems that you may be under appreciated, remember that you are the glue that holds departments and companies together. You are no longer defined by the old definition of a “personnel manager,” but as strategic partner. So go ahead and answer that call, and begin a new day in the ever-changing HR world.

Will the Federal Budget Affect UI Surtaxes?

Once again, the uncertainty of the economy could affect Unemployment Insurance in dramatic fashion. When the Federal Government first imposed the FUTA 0.2% surtax it was to be a temporary tax. The reality is that as it has come up to vote over the years the surtax has been extended.

The Budget Proposal for 2009, which the President has presented to the Congress for consideration, contains a provision to extend the FUTA surtax through 2009, providing an additional $1.9 billion in federal revenue. This tax is charged to employers and is in addition to the regular FUTA tax, assessed at 6.0% for 2008, and the State Unemployment Tax (SUTA/SUI), which is the sole burden of employers.

Of the monies expected to be raised through the continued implementation of this tax, over $172 million is earmarked for administration of the unemployment insurance program. Should this provision pass, employers will be faced with a tax burden that can only be viewed as arduous.

Thus, this is a time when employers need relief from unnecessary and unwarranted taxes so they can reinvest in their businesses, retain employees, and help keep the economy moving forward.

In an effort to stimulate the economy, some Congressional members have been seeking an extension of the number of weeks a recipient can receive unemployment insurance benefits. Currently, the maximum number of weeks benefits can be paid is 26 out of a 52 week benefit year.

As contained in various proposed bills, the weeks could be extended an additional 13 to 20 weeks over and above the basic 26 weeks. The tax rate to trigger the extension could go as low as 4%, which would affect companies who have successfully managed their unemployment insurance costs.

Some bills have also called to include claims where the benefit year ended the early part of 2007. This would allow payment of benefits to individuals who filed as far back as early 2006. Bills passed containing these provisions would dramatically increase unemployment insurance costs to employers.

To answer the question posed in this article’s headline…to date, consideration of the various stimulus packages has been blocked. The vote was close, which means any of them could be reintroduced in the future. In the week ending February 2, 2008, the four-week moving period showed an increase of 8,500 claims over prior weeks. If national initial claims levels rise at a significant and/or consistent level, this issue could resurface at any time.

FMLA News
Two recent developments…

DOL Proposes New FMLA Rules
Last month, the U.S. Labor Department provided a comprehensive revision of the procedural rules governing the Family and Medical Leave Act (FMLA). FMLA guarantees a worker 12 weeks of unpaid leave for a major illness or the birth or adoption of a child, or to nurse an ailing relative.

The changes are based on the DOL’s 15 years of experience administering the law, two studies of FMLA, and several U.S. Supreme Court and lower court rulings, as well as public comments (which included complaints from employers).

The new proposals, intended to update and streamline the law, are relatively minor from an employer’s point of view. They would give employers more leeway to verify that people taking medical leave are actually sick. For example, doctor certification must meet more stringent criteria than generic doctor letters.

The proposed rules address such other issues as an employee’s duty to request FMLA leave in advance, employer notification requirements, releases and waivers of FMLA claims, and responsibilities of joint employers.

The new regulations are neither final nor official, and the Labor Department is inviting public comment for 60 days (due on or before April 11, 2008), and may possibly revise the proposed rules in the upcoming months. To submit comments, go to http://www.regulations.gov, and follow the instructions for submitting comments.

The Family and Medical Leave Act and National Defense Authorization Act for FY 2008
On January 28, 2008, President Bush signed into law H.R. 4986, the National Defense Authorization Act for FY 2008 (NDAA), Pub. L. 110-181. Among other things, section 585 of the NDAA amends the Family and Medical Leave Act of 1993 (FMLA) to permit a “spouse, son, daughter, parent, or next of kin” to take up to 26 workweeks of leave to care for a “member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness.”

The provisions in the NDAA providing this leave are effective as of the date of the President’s signing. The Department of Labor is working quickly to prepare more comprehensive guidance regarding rights and responsibilities under this new legislation. In the interim, WHD will require employers to act in good faith in providing leave under the new legislation. Because the NDAA amends the FMLA, FMLA-type procedures should be used as may be appropriate (for example, procedures regarding substitution of paid leave and notice). The NDAA also permits an employee to take FMLA leave for “any qualifying exigency (as the Secretary [of Labor] shall, by regulation, determine) arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the Armed Forces in support of a contingency operation.”

By its express terms, this provision of the NDAA is not effective until the Secretary of Labor issues final regulations defining “any qualifying exigency.” DOL is expeditiously preparing such regulations. In the interim, DOL encourages employers to provide this type of leave to qualifying employees.

There is a new posting requirement insert pertaining to the new FMLA/Military leave. The following link is to the notice: http://www.dol.gov/esa/whd/fmla/NDAAAmndmnts.pdf

Employee Benefit Liability under ERISA

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!

Background
Insured employee benefits programs are governed under a federal law know as ERISA – Employment Retirement Income Securities Act. The development history of ERISA is a long one. It goes back to the 1920’s after the adoption of the federal income tax. Congress allowed “qualified” retirement plans special tax-favored treatment – which continues to the present day.

The development of pension plans was almost stopped due to the Great Depression of the 1930’s. In 1935 Congress passed the Social Security Act, which allowed employers that offered qualified plans the ability to tax deduct its contribution to the plans. In the 1940’s, as the world was at war, employers moved large amounts of monies to these plans because they were exempt from wartime wage controls. As these plans evolved, defined benefit programs became popular. A defined benefit plan promises “a defined dollar amount of benefit" to the participant at the time of retirement – an income for life. However, as these funds grew very large, financial abuse soon followed.

The Studebaker case
As abuses against workers, especially older ones, became more prevalent, there was great concern. Then came the Studebaker issue. Studebaker – an American company, over 100 years old in 1958, shut its South Bend, Indiana plant down on December 9, 1963. Thousands of employees immediately lost their jobs and due to the way the pension plan had been set up, most employees only received a small fraction of the defined benefit that was promised them, or nothing at all. That event caused Congress to take a look at a federal law, which would govern such plans. That law, ERISA was signed into effect in 1974. Now, you are probably asking how this impacts my employee benefits plan? You are not alone in this question.

What is ERISA?
ERISA is the basic law designed to protect the rights of participants and beneficiaries of employee benefit plans offered by employers, unions and the like. ERISA imposes various qualification standards and fiduciary responsibilities on both welfare benefit and retirement plans, and provides enforcement procedures as well. Our industry is usually focused on the retirement plan issues due to the origin of the law. However, the law clearly names welfare benefit plans, which can include life, accidental death and dismemberment, medical, dental, disability, vision, mental health programs and many more. So if your company offers a welfare benefit plan(s), then ERISA applies. The law is designed to protect participants and beneficiaries.

Applying the history lesson
The history lesson is important due to its impact on the administration of plans today. The liability of proper administration of employee benefit programs rests with you, the company – not the insurance carrier. Most clients are unclear on this issue.

For example, let’s say that the accounting department forgets to enroll the employee that just became eligible for health insurance on 1/1/08. That employee goes to the doctor on 2/15/08 and finds out that he has cancer. The error is discovered, but the carrier refuses to cover the condition due to the fact that he is a late entrant to the plan. He had no prior health insurance and enrolled in the PPO plan. While this is all getting sorted out, the employee needs to seek immediate treatment and incurs a lot of medical expenses.

As we reviewed above, under ERISA law, the plan (company) is liable for the expenses that would have been paid to the doctors if the health plan does not agree to cover this employee. In this example, the company is responsible for bills of several thousands of dollars due to an error that occurs more often than not!

Many companies think that if they have a fiduciary liability policy, then it would cover this type of expense – no such luck! Fiduciary liability comes into play with retirement plans (401k/Pension Plans), and depending upon how the policy is written, does not include any damages that would result as improper administration of the health/welfare benefit plan.

Protecting your company
There are a few ways that a company can protect itself from additional costs in this area. First, buy an Employee Benefit Liability Policy. The premium is inexpensive and would protect assets in the event of an error. Your employee benefits consultant, or your risk consultant, should be able obtain information on this for you.

Second, make sure that you are working with an involved broker and/or consultant in helping you set up and administer your employee benefits program.

Third, make sure that the person in charge of administering the employee benefit program internally in your company understands the importance of the role and receives some additional training on how to do this properly. There are many training resources available – classroom based, on-line. For example, Employers Group offers many exceptional courses in this area. The investment of time for the person charged with the administration of this valuable company benefit is well worth it!

Medical Marijuana Use is NOT Protected at Work

An employee in California was terminated when he didn’t pass a pre-employment drug screen for testing positive for the use of marijuana, even though he had a valid medical prescription for the use of marijuana. He claimed that the company had violated California’s Fair Employment and Housing Act (FEHA) and the Compassionate Use Act (CUA) of 1996.

The California Supreme Court decided that the employer was not required to accommodate an employee who used medically prescribed marijuana, and that there was no violation of public policy when the employee was terminated. The CUA gave the employee a defense in a state criminal prosecution, but did not override an employer’s ability to deny employment in conformity with the federal Comprehensive Drug Abuse Prevention and Control Act (CDAPA) of 1970. Opponents of the Court’s decision may seek to enact more specific employee job protection legislation in order to circumvent the decision in Ross v. RagingWire Telecommunications, Inc. (2008).

On September 10, 2001, RagingWire Telecommunications, Inc., (the company) offered Gary Ross a Lead Systems Administrator position. Prior to employment, the company requires employees to take a drug test. Ross gave the clinic a copy of his doctor’s medical marijuana prescription before he took the test on September 14. After the test, he started work on September 17. Subsequently the company was informed that Ross failed the test, when he showed positive for the use of tetrahydrocannabinol (THC) – marijuana.

Ross explained to the company Human Resources Director that he used marijuana for medical purposes to relieve his chronic back pain. He was told that the company would call his physician, verify the recommendation, and then let him know what the company decision would be regarding his employment. On September 25th, Ross was fired for his use of marijuana.

Ross suffers from strain and muscle spasms in his back from injuries he received in the U.S. Air Force. Under the FEHA, he is considered a qualified individual with a disability and receives disability benefits. He started to use medical marijuana in 1999, to relieve pain in accordance with his physician’s recommendation and with CUA requirements. He claims that his use of marijuana does not interfere with his ability to perform the essential functions of his job, and that he has worked in the same field since he began to use marijuana and has performed OK, and has had no complaints about his job performance.

Ross claimed the company violated the FEHA by discharging him without reasonably accommodating his disability. The FEHA establishes a state public policy against discrimination in employment.

The California Government Code section 12940, states that “[i]t shall be an unlawful employment practice ... (a) For an employer, because of the ... physical disability [or] medical condition ... of any person, to refuse to hire or employ the person ... or to bar or to discharge the person from employment...” However, an employer may discharge or refuse to hire someone who, because of a disability or medical condition, is not able to perform the essential duties, even with reasonable accommodations.

The Compassionate Use Act of 1996 (CUA) was added to California law (Health & Saf.Code, § 11362.5) by voter initiative - Proposition 215. Basically, it permits marijuana use for medical purposes with a doctor’s prescription. Compliance with the CUA procedures will give a person a defense to some state criminal charges, i.e., drug possession. Federal law (21 U.S.C. §§ 812, 844(a)) still prohibits the possession of marijuana, even those covered by the CUA.

Ross asserted that it would violate the FEHA to fire an employee who uses insulin or Zoloft. Therefore, he claims, “it violates [the] statute to terminate an employee who uses a medicine deemed legal by the California electorate upon the recommendation of his physician.” So, he argues, “the [FEHA] works together with the Compassionate Use Act ... to provide a remedy to [him].”

The Court noted that “Plaintiff’s [Ross’s] position might have merit if the Compassionate Use Act gave marijuana the same status as any legal prescription drug. But the Act’s effect is not so broad. No state law could completely legalize marijuana for medical purposes because the drug remains illegal under federal law … even for medical users… California’s voters merely exempted medical users and their primary caregivers from criminal liability under two specifically designated state statutes. Nothing in the text or history of the Compassionate Use Act suggests the voters intended the measure to address the respective rights and obligations of employers and employees.”

Ross also claimed that he was wrongfully terminated in violation of public policy when the company refused to accommodate his use of marijuana. The Court noted that in order to prevail on that claim Ross must satisfy four requirements: “First, the policy must be supported by either constitutional or statutory provisions. Second, the policy must be ‘public’ in the sense that it ‘inures to the benefit of the public’ rather than serving merely the interests of the individual. Third, the policy must have been articulated at the time of the discharge. Fourth, the policy must be ‘fundamental’ and ‘substantial.’ ”

According to the Court, the CUA “…simply does not speak to employment law. Nothing in the act’s text or history indicates the voters intended to articulate any policy concerning marijuana in the employment context, let alone a fundamental public policy requiring employers to accommodate marijuana use by employees.

“Because the act articulates no such policy, to read the FEHA in light of the Compassionate Use Act leads to no different result. Plaintiff argues that the statutory provision on which a wrongful termination claim is based ‘does not have to ... prohibit the employer’s precise act… Even so, the provision in question still ‘must sufficiently describe the type of prohibited conduct to enable an employer to know the fundamental public policies that are expressed in that law’ … ‘have adequate notice of the conduct that will subject [the employer] to tort liability to the employees [it] discharge[s]’... The Compassionate Use Act did not put defendant on notice that employers would thereafter be required under the FEHA to accommodate the use of marijuana.”

Group Dynamics – Dictate or Facilitate?

I once was asked the difference between a dictator and a facilitator. I learned that a dictator would tell you what the difference is and a facilitator would ask you what the difference is. So I considered myself facilitated!

The ability to facilitate human interaction is useful for anyone in business who needs to get a group of people to participate in a training workshop, a meeting, or a presentation. Facilitation skills also help in resolving conflict, helping teams work smoothly, and dealing with customer or client issues.

Defining facilitation
“Facilitate” means “to make easy or less difficult; to free from difficulty or impediment; to lessen the labor of.” A facilitator makes it easier for a group of participants or individuals to interact, to express themselves. The Trainer’s Professional Development Handbook states that facilitation is a “process by which events are ‘helped to happen’,” and a facilitator seeks “to return power and responsibility to participants for their own learning and to employ more participative, experiential methods.”

A facilitator will allow participants to learn by generating discussion, guiding discussion and maintaining control of the discussion. Although the content of the meeting, training workshop, or other group event is important, it is secondary to the process of participation and discovery that the participants experience. The facilitator’s objective is to draw out the thinking and viewpoints of participants by making it easy for them to engage in a discourse on the topics.

The role of a good facilitator
Good facilitation begins with the facilitator helping group members identify their reason for being in the meeting or training or event: their objectives. All efforts should then be addressed toward meeting those objectives. Participants usually want to know what’s in it for them. A good facilitator gets a group focused on moving toward their own objectives, and creating a strong commitment and interest among all participants.

A facilitator may have a variety of roles to play when working with groups or individuals. First is the role of Process Expert. This means the emphasis is on the process of group learning or interaction and not on content. The group should end up experiencing the learning or solving the problem; the facilitator is the instrument to help them discover their knowledge, skills, and abilities. The facilitator solicits participation from all members, recognizes when the group is bogging down, and re-directs group attention to meeting their objectives.

Second, a facilitator is a Catalyst for the group. He or she gets involved in discussions not to contribute content, but to draw people out, keep meetings on track, and help people reach consensus. The facilitator provides the initial energy to get participants engaged and interacting, but then steps out of the interaction to let the participants do most of the work.

The third role of a facilitator is that of a Meeting Manager who senses when group members are excessively dwelling on issues, when it’s time to stop discussion and start building consensus or making a decision. A facilitator recommends, suggests, or proposes rather than decides, demands, or dictates.

A fourth role for the facilitator is that of a Physician who diagnoses issues raised by the group and determines if the group is focused on the objective or whether the issue is interpersonal and requires conflict resolution. The Physician has to separate the symptom from the malady; to pull the real issue out of someone’s rambling tirade.

Asking questions
The most useful skill a facilitator has is the asking of relevant questions that draw participants into active discussions. The facilitator carefully plans these questions and their possible answers before the event. Good questions are:

1. Clear and concise – “What e-mail practices need to change in this organization?”
   
   
2. Easy to understand when spoken; no clarification is required.
   
   
3. Targeted to create activities that take a significant amount of time for the group to process. For example, “What does this organization need to do to halt the 30% employee turnover rate?”
   
   
4. Worded to cause a participant to have to think a bit before giving a response. “If you could make one permanent change in the behavior of the CEO, what would that be?”
   
   
5. Stated in a way that requires participants to consider their response in terms of their life experiences. “What were the circumstances and your feelings when you had to give someone terribly bad news?”
   
   
6. Expressed so that they produce clear agreement or disagreement among the participants. “Is the group then saying that any management decision is good if the ends justify the means?”
   
   
7. Those questions that generate responses that the facilitator has never experienced. “What’s the worst that could happen in your group if you decided to make that decision to move the production line?”
   

If you want to get the most learning or participation from a group of people, learn how to play the role of a Facilitator, and become a “Master of Questions”!

(Editor’s Note: Learn to facilitate from EG’s facilitators! Contact your client service manager for details.)

Distinguishing Qualities of Women Leaders

Are there differences between how men and women lead others? Results from a recent study conducted by Caliper, a Princeton-based management consulting firm, suggest women leaders are more assertive, persuasive, willing to take risks and have a stronger need to get things done than male leaders.

“We’re looking at a different paradigm of leadership, and it plays naturally to the strengths of women,” says Regina Sacha, Vice President of Human Resources for FedEx Custom Critical. “The tide has turned. The leadership skills that come naturally to women are now absolutely necessary for companies to continue to thrive. It is certainly the reverse of how it was when I first started out in the workplace. It seems like poetic justice.”

About the study
In this study, Caliper conducted in-depth interviews with and assessed the personality qualities of 300 women leaders in Brazil, China, Japan, the United Kingdom and the U.S. Participants included women from such firms as Accenture, Bank of America, Deloitte & Touche LLP, Deutsche Bank, Dun & Bradstreet Inc., JPMorgan Chase & Co. and Johnson & Johnson Co. Inc.

In both a written survey and some follow-up interviews, women leaders shared with enormous candor details of failures and mistakes they’ve made, which could have derailed their careers. They also reflected on what they’ve learned through adversity, and they carried on with more determination, focus and a clearer understanding of their own strengths.

These female leaders were compared to a matching sample of male leaders drawn from Caliper’s extensive database, representing similar industries and job titles. As women demonstrated a higher level of persuasiveness, a stronger need to get things done and a greater willingness to take risks than their male counterparts, these traits combined with their openness, flexibility, empathy and strong interpersonal skills create a leadership style that is inclusive, consensus building and collaborative. Male leaders in the study were also strong in these areas, but the women set an even higher standard.

Lessons learned
According to Dun and Bradstreet’s CFO Sara Mathew, “Leadership is not defined simply by a position, but rather, as the ability to set and articulate a vision and then energize people to go after that vision.”

Sara recalls a defining moment that occurred in an earlier position with another Fortune 500 company. She had decided to completely revamp the firm’s investor relations program and make it one of the best in the country. As part of the presentation of her proposal, she conducted the company’s first-ever live webcast, to which hundreds of investors tuned in. But the webcast fell apart at the seams.

“I did a terrible job,” Sara recalls, “as nearly every major financial publication in the country noted. In an instant, everyone in the industry knew who I was, but not as I wanted to be known. I could go on and on citing what went wrong and, although it was years ago, I can still remember every detail like it was yesterday.”

After that fiasco, her CEO was quite firm about one thing: “We will never, ever, do this again.”

Sara says it probably took her a week or two to pick herself up and see what needed to be done. She knew her window of opportunity had closed, and she had to open it up again.

“The most important time to act is immediately after something goes wrong,” she says. “It’s recognizing the situation and admitting that, ‘yes, I made a colossal mistake.’”

Bottom line – women must play to their natural strengths
So Sara went back and analyzed exactly where, when and how things had gone wrong. She figured out how she might have handled the situation differently, what resources she had within the organization and, most importantly, how to convince her CEO to ignore the media and the stockholders and give her a second chance.

The qualities she ultimately demonstrated – her belief in herself and her cause, her ability to learn from her mistakes, her persuasiveness, her open style of problem solving, her carrying on with a new-found confidence and her willingness to take risks – are the strengths that helped her, and the other women in the Caliper study, succeed as leaders.

Jeannette Lichner, managing partner of Bank of America in the U.K., says, “The strong leadership profile exhibited by these women executives points to the future. The female view that we strengthen ourselves by strengthening others is redefining leadership.”

By playing to their natural strengths, women are, in fact, creating a new style of leadership – one that is conducive to today’s workplace, which draws upon collaboration and teamwork to succeed.

(Editor’s Note: For more information on Caliper’s women leaders study, visit http://caliperonline.com/womenstudy.)