Be warned: Employees want more money in 2015, and some are willing to quit to get it

Looks like employees are feeling a little more confident about asking for more money this year — and a substantial number say they’ll quit if they don’t get a raise.  

That’s the bottom line of a recent Glassdoor survey. The fourth-quarter survey, conducted online by Harris Poll, reveals employee expectations around pay raises and job search activity this year as well as sentiment around pay inequalities.

With employee confidence in the job market at its highest in six years, the survey said, more than two in five (43%) employees report expectations of a pay raise in the next 12 months. If employees do not receive that pay raise, more than one in three (35%) report they will look for a new job.

And nearly half (48%) of employees (including the self-employed) say they’re confident they can find a job matching their current experience and compensation levels in the next six months.

Employees expecting raises also made it clear how much more they expect to get paid in 2015. Half (49%) of those who expect to get a raise in the next 12 months sayd they expect it to be between 3% and 5%. This varies slightly by gender, with more men (52%) than women (45%) expecting that 3% to 5% hike.

And get this: A few respondents — 4% — said they expected a raise between 50% and 100%.

Employees also seem to be sensitive to the gender gap in pay.  Most employees (62%) report they do not believe men and women are paid equally. No surprise here: A stronger majority of women (75%) do not believe men and women are paid equally, compared to half (50%) of men.

Glassdoor’s survey monitors four key indicators of employee confidence each quarter:

  • job market optimism/re-hire probability
  • job security sentiment
  • salary expectations, and
  • business outlook optimism.

Here’s a summary of their latest findings:

Job market optimism/Re-hire probability

As stated, 48% of respondents said they expected to be able to find a similar position in the next six months. This is up 1% from last quarter. Of those unemployed but looking, job market confidence increased 10% to 43% since last quarter (33%), also a six-year high.

Job security

Thirteen percent of employees report concern about being laid off in the next six months, down 2% since last quarter (15%) and also a new six-year low. Nearly one in four (23%) employees report concern about co-workers being laid off, up 1% since last quarter.

Salary expectations

Employee optimism for a pay raise remains high and steady since last quarter, with 43% of employees expecting a pay raise or cost-of-living increase in the next 12 months. This is up 1%age point from last year (Q4 2013), and up 4%age points from two years ago (Q4 2012). Thirty-seven% do not expect a pay raise and 19% don’t know.

Business outlook

More employees (including those self-employed) expect their company’s business outlook to improve in the next six months (43%), up 4% since last quarter. Half (49%) believe their company’s business outlook will remain the same, while 8% believe it will get worse. Men are more optimistic (48%) than women (39%) that business will improve in the next six months.

Docking pay for exempt employees: What’s allowed?

Don’t feel bad if you have trouble understanding the pay-docking rules laid out by the Fair Labor Standards Act (FLSA). The regs are pretty murky.

As a rule of thumb, FLSA doesn’t permit deductions from exempt employees. The regs state that the amount of money a salaried employee earns can’t be dependent on the number of days or hours he or she works. You also can’t deduct money based on the quantity or quality of work the employee produces.

But – no surprise here – there are several exceptions. What happens if your company accidentally makes an improper deduction? Nothing, so long as it’s an isolated incident and the company corrects it. But if there are repeat violations, entire departments of exempt workers can suddenly transform into OT-eligible ones by the magical powers of FLSA.

Permitted and prohibited deductions

Here’s a rundown of the situations in which you can dock exempt employees pay, courtesy of TrackSmart:

  • Exempt employees do not need to be paid for any workweek in which they perform no work.
  • Exempt employees who are absent for a day or more for personal reasons other than sickness or accident. (Note that these deductions must be made only in full-day increments – not for partial-day absences.)
  • Exempt employee absences of a day or more caused by sickness or disability, if the company maintains a plan that provides compensation for loss of salary caused by sickness and disability and the employee exhausted his or her “bank” of leave.
  • Penalties imposed for violation of safety rules of major significance
  • To offset any amounts received by an employee as jury or witness fees or military pay; however, beyond those offsets, deductions may not be made for absences caused by employee jury duty, attendance as a witness or temporary military leave.
  • Unpaid disciplinary suspensions of one or more full days for breaking workplace conduct rules.
  • Partial weeks worked during the initial or final weeks of employment. For example, if Joe resigns in the middle of a workweek, pay him only for the days actually worked in that week.
  • In some cases, when a salaried/exempt employee has worked a reduced or intermittent work schedule under the Family and Medical Leave Act (FMLA). (You can convert a salaried employee to an hourly rate during the time he or she is on intermittent or reduced-workweek FMLA leave without destroying the person’s exempt status.

Red flags

On the flip side, the following deductions are FLSA red flags. These deductions can make a formerly exempt employee eligible to collect overtime:

  • Business trips. You can’t deduct salary (or run the clock on paid time off benefits) for absences related to business trips, and
  • Lack of work. If an exempt employee is ready, willing and able to work, you can’t deduct money for slow times when there’s little or no work assigned.

4 ways the GOP could actually change Obamacare

With Republicans now in control of both houses of Congress, Senate GOP leader Mitch McConnell has publicly vowed to repeal the healthcare reform law at any cost. That’s not going to happen while President Obama has veto power — but there is a very real possibility the Affordable Care Act (ACA) could get a major facelift.  

After all, the president himself has hinted at making some concessions regarding the controversial law.

One of the top changes those in the Benefits world expect to see: A return to the 40-hour per week threshold for defining full-time employees.

Under the current health reform regs, individuals who work at least 30 hours each week must be considered full-time equivalent (FTE) employees for ACA purposes.

In addition to this potential change, here are three additional changes we could see to the ACA.

1. A repeal of the Cadillac tax

For businesses the Cadillac plan excise tax, which takes effect in January of 2018, is one of the most hated provisions in a law that has plenty of despised regs. In fact, employers have consistently listed the Cadillac tax as one of the most concerning Obamacare provisions since the law took effect back in 2010.

As HR pros know, the Cadillac plan reg imposes a 40% tax on the most expensive or “Cadillac” health plans. This will apply to individual health plans worth more than $10,200 and families health benefits valued at more than $27,000, starting in 2018.

Because this tax doesn’t kick in until 2018, Republicans may be able to get the next president to sign a repeal bill between 2016 and 2018. And Democratic supporters of Obamacare may be open to accepting such a repeal bill if it means getting Republicans to keep other key health reform provisions in place.

Another potential scenario Bell says employers should watch for: Opponents of the tax convincing the Internal Revenue Service (IRS) to delay its implementation.

2. Changes to the Medical Loss Ratio (MLR) formula

According to the ACA’s medical loss ratio regs, major medical carriers must spend at least 85% of large-group revenue and 80% of individual and small-group revenue directly on healthcare or quality improvement efforts.

The current MLR formula keeps insurers from including compensation for agents and brokers in medical care spending totals.

But critics have have pushing for years to get broker comp removed from the calculations altogether. Their argument: Consumers are the ones who actually pay brokers; insurers merely collect the payment to the brokers — and streamline the process for customers.

The bulk of the Republicans and many Democrats agree with this stance. Plus, certain state-based public exchanges have been drumming up support from agents and brokers. So you may see the GOP succeeding in making changes to this reg.

3. Required exchange performance reporting

Bell believes the small, less-costly tweaks to the current law will have the best shot at taking effect. One example to watch for: H.R. 3362, the Exchange Information Disclosure Act, a bill that was reintroduced in January and received some significant Democratic support, with Yes votes from Dems who rarely cross party lines.

Among other things, the bill would require the U.S. Department of Health and Human Services to publish weekly ACA exchange activity reports in a specified format.

5 new regs for 2015 you’re going to need to watch

If we had to sum up what federal agencies such as the Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) had planned for next year in just two words, it would be this: New regulations.  

At the Fall 2014 Regulatory Agenda meeting, federal agencies like the DOL and EEOC gave some insight into their progress on the more than 75 rules and regulatory proposals in their queue.

Here are the proposed deadlines of regs that will impact HR pros the most next year:

DOL action items

  1. Changes to the DOL’s overtime rule under the Fair Labor Standard Act (FLSA) by February 2015. Specifically, the DOL will address the FLSA’s “white-collar” exemption, where workers who are paid a minimum salary of $455 per week — and are classified as executive, administrative or professional employees — are not entitled to overtime pay.
  2. New definition of “fiduciary” by the DOL’s Employee Benefits Security Administration’s (EBSAs) by January 2015. The DOL has long been promising a revised definition of fiduciary under the Employee Retirement Income Security Act (ERISA), which would essentially expand the term and significantly impact many aspects of retirement plans.
  3. A final rule revising the definition of “spouse” in the Family and Medical Leave Act (FMLA) to reflect the Supreme Court’s Defense of Marriage Act (DOMA) ruling. The DOL didn’t give a concrete date for this change; it just said it would happen in 2015. On top of expanding who’s entitled to FMLA leave.

HHS, DOL & Treasury’s Obamacare agenda

  1. Final regs on the minimum value of employer sponsored health coverage — for purposes of premium tax credit eligibility — within the next two months. Like all Affordable Care Act guidance, the Treasury will work with United States Department of Health and Human Services (HHS) and the DOL to provide this info. Problems with the feds’ minimum value calculator led to a delay regarding Obamacare penalties and skinny plans.

EEOC’s wellness promise

5. EEOC guidance on wellness plans by February 2015. Following the heavy criticism it received for not issuing guidance but continuing to sue employers for their “involuntary” wellness programs, the EEOC announced it will be issuing proposed regs on the impact the Americans with Disabilities Act (ADA) has on employers’ wellness programs.

Price tag for firing worker because she filed an EEOC complaint: $15K

Note to employers: Firing an employee because she filed a complaint with a federal agency is virtually guaranteed to come back and bite you.

June and Jay Tucker, officials of a corporation that operated a convenience store/gas station in Indiana, will pay $15,000 to a former employee to settle a retaliation lawsuit filed by the EEOC, the agency announced.

According to the EEOC’s lawsuit, Bright Petroleum Inc. terminated Deli Manager Michelle Bunte in retaliation for filing a charge of discrimination with the agency.

The consent decree settling the suit states Bunte will be paid $15,000, and the company will be subject to penalties for late payments. The Tuckers will be prohibited from engaging in any further retaliation against employees who exercise their rights to complain about discrimination or assist in an investigation or discrimination-related proceeding for any businesses which the Tuckers own, operate or manage.

All references to Bunte’s charge and participation in the lawsuit will be removed from her personnel file and not shared with prospective employers of Bunte.

Bunte will also be given a signed letter of reference. The Tuckers will report to the EEOC for a three-year period, detailing their compliance with the decree.

You suspect an employee is using drugs: What now?

You can’t prove it, but the signs are there. So how do you deal with suspected drug abuse without violating privacy rights or making false accusations?

Many would say, “Make it a performance issue. If he’s failing on the job, then tell him he has to shape up.”

OK, that’s good advice, but should you wait that long? If you suspect someone’s spaced out, there are costs – financial and social – associated with waiting.

Here are five ways to be more proactive about potential drug use problems, courtesy of Shepell fgi and Bob Rosner’s best-selling book “The Boss’s Survival Guide”:
1. Look for the signs.

Neither you nor your managers are likely experts at determining when an employee is using drugs. But there are certain signs you can look for that, when taken in tandem, can be more than just performance issues.

They include:

mood changes. Warning signs include employees being irritable, withdrawn, depressed or particularly energetic or talkative after breaks or lunch.
altered appearance. Staffers who previously were well-groomed who suddenly start showing up dressed inappropriately or not having showered should raise some suspicion. Other potential areas of concern: slurred speech, bloodshot eyes and excessive weight loss or gain.
diminishing returns on performance. If one of your employee’s performance starts tanking, you’d be concerned no matter what. But when taken with things like loss of concentration, misuse of equipment and frequent use of sick days, that concern should start to ebb toward suspicion.
problems with relationships. Be on the lookout for employees who are argumentative, uncooperative or accusative.

Clearly any of these problems, when taken alone, can be the result of any problem in an employee’s life. It’s when you start to notice a pattern of several of these that should lead you or your managers to question what’s going on.

2. Document, document, document

Noticing the signs of potential drug use is all well and good, but you’ll need to be able to point to specific instances when an employee’s behavior was just a little off in order to take any action or speak with him or her.

That’s why it’s crucial for managers to maintain specific records of employee performance.

Now, you know managers should already be doing that, and there’s no doubt you’ve trained your supervising team well. But here’s the kicker: Managers cannot include their suspicions in these write-ups.

The whole point of these write-ups is to use them when you eventually meet to discuss the issues with an employee. They must be objective in order to do that.
3. Get professional advice.

OK, so you know the signs of drug abuse now, you’ve filled your managers in on what they could be, and you’ve made sure your supervisors are documenting any and all performance issues (which they should be doing anyway).

Still, you’re not a pro at it. So contact a pro – a doctor or a drug counselor, for instance – just to be sure you’re seeing the real thing, or just something else that looks like the real thing.

And then explore with the pros the possible courses of action for treatment. What’s available? What has the best record of success?

At the very least, you want some professional opinions and backup before you go to the next steps.
4. Approach the person, but not as an enforcer.

You can, if you want, make threats about firing or other drastic measures to address the problem, but that probably won’t solve the problem. Instead, at least in the beginning, approach the person as a concerned colleague.

Explain that you’ve noticed a problem and have consulted professionals to confirm your suspicions. And then attack the problem from the angle that, first and foremost, you want to help the person.

5. Present the plan and do what you can to implement it.

You may or may not be working through an Employee Assistance Program, but whatever you do, lay out a plan for the person and your role in it – as a coach or just someone to talk to.

At that point, it’s up to the person to take action. You know how it goes: “You can lead a horse to water, but …”

If the person doesn’t respond properly and performance or on-the-job behavior becomes an issue, you can deal with that under policies and disciplinary rules. But you’ll know that you did your best to keep the problem from getting to that point.

Brace for new OT rules now, says former DOL admin

The FLSA’s new “white-collar” exemptions that are expected to drastically expand who’s entitled to overtime pay should be be released very soon — and a former DOL administrator has offered a sneak peak at what they’ll look like.

Tammy McCutchen was instrumental in drafting the most recent changes to the OT regs (enacted in 2004), she also participated in a number of recent “listening sessions: with DOL Secretary Thomas Perez on the current rulemaking.

And recently, she shared with SHRM Online some advice for employers regarding the upcoming FLSA changes: Start looking at employer classifications as soon as the proposed rule is released.

Why? The proposed-to-final-rule process isn’t likely to include many changes.

That means firms may not have enough time after a final rule is published to make the changes necessary to avoid getting into legal trouble, according to McCutchen.

For employers to ensure they’re in compliance, an internal audit of FLSA classifications may be necessary. And that’s a costly undertaking that needs to be planned well in advance.
Likely and unlikely changes

While employers will have to wait until the proposed rule is published to know exactly what the specific changes will be, here’s what some experts are saying.

Employment attorney and former acting WHD administrator Alfred Robinson, Jr. told SHRM Online a paper funded by the DOL recommended increasing the white-collar exemption’s salary level to $970 per week or $50,440 per year.

In addition, it’s expected the agency will consider adopting California’s requirement that an employee primarily perform exempt duties for at least 50% of his or her work time to be considered OT-exempt.

One thing industry experts believe the rule won’t include: A safe harbor for firms that want to fix violations that were made in a good-faith effort to comply. That means firms have to get classifications right the first time.

Obamacare regs: 3 top compliance killers

The health reform law has been in place long enough for employers’ compliance efforts to lose some steam. But complacency is leaving many firms wide open to problems.

Some of the health plan strategies employers have been using will hurt their ability to comply with the Affordable Care Act (ACA) moving forward.

The Kaiser Family Foundation recently listed some of the top ACA-compliance problems that can sneak up on employers.

The top three:

1. Grandfathered status loss

As HR pros are well aware, grandfathered health plans are exempt from more than a dozen of the major health reform rules, including the prohibition on annual and lifetime dollar limits on coverage, as well as the essential health benefits rules.

But here’s the problem: It’s very easy for previously grandfathered plans to have changed enough to comprise their grandfathered status.

In fact, the Kaiser research found that just 37% of companies still have a grandfathered health plan. That’s a significant decline from the 72% of employers that had at least one grandfathered plan back in 2011.

(Note: If you want to see if your plan is in danger of losing its grandfathered status, check out this eight-factor list.)

2. Extended waiting periods

As of 2014, non-grandfathered health plans are prohibited from making eligible employees wait longer than 90 days for insurance coverage.

However, the report found that more than a quarter (27%) of covered employees face a waiting period of three months or longer. And 4% of workers have a waiting period of four months or longer. That is unacceptable unless coupled with a bona fide “orientation period.”

There has been some confusion about waiting period calculations.

Remember: Employers must count all days — including weekends and holidays — when it comes to calculating the 90 days.

3. Wellness carrots (or sticks)

Another area where employers’ healthcare strategies can get them in trouble: wellness.

According to Kaiser’s research, 19% of employers offer lower premiums, reduced cost sharing or higher health reimbursement account or health savings account contributions to wellness plan participants.

But when employers roll out overly generous incentives (or harsh penalties) they could find themselves in trouble.

The maximum premium reduction/penalty under the ACA is 30% of the value of single-employee coverage — except for non-smoker incentives, which max out at 50%.

The 10 strangest employee sick day excuses, 2014 edition

As the winter season descends, more people start calling in sick. And you won’t believe some of the excuses people have offered as reasons for taking the day off.

A new CareerBuilder survey looks at how many workers have faked being sick this year, as well as some of the strangest excuses they’ve used while doing so.

Over the past year, 28% of employees have called in to work sick when they were feeling well, down from 32% last year. When asked for a reason, 30% said they just didn’t feel like going in to work and 29% said they wanted the day to relax.

Another 21% took the day off to attend a doctor’s appointment and 19% wanted to catch up on sleep. Meanwhile, bad weather was enough for 11% of employees to take the day off.

The national survey was commissioned by CareerBuilder and conducted online by Harris Poll. It included a representative sample of 3,103 workers and 2,203 hiring managers and human resource professionals across industries and company sizes.

While half (49%) of employees say they have a paid time off program that allows them to use their time off however they choose, 23% of those workers say they still feel obligated to make up an excuse for taking a day off.

‘I didn’t mean to get on that plane, honest’

When asked to share the most dubious excuses employees have given for calling in sick, employers reported hearing the following real-life examples:

  • Employee just put a casserole in the oven.
  • Employee’s plastic surgery for enhancement purposes needed some “tweaking” to get it just right.
  • Employee was sitting in the bathroom and her feet and legs fell asleep. When she stood up, she fell and broke her ankle.
  • Employee had been at the casino all weekend and still had money left to play with on Monday morning.
  • Employee woke up in a good mood and didn’t want to ruin it.
  • Employee had a “lucky night” and didn’t know where he was.
  • Employee got stuck in the blood pressure machine at the grocery store and couldn’t get out.
  • Employee had a gall stone they wanted to heal holistically.
  • Employee caught their uniform on fire by putting it in the microwave to dry.
  • Employee accidentally got on a plane.

Employers strike back

Though the majority of employers give their employees the benefit of the doubt, 31% say they have checked to see if an employee was telling the truth in one way or another. Among employers who have checked up on an employee who called in sick, asking to see a doctor’s note was the most popular way to find out if the absence was legit (66%), followed by calling the employee (49%). As many as 15%t of employers went the extra mile (quite literally) and drove past the employee’s house.

Nearly 1 in 5 employers (18%) say they have fired an employee for calling in sick with a fake excuse.

Shooting themselves in the (digital) foot

Some workers have inadvertently busted themselves online. One in four employers (24%) have caught an employee lying about being sick by checking social media. Of those, 22% have actually fired the employee, but 54% were more forgiving, only reprimanding the employee for the lie.

Flip side: People afraid to take sick days

Turns out there are more employees who refuse to take sick days than those who make up fake excuses to get the time off — a majority of workers said they feel they don’t have the luxury to take a sick day.

More than half of employees (53%) say they have gone into when work sick because they felt the work won’t get done otherwise, and 2 in 5 workers (38%) did the same because they can’t afford to miss a day of pay.

‘Tis the season

Employee absentee rates seem to peak with flu season. December is the most popular time of year for employees to call in sick, according to 21% of employers, followed by January (17%) and February (14%).

Despite higher absentee rates during the holiday season, only 8% of employees say they have ever faked being sick during this time. Of those who have, most did it to spend time with family and friends (69%), while others wanted to holiday shop or decorate for the season.

Who takes the most sick time?

Employees in professional and business services called in sick most often (35%) in the past year, followed by closely by sales employees (34%). On the other end of the spectrum, employees in the IT, retail and leisure and hospitality industries were least likely to call in sick this past year (22%, 21% and 20%, respectively).

What GOP Congressional triumph really means for employers

So now Republicans control Congress. Will anything change for employers?

It’ll be an interesting political season, that much we can say for sure. But are real changes coming in employment law? Really hard to say.

Ilyse Wolens Schuman and Michael J. Lotito, writing on the Littler Mendelson blog, note that now that the GOP controls both houses of Congress, both Senate and House committees will be chaired by Republicans. They’re expecting those new chairmen to put the screws to federal agencies like the EEOC, DOL and NLRB.

Like this scenario:

Sen. Lamar Alexander (R-TN), current ranking member of the Senate Committee on Health, Education, Labor and Pensions (HELP), has already released a statement promising to “fix our broken system and move our country in a new direction.” Such efforts will include “put[ting] an end to the Obama administration’s unconstitutional overreach …” Republicans have repeatedly criticized the administration of executive overreach.

Over the past year, the White House has issued several controversial executive orders and presidential memoranda, including the Fair Pay and Safe Workplaces Executive Order, which imposes multiple new risks and obligations on government contractors; Executive Order 13658, which raises the minimum wage for workers and tipped employees of federal contractors; and a memorandum directing the Department of Labor to revise its “white collar” overtime exemption regulations.

The Republican majority may use the power of the purse to rein in such initiatives. Specifically, Senate Republicans will likely rely on the appropriations process to block agency regulations, including those issued to implement the President’s executive orders or directives. Lawmakers could include provisions in funding bills that explicitly bar agencies from using the funds to carry out the contested measures.

Harold P. Coxson, writing on the Ogletree Deakins blog, said he expected a lot closer monitoring of the activities of the National Labor Relations Board, including blocking funding for the NLRB’s so-called “ambush election rules” that would definitely make it harder for employers to fight union organizing efforts.
Potential new legislation

On the legislative front, Schuman and Lotito see the GOP taking aim on Obama labor and employment policies through legislation:

Sen. Alexander and Sen. Mitch McConnell (R-KY), who is slated to become the new Majority Leader, have already introduced the National Labor Relations Board Reform Act, a bill that would, among other things, expand the NLRB from five members to six, three Republicans and three Democrats, as well as require a majority of four members to make a decision to encourage consensus from both sides. The five-year terms of the members would be staggered, and synchronized in pairs, with one member from each political party facing confirmation at the same time.

Other bills could challenge the EEOC’s alleged “overreaching” in its enforcement plan, and, of course, the dreaded Affordable Care Act — Obamacare.

But Robin Shea of Constangy Brooks & Smith doesn’t see big changes coming to the health reform law. First, she points out, while the GOP has the majority in the Senate, it doesn’t have sufficient votes to override an Obama veto:

So even though House Speaker John Boehner (R-OH) and Sen. McConnell are saying they’ll work to repeal or partially roll back the Affordable Care Act, expect to see an actual vote that is largely symbolic. The President is expected to veto any but the most incremental legislation, and the Republicans won’t be able to do anything about it unless they can find six moderate Democrats to join them. Are there any moderate Democrats left after Tuesday?

A recent story in the Boston Globe outlined the parts of Obamacare that Republicans plan on targeting: An unpopular tax on medical devices, changing employer requirements on insurance by increasing the definition of a full-time worker from 30 to 40 hours per week, and eliminating rules that most Americans obtain insurance or face a penalty — better known as the individual mandate.