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Where the human resource worries reside

July 17, 2015
As we all know, trucks are one of the central assets for a wide range of businesses – freight hauling, construction, petroleum and natural gas extraction, so forth and so on.

Yet we also know that without people – drivers, technicians, dispatchers, and, yes, management personnel – trucks won’t go anywhere or do anything.

That’s why a new survey crafted by Littler Mendelson, one of the largest employment and labor law practices in the world, caught my eye; especially in terms of mapping out some of the potential human resource (HR) pitfalls businesses are facing these days.

Conducted in April and May this year, Littler’s 2015 Executive Employer Survey polled 500 in-house counsels, human resource professionals and high-level executives at a variety of large U.S. companies to get a sense of what human resource issues pose the biggest challenges.

And trucking should pay attention, as newly proposed changes to overtime pay rules plus new employee/contractor classification guidance issued by the Department of Labor (DOL) top the HR worry list at U.S. firms.

“Changing the threshold for overtime pay will severely alter management’s outlook on how it fills positions as the drastic salary increase could squeeze out jobs due to payroll increases,” noted Tammy McCutchen, a Littler principal who focuses on labor and wage-hour issues.

“The overtime adjustment and other potential changes from the DOL could cost employers billions of dollars,” she said. “The employer community should take action now to shape the final rule.”

That’s just one of the “myriad of risks” employers are facing near term, Littler’s survey determined – one of those risks being “the fact that compliance officers can wield a big stick,” the firm stressed.

So let’s take a look at what Littler’s poll found to be the most pressing HR issues for U.S. companies right now.

DOL’s proposed changes to overtime pay rules:

Last month, as noted above, DOL said it plans to raise the minimum salary for professionally exempt employees from overtime pay from $23,600 to an estimated level of $50,440 in 2016. Some 64% of those participating in Littler’s survey are concerned about the impact of that rule change.

ObamaCare remains a focus point for employers:

Before the Supreme Court’s landmark decision late last month in King v. Burwell, 55% of those polled said they had engaged or planned to engage with employee benefits attorneys or consultants to help navigate healthcare regulations relating to the Affordable Care Act (ACA), more commonly referred to as “ObamaCare,” which down slightly from 2014, when 58% gave that response.

[FYI motor carriers have noted in previous surveys that health care costs are becoming a major burden on their bottom lines.]

Meanwhile, 18 % of respondents said they were taking a “wait and see” approach in 2015 regarding the ACA, slightly higher than 14% recorded last year.

“The rise in a ‘wait and see’ approach was an indication that employers continued to be uncertain about the fate of the ACA prior to the Supreme Court decision in King v. Burwell,” noted Ilyse Schuman, co-chair of the Workplace Policy Institute at Littler. “Overall, the results show that employers are becoming accustomed to the ACA stipulations. However, employers need to stay abreast of any changes that could impact the ACA as to remain compliant with the law.”

Increased attention on the rights of LGBT employees:

Last month, the Supreme Court announced its decision in Obergefell v. Hodges, finding that same-sex marriage bans were unconstitutional nationwide. Yet well prior to the ruling, many companies had already adjusted workplace policies, with 47% of respondents stating that their companies had put in place policies that directly address issues faced by lesbian, gay, bisexual and transgendered (LGBT) workers. Only 11% said that changes in laws prompted new policies, with 13% noting that their companies intended to make changes to policies within the next year.

“Even before the ruling in Obergefell v. Hodges, it was clear that many U.S. employers had been moving toward creating more inclusive workplaces for LGBT employees,” stressed Mark Phillis, a Littler shareholder. “Now that same sex marriage is legal nationwide, employers should revisit their benefits plans, leave policies, domestic partnership policies and non-discrimination policies to ensure they are treating all their employees equally.”

Greater liabilities due to possible change in joint employer definition:

Employers remain concerned with the potential change to the current joint employer standard as the National Labor Relations Board (NLRB) reviews multiple cases that could ultimately modify the definition. The prospect of this change prompted:

  • 69% of respondents to Littler’s poll register concern about exposure to greater legal liability.
  • 59% of employers expressed concern with the potential difficulty in monitoring the employment practices of separate entities.
“For employers, the burden of having to monitor not only their own employees, but also the employees of subcontractors is especially daunting and has the potential to have a huge impact on industries throughout the country. It is certainly worth keeping a close eye on,” noted Michael Lotito, co-chair of Littler’s Workplace Policy Institute.

“As the NLRB and other agencies continue their enforcement efforts, cost is a continued concern among employers [as] 34% percent of respondents were justifiably concerned that a change from the NLRB on this matter could result increased costs for their company,” he said.

Aggressive government policies put new spin on whistleblowing:

The U.S. Securities and Exchange Commission (SEC) continues to encourage the increase of tips through hefty rewards to those who blow the whistle on their companies, noted Littler, and that’s putting employers in a more precarious position as their compliance officers – nominally tasked to ensure their companies stay within the law and uphold company policies – can now actually profit from unlawful violations, even those that may wittingly contribute to violations.

Edward Ellis, co-chair of the Whistleblowing and Corporate Ethics Practice Group at Littler, noted that this “dichotomy” of duties, while vexing, still only had 16% of respondents concerned that compliance officers will leverage their insider knowledge to secure bounties. And nearly double the number of respondents, some 30%, picked none of the available options in the survey as concerns. Furthermore:

  • Some 22% of those polled by Littler expressed concern that compliance programs will generally be less effective because compliance officers will take lapses straight to the government rather than to executives.
  • Another 22% noted compliance programs would be less effective because individuals will report to government agencies rather than fulfilling job duties.

“These results are surprising as employers should be concerned about each of the issues in the survey,” Ellis emphasized. “There are a myriad of risks for employers should they ignore the fact that compliance officers can wield a big stick. The SEC has made a clear effort to elicit more whistleblowers with proprietary knowledge of their companies’ compliance programs.

An “active” EEOC and discrimination claims in the workplace:

Despite the number of completed systemic investigations by the Equal Employment Opportunity Commission (EEOC) falling to 260 in 2014, down from 300 in 2013, a “healthy portion” of Littler’s survey respondents remain concerned about the EEOC’s investigations and charges:

  • Some 57% expect an increase in charges relating to hiring barriers, including the consideration of criminal or credit histories within the hiring process.
  • Another 37% of employers expect to see an increase in claims arising relating to accommodations for disabled workers.
  • And another 34% expect more charges of regarding equal pay issues to be investigated.

Also, respondents were concerned about claims of retaliation (33%) and charges of age discrimination (32%), noted Barry Hartstein, co-chair of the EEO & Diversity Practice Group at Littler.

“The survey results mirror concerns that the newly appointed EEOC Chair, Jenny Yang, and current General Counsel, David Lopez, recently approved for a new term, will focus on larger, systemic cases in the near term,” he said.

“Employers will continue to grapple with discrimination claims as the EEOC ramps up its enforcement efforts,” Hartstein added. “The concerns expressed in the survey align with what is happening in the courts, such as the Supreme Court’s decisions in UPS v. Young and EEOC v. Abercrombie, or newly minted ‘ban the box’ legislation.”

In short, he stressed that employers “have many issues” impacting their workforce related to discrimination and hiring practices.

That, my friends, is putting it very mildly.

About the Author

Sean Kilcarr 1 | Senior Editor

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