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PTO: The 'Secret Weapon' of Recruiting and Retention

The HR Daily Advisor recently noted that instead of designating employee paid time off as vacation days, sick leave, and such, many employers have started to lump it together and simply call it paid time off, or PTO for short. But there are pros and cons.

The advantages of undesignated paid time off for employers include reduced tracking of employee PTO and, often, reduced employee sick-leave abuse. Many employers use PTO as a strategic recruiting tool, and they also find it to be useful for employee retention.

Increasing the number of days that employees can take off from work and still get paid seems to make workers happy. And, because most employees are healthy and don't ever use all of their sick leave, why not let them take the difference as extra vacation time?

Unfortunately, as we all know, the bad sometimes comes along with the good, and PTO programs can invite abuse.

Abuse #1 — Employees are out of the office more frequently.

Because an organization no longer knows why an employee is taking time off, their employees, in some cases, are gone more frequently. While this can be controlled somewhat by requiring prior approval for PTO, those employees who never used sick leave will start to use at least some--if not all--of that time in their PTO allocation every year.

Abuse #2 — Sick employees are not using sick leave.

One of the most costly abuses of PTO is sick employees not taking time off. That's because when employees begin to view all PTO as vacation time, they don't want to use up their vacation time when they're sick, so they come to work and spread germs. And that results in productivity declines as more and more of the workforce gets sick.

So How Can PTO Be Effective?

Be sure that your company culture suits the flexibility of a PTO program. If your company culture isn’t very flexible, the flexibility of a PTO program may invite abuse. Establishing clear guidelines in advance will help eliminate abuse at some level.

Most important, focus more on managing your employees than on managing the PTO program. If employees are sick, make sure they aren’t in the office. You have an obligation to provide a safe workplace to all your employees. If someone is sick and contagious, send him or her home immediately!

 For years, BLR has conducted surveys on PTO and other employee benefits to find out what HR and benefits professionals saw in the preceding year and what they were expecting in the coming year. This year, we are expanding that program by conducting a series of brief, targeted benefits surveys. The findings of these surveys will be analyzed and presented free to all respondents.

 Current Survey: Paid Time Off

• Does your company have a PTO program? If not, are you thinking of switching to a PTO program?
• Are you confident that your company's program is effective for recruiting talent?
• Is your current program helping with retention?
• Are you providing an adequate number of days?

Take this brief survey and see how your existing practices and future plans stack up against the country’s most successful companies. The survey only takes a few minutes to complete, and it will help you stay on top of your industry and keep your organization competitive.

By sharing your insight, opinions, and experience, you'll help us highlight trends and define benchmarks—by industry, geographic location, and size of employer—that will inform your decision making for the coming year. At the same time, you’ll gain a highly valuable strategic planning tool that will help ensure that your company is offering competitive benefits.

Rest assured that all responses are confidential and only aggregate findings will be published.

Thank you for your valued input.

Here are some of our upcoming employee benefits surveys:

—Benefits for Part-Time Employees
—Relocation and Business Travel
—Incentive Plans / Bonuses
—Disability Plans
—Voluntary Benefits
—Nontraditional Benefits

Complete the Paid Time Off Benefit Survey Now

Are Your Healthcare Benefits Competitive? Find Out Here

Health care is all the buzz these days as the U.S. Senate and House of Representatives try to hammer out the details of the final legislation. Meanwhile, companies are getting walloped by higher than expected healthcare costs just when they can least afford it. And HR professionals are right on the front lines.

Employers are understandably concerned with the hikes in healthcare costs as employees are making more trips to the doctor and dentist, and undergoing more exams, tests, and treatment, all common occurrences during a recession.

Still, healthcare benefits are critical to retaining your best employees and recruiting new ones. Are you offering competitive healthcare benefits to your employees?

Free Healthcare Benefits Survey Results

Take our brief survey to see how your existing and future plans stack up against the country's most successful companies. By sharing your insights, opinions, and experience, you'll help us highlight trends and define benchmarks—by industry, geographic location, and size of employer—that will inform your decision making for the coming year.

At the same time, you'll gain a highly valuable strategic planning tool that will help ensure that your company is offering competitive benefits. Please be assured that all responses are confidential and only aggregate findings will be published.

Complete the Healthcare Benefits Survey Now

Be sure to participate in -- and get the results of -- these upcoming employee benefits surveys:

—Paid Time Off
—Benefits for Part-Time Employees
—Relocation and Business Travel
—Incentive Plans/Bonuses 
—Disability Plans
—Voluntary Benefits 
—Nontraditional Benefits

Are Your 401(k) Benefits Competitive? Find Out Here

Last December, a survey conducted by WorldatWork and the American Benefits Council found that the financial crisis had not significantly discouraged employer 401(k) contributions or participation.

A full 74 percent of employers reported they were planning no change in their matching contribution; 15 percent had either increased or were considering increasing the employer match; 8 percent had either decreased or were considering decreasing the 401(k) match; and 3 percent reported eliminating the match.

 But, as they say, that was then and this is now. Another year of economic turmoil and uncertainty has spurred many organizations to rethink their employee benefits packages. A number of companies have reduced or eliminated their 401(k) matching contributions. Perhaps your organization did—or is considering doing—the same.

But is that the right course? Will your organization be putting itself at a competitive disadvantage?

 It's time to get away from the hearsay and anecdotes, and look at some reliable data. BLR^® is offering you a way to do just that—at no cost, and with with very little effort.

For years, BLR has conducted employee benefits surveys to find out what HR and benefits professionals had seen in the preceding year and what they were expecting in the coming year. This year, we are expanding that program by conducting a series of brief, targeted benefits surveys. The findings of these surveys will be analyzed and presented free to all respondents. And we’re starting with 401(k) benefits.

Today's topic: 401(k)

Employers continue to be concerned about employees’ financial preparations for retirement, the company's role in supporting those plans, and the proper place of 401(k)s as an important tool in overall benefits program design. How confident are you with your answers to the following:

• Are you offering competitive 401(k)/pension benefits to your employees? (Or considering it?)
• Are you confident that your company's plan is effective for recruiting talent?
• Is your current plan helping with retention?
• Are you providing adequate retirement resources?

Take our brief survey and see how your current course and plans for the future stack up against those of the country’s most successful companies.

The survey only takes a few minutes to complete, and it will help you stay on top of the trends in your industry and keep your company competitive.

By sharing your insight, opinions, and experience, you’ll help us highlight trends and define benchmarks—by industry, geographic location, and size of employer—that will inform your decision making for the coming year.

At the same time, you'll gain a highly valuable strategic planning tool that will help ensure that your company is offering competitive benefits.

Don't worry—all responses are confidential and only aggregate findings will be published.

Complete the 401(k)/Pension Benefit Survey

Thank you for your valued input.

P.S. Here are our upcoming survey topics. We hope you'll take part and share in the results:

• Health Care
• Benefits for Part-Time Employees
• Relocation and Business Travel
• Incentive Plans / Bonuses
• Disability Plans
• Voluntary Benefits
• Non-Traditional Benefits
• Paid Time Off

Holiday Party Coming Up? Plan Wisely ...

Most organizations that anticipate any kind of holiday celebration for employees start their preparations in November, so here’s some savvy advice to help with your plans. We consulted Christopher J. Boman, partner in the Irvine, California, office of law firm Fisher & Phillips.

 “Crazy things can happen,” says Boman. He’s had to defend employers in a variety of situations—most involving alcohol—when inappropriate comments and/or behavior occurred that caused problems. It’s probably enough to say that Boman has seen it all, including nude pictures. But your employees would never allow that to happen, would they? Nevertheless, says Boman, some wise precautions can help to ensure that they don’t.

Boman generally recommends against parties held on work premises, so we asked why. “The major issue is compensation,” he says. Attendance at any holiday party, regardless of where it’s held, should absolutely be voluntary, he advises; that’s the first requirement. But if you stress that it’s voluntary and then hold it in the workplace during what would otherwise be work hours, how will nonexempt employees be compensated, if at all? Here’s a useful approach: If hourly workers attend the party, advise them not to clock out until they leave the facility; that is, pay them while they’re at the party. If they don’t wish to attend, they can either use vacation time and leave the facility when the party starts or, if it’s possible, continue working at their stations for a full day’s pay.

What else can go wrong? “Don’t let what should be a rewarding experience lead to problems,” Boman urges. What can go wrong at all parties, no matter where they’re held, is—you guessed it—alcohol. Will it be served? How will it affect your employees? If your party is held in the workplace, you can choose to serve only beer and wine. If hard liquor is served, whether on or off your premises, Boman stresses the importance of hiring a professional bartender: That person, not you as the employer, should be responsible for ensuring there is no underage drinking and that no further alcohol is served to someone who’s clearly intoxicated.

Remember, too, that alcohol can blur the usually clear boundaries of workday relationships, such as those between managers and their subordinates—a situation ripe for charges of sexual harassment.

Off premises, with significant others invited, a co-worker can be accused of spending too much time with the accuser’s spouse or, well, you name it. To preclude as much of this as possible, advises Boman, have all party attendees sign an acknowledgment that the party is a work function where managers remain on duty and all workplace rules remain in place.

If you are tempted just to trust that your employees will behave, we’d suggest you survey your workplace demographics. Generally, the younger your workforce, the greater the potential for inappropriate romances, workplace rivalries that turn into fights, overindulgence in alcohol, and more.

Tips for Keeping Holiday Bash Behavior in Line

Boman has seen some pretty awful happenings during holiday parties—happenings that brought suits against the employer, in which Boman defended them. So he has devised a set of tips that he hopes will keep you, as an employer, out of trouble. Here’s a sampling:

• Ensure that invitations and other party publicity are appropriate, in terms of language and illustrations. Boman defended an employer in a case where a party flyer was presented as evidence in court.
• Prohibit “after parties,” which are easy to arrange if the main party is held at a hotel: A manager who rents a room and invites some attendees to join him there is stirring a recipe for disaster.
• If you hold a party on your premises, provide not only a professional bartender but also transportation home for any employee who appears to have overindulged in alcohol.
• If you conducted layoffs during the year, don’t throw a lavish holiday party. It sends the wrong message, and employees may wonder if their departed co-workers could have worked a few weeks longer for what the party cost.
• Consider alternative celebrations, such as charitable contributions in employees’ names, either as a substitute for a party or instead of party gifts.
• If a company exec offers to host the party at his or her home, serving alcohol should be avoided. If there’s alcohol served and something goes wrong, the executive can be held personally liable.

8 Keys to Employee Retention

How much does employee turnover cost American business each year? The Department of Labor estimates about $5 trillion, says Mike Byam, author of The WOW! Workplace. Fortunately, he adds, effective recognition strategies can help keep turnover at bay.

Byam, managing partner at the employee recognition firm The Terryberry Company, offers eight keys to successful retention:

1. Start Retaining on Day One

The first week of a new job is an extremely impressionable time, and it represents an important opportunity to build a productive and fulfilling relationship between the new employee and the business. (At Founders Bank & Trust, President Laurie Beard personally meets with every new employee and presents him or her with a Welcome Aboard award.)

2. Exhibit Continuing Confidence

Remember, says Byam, that one of the best and most motivating forms of recognition you can provide is your continuing confidence in your employees’ ability to meet new challenges. Dare to believe in them fully and keep raising the bar by coming up with new assignments that test their skills and their creativity.
 
3. Try to Include Significant Others

Whenever possible, involve co-workers' significant others in recognition events and other important career moments. Byam says that you'll be sending a powerful message: "We value you and your family, and we want to keep you with us."

4. Keep Asking About Goals and Aspirations

How can you know what will motivate and inspire employees if you don't ask? From time to time, take a valued employee to lunch and use the time to pose several key questions. What do you like most about your job? What is your most exciting and thrilling challenge? If you could go anywhere you wanted in this organization, where would it be?

5. Encourage and Reward Career Growth

Support your employees' desires to acquire new skill sets and don't miss the opportunity to acknowledge those achievements, suggests Byam. A more highly trained workforce stands a better chance of succeeding in the global marketplace.

6. Blow the Trumpet for Your People

Get the word out about successful workers and their accomplishments. Imagine how proud your employees will feel when a neighbor or buddy comments about seeing their accomplishments highlighted in the newspaper, Byam says.

7. Find Interesting and Entertaining New Ways of Saying Thanks

Make sure everybody in your organization gets to participate in the recognition experience, Byam says. In North Andover, Massachusetts, a large retirement community recently came up with a fun bingo-based recognition game. When one of their employee teams reaches a production or service goal, they reward the entire staff by launching a day-long bingo game.

8.  You Get What You Reward

Want your employees to stay with your organization? Show them that their service is valued and appreciated by recognizing it, says Byam. Successful organizations build employee relationships that are fulfilling for their people and for the business.

Read more on this topic and other HR best practices at the HR Daily Advisor.

The Pay is Good, and You Can't Beat the Hours

An Illinois man accepted a job as a systems analyst with a new employer, but he changed his mind and declined the job before he ever started working there. However, the applicant, Anthony Armatys, was already in the new employer's payroll system and started receiving paychecks. How do you think he responded?

Somerset County Prosecutor Wayne Forrest says Armatys received paychecks from October 2002 to February 2007 before New Jersey-based Avaya, a communications company, realized it was paying a person who had never actually worked for the company. 

Forrest also alleged that Armatys had withdrawn funds from an employee retirement savings account into which Avaya had made contributions. Forrest said investigators listened to a tape-recorded conversation between Armatys and the company that administered the retirement savings account. In the conversation, Armatys claimed to be an employee of Avaya, Forrest says.

In all, Armatys received $470,995.53 in pay and retirement savings, Forrest said.

HR Strange but True reports that, before going to trial, Armatys agreed to plead guilty. Forrest says that under the plea agreement, the state will recommend Armatys be sentenced to a state prison term of 6 years and be required to pay restitution. Sentencing is scheduled for January 8, 2010.

Do you enjoy reading about workplace weirdness? Office oddities? Start every Friday with the free HR Strange but True email newsletter.

Women-to-Women Mentoring Promotes Advancement, Retention

Men generally do a "fantastic job" of helping their male colleagues move up the corporate ladder, but women typically do not, says Thomasina Tafur, a former FedEx® senior manager who is now a consultant to HR executives on positioning females for leadership roles.

"I don't think it's deliberate or malicious," says Tafur, president of Thomasina Tafur Consulting (www.thomasinatafur.com). Women are often so focused on the climb themselves that they don't have time to look back down and give their female colleagues a hand, she says. "We have strived so hard just to get to the top."

Women mentor programs can help fill that gap. But how common are such programs? "Not very, that's the problem," she says. "I do not believe that there are enough mentor programs specifically geared toward women."

Two Key Elements

Women mentor programs primarily exist at larger companies where, for example, affirmative action requirements apply or public image is a top concern, according to Tafur. However, she says smaller companies can benefit as well because mentor programs for women can help tap a "unique talent pool."

Such programs also promote retention in companies of all sizes because they demonstrate a company's interest in investing in women's future and helping them excel within the organization, she explains. Having a mentor program says to a female employee, "we really care about you and your future."

Tafur identifies two key elements of an effective women mentor program. "First and foremost, you absolutely have to have buy-in from upper management," she says. "If your program does not have that, it's doomed from the beginning."

Second, mentors need to see themselves as "sponsors," take their roles seriously, and be held accountable for their work in this area, according to Tafur.

Read about Tafur's specific tips for HR professionals to consider when offering a women mentor program on HR.BLR.com

Reducing Deferred Compensation? Careful …

“Every day,” says attorney Lisa Van Fleet, “we get asked things like, ‘How can we eliminate our match? What if we change our benefits program midyear? How do we manage a reduction in force? How do we put together severance pay packages?'"

Times have changed for every company. Since the economic downturn, not surprisingly, most of Van Fleet's calls concern cutting costs associated with compensation and benefits. Van Fleet is a partner with the St. Louis office of the law firm Bryan Cave LLP.

“Those things have been the daily meat of our work for the last 9 months." she adds. “The funny thing is, up until midnight on December 31, 2008, we were working with people to bring their deferred compensation plans into compliance with IRC Section 409A, the new executive compensation rules.”

Then, "almost at the stroke of midnight," she says, it switched, and people wanted help to take compensation away from those same executives, or at least restructure the compensation. "Ironically, 409A, which was designed to prevent executive abuses, actually impedes your ability to take compensation back,” she notes.
Cutting Executive Compensation

In the companies she consults with, Van Fleet sees two broad areas of concern over executive compensation: One is midyear program changes, and the other is design changes.

For example, for midyear changes companies might want to eliminate bonuses or equity compensation arrangements. Or they might want to convert cash payments to equity payments, because they simply don’t have the cash. On the other hand, they may not be trying to reduce costs, but want to change from guaranteed bonuses to bonuses tied to the performance of the company.

If your company wants to make mid-year changes, Van Fleet says, you need to measure those changes against the requirements of 409A.

“For example, say you have executives who are making $500,000 a year in cash, plus they have some deferred compensation arrangements. Let’s say they made an election to defer some portion of the cash compensation, and now you decide to convert $300,000 of their cash compensation to equity compensation. What has that done to the deferral election? Is that a permissible change?”

Whenever you contemplate such changes, you need to evaluate existing deferral arrangements against 409A to see if you’re creating any problems, Van Fleet says.

See this recent article in the HR Daily Advisor for more about avoiding the pitfalls of restructuring your compensation plans.

Introducing the 'New' BLR

It's with (slightly) mixed emotions that I announce that Business & Legal Reports, the company I founded 32 years ago, is today changing its name to Business & Legal Resources, and new corporate website at www.BLR.com.

You may be wondering -- why the change? The switch from "Reports" to "Resources" may not seem like much, but it's a symbolic move that reflects the evolution of our business. While our newsletters and other traditional products are still extremely popular (and we trust you'll continue to like them!), our business has evolved. Our Web-based compliance portals, on-demand training software, and Web applications reflect a new direction and future for BLR and our relationship with you, our customers.

The bottom line? BLR is still ... BLR. Our business has evolved, but how we build the core compliance and training information you depend on day in and day out has not changed. It is still prepared and delivered by our editorial teams of lawyers and industry experts in a plain-English format that makes it easily understood and implemented by non-lawyers.

I'd like to invite you to visit the new www.BLR.com and let me know what you think of the changes. You'll still find our entire product line in our online catalog. And don't forget the many free resources we provide for employment, safety, and environmental professionals.

And speaking of our online catalog, we are having a "launch sale" to celebrate the new BLR name and website. For this week only, in honor of the launch of our new brand and site-all sales through our online catalog will be 30 percent off. Be sure to use coupon code BLRlaunch at checkout.

Regards,

Robert L. Brady, CEO
BLR^®—Business & Legal Resources

Have Your Job Descriptions Become 'Lawyer Bait'?

One upshot of the economic downturn was that many employees saw their jobs change and grow. There may be fewer bodies out there, but the work still has to get done. In a lot of cases, that means job descriptions are out of date and inaccurate. And that could be prime fodder for a lawsuit.

For example, if an employee is classified as exempt, but is now doing some non-exempt work, a lawsuit could be on the way, said Attorney Sandra Rappaport. "In this age of downsizing and job consolidation, even your best, most complete job descriptions have likely become outdated." she said, "And outdated job descriptions are a plaintiff's lawyer's best friend."

Rappaport, a partner at the San Francisco office of law firm Hanson Bridgett, LLP, said that many employers don’t realize that it’s what an employee does that matters, not the person’s job title: “Someone called a ‘manager’ may not be an exempt employee,” she said. “Exempt workers who perform too many nonexempt duties may not be exempt.”

With employers around the country trying to do more with less these days, that means that once-exempt workers are spending more time on non-exempt duties. And, when the balance tips too far in that direction, you’re required to pay overtime. You could even be on the hook for years of back overtime, depending on how long the misclassification has gone on. “Relying on an old job description and thinking you’re safe is a sure path to disaster," she said.

Rappaport and her colleague Mike Moye, a fellow partner at Hanson Bridgett, regularly counsel employers on exemption issues and are frequent speakers at industry events. They will be presenting a unique job descriptions workshop at BLR’s National Employment Law Update conference Oct. 19-21, at the Venetian in Las Vegas. The workshop will cover:

• Elements that should be included in every job description
• The steps you should take when you create new job descriptions from scratch
• Red flags that could cost you big in a lawsuit
• Why your current job descriptions may not match the way you’re treating employees in terms of overtime pay and benefits—and why you need to fix this, immediately
•  How to evaluate whether a given job description tends to indicate exempt or nonexempt status

Attendees will have the opportunity to submit their own job descriptions for exempt/nonexempt review by Rappaport and Moye before the session.

You can read more of Rappaport's job description tips in the HR Daily Advisor.