U.S. Department of Labor Overtime Rule Will Hurt Businesses

7768406In 2014, President Obama directed the U.S. Department of Labor (DOL) to update and modernize rules regulating exemption of certain employees from minimum wage and overtime protection provisions of the Fair Labor Standards Act. Just a few weeks ago, the U.S. DOL released regulations regarding new rules for overtime. This action drastically increases the salary threshold under which most employees would be eligible for overtime pay, from $23,660 for a full-time employee to $47,476 per year. This will affect millions of middle-wage employers across the country.

In addition to this increase in salary threshold, an automatic adjustment will occur every three years. Also, the “duties test” that determines whether or not certain employees are eligible for overtime even if they make more than the new threshold amount will continue. To be eligible for this exemption, an employee’s job duties must primarily involve executive, administrative or professional duties as outlined by DOL regulations. The change is set to go into effect on December 1 of this year. (See DOL fact sheet.)

Obviously, this has drastic implications for the employer community. According to the Washington Post, about 35% of full-time salaried employees will be eligible for time and a half when they work extra hours under the new rule. Under an already existing rule, that number was 7%. As such, employers will have less flexibility in documenting time for their workers – including flex time – or may have to cut back hours for certain employees. This can hamper employers being able to reinvest in their companies, as well as provide better benefits and growth opportunities. Small businesses will be even more impacted by this onerous rule.

The Indiana Chamber, in conjunction with the U.S. Chamber, is reaching out to the Indiana delegation in Washington, D.C. to let them know how this will impact the business community. We encourage you to participate in this call to action.

The 2016 Indiana Wage and Hour Seminar on July 28 will include a detailed discussion on the impacts on employers.

Immigration Committee Hears from Business

?????????????????????????????????????????????????????????????The Indiana Senate Select Committee on Immigration Issues conducted its third meeting recently; this time it was the business community which brought its case before Senate legislators. The Indiana Chamber made a very effective plea for Congress and the federal government to bring about comprehensive immigration reform.

At the Chamber’s request, subject experts Jon Baselice, Chris Schrader and Jenifer Brown testified – along with Chamber staff – on the impacts of immigration on companies.

Baselici is the director of immigration policy for the U.S. Chamber of Commerce, served on the staff of U.S. Sen. Marco Rubio (R-Florida) and assisted in drafting S.744, the comprehensive immigration reform bill that passed the Senate. He testified that our immigration system is working abysmally. The U.S. Chamber sees four areas for reform on immigration:

  1. Controlling our borders and preventing individuals from overstaying their visas
  2. Modernization of our legal immigration system, placing more value on a potential immigrant’s skills and talents, along with temporary worker programs
  3. An enhanced employment verification system as long as there is a preemption of state and local E-verify laws, adequate safe harbors for employers who use the system and the creation of an agricultural guest worker program that provides agribusinesses meaningful access to lawful workers in times of need
  4. What to do with the current undocumented population of 11.3 million.

Chris Schrader, president of the Society for Human Resource Management, presented a perspective on E-verify. He discussed its limitations, that there was no safe harbor for employers and that it is unable to authenticate identity. Jenifer Brown of Ice Miller testified on the actions available to Indiana under federal law (including the Immigration Reform and Control Act); the pros and cons of the federal E-verify system – explaining the complexities of the mandatory versus the non-mandatory system; the effect of unauthorized aliens upon the economic well-being of Indiana and the effect of their removal and changes in federal law or policy regarding legal immigration that could improve the Indiana economy. The Chamber also provided a presentation on the difficulties and the process of the I-9 employment eligibility verification form.

Among others testifying before the committee: the Indy Chamber of Commerce, Indiana Farm Bureau, Indiana State Building & Construction Trades Council, Indiana Builders Association and Indiana Restaurant & Lodging Association. Three more meetings are expected before a report is prepared for the Indiana Senate.

Employer Survey: Downward Workforce Trend Continues

More than half of respondents to a recent survey expect their workforces to grow in the next two years, but more of those employers continue to leave jobs unfilled and rank meeting talent needs as among their biggest challenges.

There were 671 respondents to the ninth annual employer survey, conducted by the Indiana Chamber of Commerce and its foundation. WGU Indiana sponsored the survey, sent to Indiana Chamber members and customers. Participating companies included 58% with fewer than 100 employees and 27% with between 100 and 500 employees. Leading industries represented were manufacturing (21%) and health care/social assistance (11%).

While there were not dramatic changes from workforce results in recent years, several downward trends continued. Companies that left Indiana jobs unfilled in 2015 due to under-qualified applicants increased to 45% – compared to 43% and 39%, respectively, for the prior two years. In addition, 27% of respondents identified filling their workforce and meeting talent needs as ­­their biggest challenge. Another 49% categorized the talent needs as “challenging but not their biggest challenge.” The 76% total exceeds the numbers for 2015 (74%; 24% biggest challenge) and 2014 (72%; 20% biggest challenge).

This comes despite the percentage of respondents requiring an industry certification or occupational license for unfilled jobs declining from 27% in the 2015 survey to 16% in 2016. At the same time, the minimum requirement of a high school diploma increased from 34% to 39%.

On the other end of the education spectrum, more employers are also raising the bar. Employers requiring a bachelor degree as the minimum level for the unfilled jobs increased from 23% a year ago to more than 28% in 2016. This reaffirms the importance of moving the current workforce toward degree completion.

More than half (52%) of survey respondents indicated they do not offer tuition reimbursement. Of those providing the tuition assistance, only 11% of companies see at least 10% of their employees taking advantage of the benefit. This serves as a potential additional detriment to reaching the Outstanding Talent goals, particularly in elevating the skills of incumbent workers. Recent Cigna Corporation research shows a $1.29 return generated for each $1 investment in tuition reimbursement.

Additional results include:

  • Personal qualities (work ethic, responsibility, initiative) and critical thinking skills were cited as most challenging to find among job applicants and new hires at 63% and 54%, respectively
  • More than half (54%) of companies expect to grow their workforce in the next 12 to 24 months. Forty-one percent anticipate no change, with 4% seeing a decrease
  • Pending retirements continue to be a factor as 57% say up to 5% of their employees will be eligible to retire within the next five years (27% place the percentage of eligible retirees as high as 10%)

View the survey results at www.indianachamber.com/education.

The Indiana Chamber and its foundation, focused on providing research and solutions to enhance Indiana’s economic future, have resources to assist employers, job seekers and students.

IndianaSkills.com provides job supply and demand information both statewide and regionally. It utilizes current labor market data to help companies, prospective workers and students understand Indiana’s workforce landscape. Salary data, required skills and certifications, and creation of effective job descriptions are among the featured tools.

Indiana INTERNnet has been connecting students and employers for internship opportunities for 15 years. The easy-to-use web site, informative Intern Today, Employee Tomorrow guide and regional partnerships are supplemented by additional outreach programs.

The Indiana Vision 2025 plan measures Indiana’s progress compared to other states on 36 goals in the four driver areas of Outstanding Talent, Attractive Business Climate, Superior Infrastructure, and Dynamic and Creative Culture.

Are Your Policies and Procedures Up to Date?

ModelEmployee7The new seventh edition of our popular handbook, Model Employee Policies for Indiana Employers, is almost here! Authored by attorneys from Bose McKinney & Evans LLP, this guide is designed to help employers understand the legal implications of an organization’s written policies and procedures, the costs and benefits of placing informal practices in an employee handbook and how to communicate an organization’s values and goals. It includes a compilation of legal commentary and numerous sample policies.

Here’s a list of some of the topics being updated in the new edition:

  • Practical policies for dealing with new white-collar wage/hour regulations
  • Updated policies attempting to balance employer authority with the increasing overreach of the National Labor Relations Board
  • Revised EEO policies addressing expanding LGBT rights and protections
  • New technology-driven policies recognizing employee preferences for using their own devices for work-related purposes
  • Expanded complaint procedures focused on increasing whistleblowing protections in the workplace
  • Revised policies taking into consideration recent Supreme Court decisions on religious, disability and pregnancy discrimination and accommodations

Place your pre-order now: The book is $109 ($81.75 for Indiana Chamber members), and an ePub (online only) version will be available for $79. We expect to ship/publish the book in July.

National Conference on Career Pathways Coming to Indy

pathway confPostsecondary Pathways has been a multi-year series of regional events connecting educators and businesses throughout the state. BizVoice magazine featured a 2015 stop in Batesville and a March-April 2016 update on recent programs.

The topic is also prominent at the national level, with the National Career Pathways Network (NCPN) bringing its annual conference to Indianapolis and the JW Marriott in October. NCPN assists educators and employers involved in the advancement of career pathways, career and technical education, and related education reform initiatives.

The conference takes place October 5-7. Pre-conference workshops, nationally-known keynote speakers and more than 130 breakout sessions are featured. More than 1,200 participants are expected.

 

 

Long-Awaited Overtime Rule is Issued; Opponents Weigh In

If you’re in or around the world of HR, you’ve been awaiting the details of the new overtime rule within the Fair Labor Standards Act (FLSA) — effective Dec. 1. This was done at the behest of President Obama, and executed by the Secretary of Labor. According to the U.S. Department of Labor, the new rule will:

  • Raise the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year), ensuring protections to 4.2 million workers
  • Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability
  • Strengthen overtime protections for salaried workers already entitled to overtime
  • Provide greater clarity for workers and employers

Here’s a video of Secretary Tom Perez explaining and advocating for the new rule:

Let it be known that not all are so enthusiastic, however. Opponents – a list that includes us at the Indiana Chamber, the U.S. Chamber, Society for Human Resource Management, many legislators and policy institutes  assert the new rule is unreasonable for several reasons, including the fact that some employees will lose their coveted professional exempt status.

UPDATE: Here’s more information from the U.S. Chamber on why this measure is so onerous. 

Exploring a ‘Best’-Kept Secret

mobi

This is going to be good!

Like a kid in a candy store, my eyes widened as I gazed around the spacious surroundings at MOBI, an Indianapolis-based provider of software and services that helps businesses manage mobility.

Maybe it was the infectious energy enveloping employees as they chuckled, collaborated and consumed – in moderation – an adult beverage, courtesy of Frank the Tank (MOBI’s kegerator). Perhaps it was the colorful décor that so aptly captured the vibrant personality of its people. Something was special about MOBI.

Make yourself at home at MOBI with this BizVoice® magazine story about its honor as one of the 2016 Best Places to Work in Indiana.