A Look Ahead
Experts say upcoming decisions from the Supreme Court and the National Labor Relations Board are just a few of the issues HR leaders need to be focused on in the coming 12 months.
By Carol Patton
From a legal perspective, 2016 could be a bumpy ride for employers.
With a Democrat in the White House for the past eight years, legislation has been favoring workers, including benefits for same-sex couples and paid parental leave. This employee-friendly movement is expected to continue through 2016 as Democrats keep pushing -- ahead of the presidential election -- for more workers' rights and benefits that will impact HR practices and budgets.
HRE spoke with three experts in the HR arena -- Richard Meneghello, partner at Fisher & Phillips in Portland, Ore.; Beth Zoller, employment attorney and legal editor at Xpert HR in New Providence, N.J.; and Amit Jain, division vice president of strategy and business development at ADP in Parsippany, N.J.-- to identify the top five challenges facing HR professionals this year.
New Overtime Rules
It's no surprise that the U.S. Department of Labor's new regulations for overtime will probably increase the salary portion of the overtime test, doubling it to approximately $50,000.
ÂThese changes have been on the horizon since 2012," says Meneghello, "and there's almost no doubt that some changes will take effect in 2016." He adds that, if the Final Rule is published on July 1, employers may have 60 days or until August 30 to become compliant.
Zoller says that, if the changes are going to happen, HR "might have to reclassify employees, re-evaluate pay structures or write new job descriptions and ensure hours are properly tracked. Employers might find themselves liable for a lot more overtime than they're used to paying."
If those changes are enacted, between 500,000 to 1 million currently exempt employees could lose their exempt status over the next 10 years, according to Jain, who adds: "HR needs to create a list of employees who would be impacted, look at the historical hourly patterns to understand how much overtime is anticipated going forward and quantify that so the company can start to budget accordingly."
Legal experts are expecting a U.S. Supreme Court decision in June -- in the case of Friedrichs v. the California Teachers Association Â about the authority of the CTA and other public-employee unions to collect mandatory agency fees, which is a main source of their income. Also, experts say, plan on the National Labor Relations Board issuing more employee-friendly decisions throughout the year.
ÂThere's a very good chance that the Supreme Court is going to strike down the agency shop fees that will really limit the political clout unions have," says Meneghello, "because it will reduce the number of workers who are unionized in the public sector." Â He says that, while it won't immediately impact private-sector employees, there's also the potential that the decision "is going to further reduce the effectiveness and significance of unions across the American landscape."
Meneghello says he expects another NLRB decision involving franchise and staffing-company arrangements that gives employees the right to negotiate directly with the parent company that otherwise might not have had any control or relationship with employees whatsoever.
The NLRB's decision on joint-employer relationships "really gives workers the opportunity to go after more deep pockets," says Zoller, who adds that the decision "will have a critical impact on the business relationships between two entities and whether or not they will be a considered a joint employer."
Health and Wellness
HR leaders would be well-advised to pay attention to what the Equal Employment Opportunity Commission may say this year about employee-privacy laws involving genetics. Likewise, employers are now required by the Affordable Care Act to track and then report certain employee data to the Internal Revenue Service.
Meneghello says that there seemed to be a good deal of consternation surrounding the Genetic Information Nondiscrimination Act and other privacy laws.
"Should employers be able to have that information?" he asks rhetorically. "At first, it looked as if the EEOC was saying, 'No, you couldn't,' which would really put a huge crimp in a typical wellness program. Now it appears the EEOC is softening its stance. We're not sure what it will say, how friendly it will be, but it's something to definitely keep an eye on, especially as more employers institute [wellness] programs to cut down their costs."
Meanwhile, Jain says the ACA has transformed what was once an annual enrollment event into a monthly process of tracking and reporting extensive employee data: "Companies have to make sure they're tracking all the right pieces of information from different systems. For every statement that has incorrect information or is not filed, the penalty is $250 up to a total of $3 million."
This has always been a sticky issue for HR, especially since the DOL changed the administrative interpretation of the definition of such workers, thus making it more difficult to classify or hire ICs. Therefore, experts urge HR leaders to review the status of its ICs to avoid misclassifications and possible lawsuits.
In 2016, Meneghello says, there will be "a further attack" on the classification of workers as ICs: "Unions are definitely behind that battle. They want as many workers as possible to be classified as employees, not ICs, so they can be organized." He adds that the Uber misclassification case will probably be decided in July, in which "a small number of Uber workers want to be employees, [but] many enjoy the freedoms" of being an IC.
The federal and state governments, Zoller says, are really clamping down on misclassification of ICs. "Employers should be very careful about how they treat individuals, whether they issue them a 1099 or W-2," she says. "Evaluate the working relationships and the pros and cons of continuing down this path."
Management Tools and Millennials
Whether it's the need to comply with the ACA's new reporting requirements or to gain a global, competitive edge, more employers in 2016 will rely on advanced technology to mine and analyze workforce data.
"The need for integrated HR benefits and workforce management systems is higher than it was ever before," says Jain. "It's really important to have these data-driven insights so HR can take appropriate action in terms of recruitment, compensation and performance incentives, especially with a new generation of workers.
"Millennials have grown up with technology and will account for nearly half the global workforce by 2020," he says. "HR professionals should really take time to rethink how they want to leverage the technologies out there."
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