HR & Compliance

Add SBAM offers a full spectrum of human resources services to keep you compliant and help your business run more efficiently and profitably....


Human Resources Solutions

ASE LogoLooking for help with tough HR issues? 

SBAM partner ASE has the answers about hiring, firing, FMLA, ADA and more! Get access to a FREE HR hotline, affordable and cost-effective research consultation services, discounted employee handbooks and workplace posters, and more.


Section 125 Plan, FSA, HSA & HRA Administration

 

KUSHNER & COMPANY LogoLooking for ways to contain health care costs?
With the cost of health insurance continuing to rise, most employers require their employees to contribute to the cost of health insurance premiums. SBAM partner Kushner & Co. can help you put a tax-favored, consumer-directed plan in place that benefits you and your employees.

 


COBRA Administration

Personalized, affordable administration for your business. 

If you have 20 or more employees, your company is required by federal law to offer continued health insurance coverage via COBRA and will face huge fines if it's not administered correctly.  Let SBAM help you stay compliant for only $30 per month. 

How to get the people performance you need for small business success! Today at 10 a.m., 3 p.m. and 8 p.m. on Business Next

Lisa Toenniges, CEO of Innovative Learning Group, talks with SBAM's Vice President Communications Michael Rogers about six questions to ask  to get the people performance you need (preview of her seminar for the May 16 Capital Quality and Innovation program at Michigan State University.)

Listen today at 10 a.m., 3 p.m. and 8 p.m. on the 
Michigan Business NetworkSBAM members can log in and listen to archived programs anytime on a PC or mobile device by going to the Business Next show page.   

Understand employer duties regarding retirement plan expenses

Article courtesy of SBAM Approved Partner AdvanceHR

A recent U.S. District Court ruling offers a timely reminder of the importance of maintaining proper procedures when administering qualified retirement plans. The consequences of acting inconsistently with stated policy, perhaps even with good intentions, can be costly indeed.

Much attention has been focused in recent years on investment management and recordkeeping fees paid by retirement plan participants -- that is, employees and retirees.  Specifically the focus has been on the level and the clarity, or lack of clarity, of those fees.

After some delays, these concerns led to new regulations from Department of Labor (DOL) that require plan service providers to furnish certain information by July 2012. This information, said  the DOL, will "enable pension plan fiduciaries to determine both the reasonableness of compensation paid to the service providers and any conflicts of interest that may impact a service provider's performance under a service contract or arrangement."

Some vendors have already been meeting the new requirements.  A related set of DOL regulations, which govern plan information provided by vendors to plan participants, will kick in by the end of August for most plans.

What Not to Do

How can employers get into trouble with respect to retirement plan costs -- with or without the benefit of the new fee disclosure regulations? The recently decided case of Tussey vs. ABB Inc.  (U.S. District Court for Western District of Missouri), offers a good illustration of what not to do.

Trustees of a retirement plan of ABB Inc., a manufacturing firm,  were found to have breached their fiduciary duty to protect the interests of plan participants. Among other things, the trustees failed to monitor the fees it was paying to its primary 401(k) vendor (Fidelity Management Trust Co.) The case was brought as a class-action suit on behalf of plan participants.

At the heart of the case is the plan trustees' failure to adhere to their own investment policy statement (IPS), which is the essential blueprint dictating how investment and related decisions are to be carried out.  The term "IPS"  cropped up more than 50 times in Judge Nanette K. Laughrey's 81-page ruling, indicating the critical importance of the document.

Eye on Fee Structure


In one fateful decision, the trustees accepted a change to the formula used to determine recordkeeping fees. Specifically, the plan switched  from simply paying a flat per-participant charge, to a system in which fees came out of asset management fees, and rose as plan assets grew. The result of the arrangement was recordkeeping charges rose by about 200 percent over time as plan assets rose, yet actual recordkeeping services provided did not grow with plan assets. In other words, the recordkeeper appears to have enjoyed a windfall at plan participants' expense.

Also, plan trustees never bothered, initially, to benchmark their plan costs -- further evidence of a lack of the prudent behavior required of plan trustees. They later hired a consultant to analyze their cost structure. The analysis indicated ABB's plan was paying abnormally high fees -- yet trustees failed to do anything about it.

Disregarding the Investment Policy Statement

Another failure to pay heed to the plan's IPS occurred when trustees dropped one investment manager and switched to a new one. The change was made without satisfying the IPS' detailed processes for evaluating the performance of the fund being dropped, and also without giving full consideration to more than one alternative fund manager.

Trustees also committed a fiduciary breach, the court con

Grooming policy: how far can employees go?

This can be one of the most contentious workplace issues: Dealing with employees' appearance, everything from what they wear on the job to how they are wearing it, to jewelry they wear, to where they are wearing it, to exposed tattoos and other forms of body art.

Employers' attempts to dictate their employees' appearance on the job has led to many legal contests and court decisions. Following are three examples:

1. In one case, Alamo-Rent-A-Car was found guilty of violating an employee's religious rights when, after the terrorist attacks of 9/11, it reversed a previous practice of allowing an employee to wear a head scarf. The employee wore the scarf anyway and was fired. An Equal Employment Opportunity Commission (EEOC) investigation found that Alamo had no legitimate business purpose for the decision and made no effort to accommodate the employee's religion. (EEOC v Alamo Rent-A-Car, LLC; ANC Rental Corporation.)

2. In another case, Costco Wholesale fired Kimberly Cloutier when she refused to remove an eyebrow ring. The retailer had a storewide policy of prohibiting facial and tongue jewelry. The employee claimed that Costco violated her religion (the Church of Body Modification), that required her to have facial and body piercings. She complained to the EEOC. During mediation, Costco offered to allow her to return to work wearing a Band-Aid over the piercing, or wearing a clear plastic retainer in place of the ring. But Cloutier rejected these solutions, saying that her faith required her to display piercings.

The EEOC found Costco guilty of religious bias. But the U.S. Court of Appeals ruled that because Costco had proposed possible solutions that Cloutier rejected, Costco had made a good faith effort to accommodate her religion. (Cloutier v Costco Wholesale Corp.)

3. In a third case, Deborah Connor, a clerk at the Hub Folding Box Company, sued her employer for gender discrimination and retaliation. The employer had told Connor to cover a heart-shaped tattoo on her forearm or be terminated, but had not required a male employee to cover his Navy tattoo. The company's position was that customers would react negatively to seeing the tattoo on the female employee because a tattoo on a woman "symbolized that she was either a prostitute, on drugs, or from a broken home." In contrast, the employer believed men with tattoos were heroes. The court ruled that the employer's position was based on outdated gender stereotypes and constituted an unlawful basis for treating men and women differently in the workplace.

(Hub Folding Box Company, Inc., v Massachusetts Commission Against Discrimination.)

So, how far can the employer go to define, and even control, the appearance and grooming of employees on the job?

First guideline: Your decisions on what clothing, jewelry, body ornamentation, and appearance are acceptable must be work-related. Your code must be based on business necessity.

Example: You have a restaurant. You can justify prohibiting employees who are seen by your clientele from showing body piercings -- such as tongue and nose jewelry -- that you have reason to believe can upset clientele.

Second guideline: Your code is necessary for safety reasons. Example: You can prohibit machine operators from wearing loose clothing and loose jewelry that can get caught in the moving parts.

Third guideline: Your code is NOT based on stereotypical personal beliefs, and it does NOT discriminate against a protected class.

Some examples: Do you permit female employees to wear long, dangling earrings, but prohibit male employees from wearing earrings? Do you prohibit mustaches and beards and require men to be clean-shaven, placing a burden on some men (particularly men of African ancestry) who have facial skin conditions that are aggravated by shaving? Do you specify "traditional business clothing for office empl

Smart hiring decisions begin with asking the right questions

Article courtesy of SBAM Approved Partner AdvanceHR

Bad hiring decisions can be costly, especially for small employers who lack the staff "cushion" to absorb the impact of non-performers and turnover. Some of the costs are calculable hard dollar expenses while others are hard-to-measure. The intangible costs may include damaged customer relations, missed business opportunities and low morale among co-workers who bear the brunt of another employee's shortcomings. Avoiding these costs can be accomplished by investing time upfront in better hiring techniques.

Why do employers make bad hiring decisions? Recognizing a few of the common culprits sets the stage for embracing what may be a better hiring process. Here are some of the main reasons, according to authors Lori Davila and Louise Kursmark.

  • Not really knowing what you are looking for: A failure to carefully think through the specific skills, behavioral patterns and motivators that are key to the job you are trying to fill.
  • Inadequate interview preparation and poor choice of questions: Giving short shrift to gearing up for an interview almost always will result in limited insights on the job candidate, and thus an uninformed hiring decision.
  • Hasty hiring decisions: The temptation may be strong for a manager to make a snap decision when time is tight, especially for managers who rarely have to hire. But the results can be costly.
  • Looking for a clone: People tend to hire people -- frequently unconsciously -- who they have something in common with, or who remind them of themselves. It's called the "halo effect," and it creates problems if you need someone with other characteristics, or simply are blinded to the candidate's shortcomings.
  • Lacking a formal interview process: Effective interviewing amounts to a technical skill; informal, subjective approaches often fail.
Additional hiring issues are described in detail by Davila and Kursmark in their practical primer titled How to Choose the Right Person for the Right Job Every Time (published by McGraw Hill). They include using only one interviewer, hiring over-qualified candidates who will be insufficiently challenged, and failing to check references thoroughly.

Behavior-Based Interviewing

Davila and Kursmark place great emphasis on the use of behavior-based interviewing. This means posing questions that are not hypothetical, but instead elicit concrete examples of how a job candidate has handled situations in the past. That approach may reveal whether a candidate has a track record that's appropriate to the job you are trying to fill.

This is not new, but still not universally applied. Behavior-based interviewing evolved years ago out of a recognition of the limitations of traditional theoretical interview questions, such as "What would you do if a customer or supervisor asked you to do something unethical?" Behavior-based interviewing, instead, requires asking the candidate to provide an example of how he or she responded to a situation or scenario described by the interviewer.

"Pre-selected questions, carefully correlated with the essential functions of the job, (emphasis added) allow candidates to describe specific examples of their past behavior," the authors explain. The broad job qualification parameters should cover not just technical skills and knowledge, but also "behaviors and performance skills" as well as motivation.

Today, coming up with probing behavior-based interview questions has become a burgeoning industry; "Google" the phrase and a myriad of vendors fill your computer screen. Davila and Kursmark devote a chapter of their book to such inquiries and provide 401 such questions, organized according to 50 competencies the interviewer may seek to pr

Be a better leader in your small business! Today at 10 a.m. on the free Business Next audio seminar

On Monday's program: leadership action ideas that can help make your small business more profitable, with business consultant Tom Borg; Wendy Pittman, executive director of Intern In Michigan, with great news about the success of this program that places college interns in small businesses; and the week’s legislative update with Dave Jessup.

Listen today at 10 a.m., 3 p.m. and 8 p.m. on the 
Michigan Business NetworkSBAM members can log in and listen to archived programs anytime on a PC or mobile device by going to the Business Next show page

Photo by http://www.flickr.com/photos/25692668@N06/
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