reducing risk: how to stay ahead of fast changing workforce legislation
TRANSCRIPT
#WFwebinar
The presentation will begin at the top of the hour.
A dial in number will not be provided.
Listen to today’s webinar using your computer’s speakers or headphones.
Welcome to the webinar!
#WFwebinar
Tools You Can Use Audio Control
– A dial in number will not be provided.
– Adjust the volume by sliding the indicator in the Media Player box to the right.
– Also check your computer’s volume for external speakers or headsets.
#WFwebinar
Tools You Can Use
Speaker Bios
Resources
Media Player
Q&A
Slides
Help
Post Event Evaluation Share This
Group Chat
HRCI & SHRM
WF Webinars
#WFwebinar
1. May I receive a copy of the slides? YES! Click on the resource list located on the top right
portion of your screen.
2. May I review the webinar recording at a later date? YES! You may log in again using today’s link to review the
presentation on-demand.
3. Is this webinar HRCI or SHRM certified? YES! The HRCI and SHRM certification codes will appear
in the box to the right of the slides after the required watch-time has elapsed.
Frequently Asked Ques6ons
#WFwebinar
Reducing Risk: How to Stay Ahead of Fast Changing Workforce Legisla6on
Dave Weisbeck Chief Strategy Officer Visier
Reducing risk: How to stay ahead of fast-‐changing workforce legisla8on
Dave Weisbeck, CSO, Visier
September 6, 2016
Maximize your business outcomes, through your people
Analyze: Go from data to insights Align: Go from insights to plans Act: Go from plans to outcomes
Where are our recrui8ng boBlenecks?
How can we retain cri8cal employees?
What if?
How well did we plan?
How do our total workforce costs breakdown in our plan?
Should I give my team member a raise?
What are our total workforce costs and how are they changing?
How can we connect Total Rewards to our boBom line?
How will turnover impact our future
workforce?
Which workforce scenario will best meet our business goals and budget?
Where should we allocate people to support the
business?
Which Cri8cal Talent is at risk of resigning?
Who should I promote? Workforce Analy8cs
Workforce Planning
Visier Workforce Intelligence
Visier is about making both HR and the business beBer
Visier is how the best brands achieve the best business
outcomes
Agenda
• The new overIme rule • Proposed changes to pay equity reporIng • The risks of misclassifying employees as contractors • Technology opIons for reducing risk from workforce legislaIon changes
Department of Labor Over8me Rule Changes
The new over8me rules
$23,660
[VALUE]
Threshold now ASer Dec. 1
• Exempt salary threshold doubles on Dec. 1, 2016
• Threshold will be updated every three years
• Full-‐Ime salaried workers who earn LESS are eligible for overIme pay
What the DoL recommends
In response to the new over6me rule, employers can: ü Pay Ime-‐and-‐a-‐half for overIme work ü Raise workers’ salaries above the new threshold ü Limit workers’ hours to 40 per week ü Some combinaIon of the above
How many workers are affected?
“The updates will impact 4.2 million workers who will either gain new overIme protecIons or get a raise to the new salary threshold.”1
U.S. Department of Labor
1. Who Benefits from the OverIme Rule, U.S. Department of Labor Blog
"This phased-‐in approach will s2ll disrupt long-‐term wage planning for many organiza2ons, and
future annual updates based on unknown increases will wreak even more havoc on
compensa2on planning for large businesses."
Patrick Brady, Manager of Public Policy, WorldatWork
The new rule could significantly increase costs 1,000 newly eligible employees could cost an addi6onal $3.5M per year
*Based on BLS data
1. Average over6me 3.2 hours per week
2. # weeks worked 48 weeks per year
3. Average increase in over6me hours 153.6 hours per person per year
4. Max. hourly rate for eligible employees $913 ÷ 40 = $22.80
5. Annual cost per employee 153.6 × $22.80 = $3,505.92
6. Cost for addi6onal 1,000 newly eligible employees
1000 × $3,505.92 = $3.5M per year
How will you assess how the new rules impact your organiza8on?
Short-‐term
How and where are our over8me costs/risks changing?
Mid-‐term
How can we modify our comp strategy and workforce plan to op8mize costs?
Long-‐term
How can we prepare for future changes?
What you will need to answer • How many employees are impacted? • Should we raise salaries to retain exempt status for those on the cusp of the new salary level?
• Should we reclassify those who fall under the new threshold and change their pay structure?
• Since bonuses and commissions are included in the calculaIon of salary threshold, should we change pay structure to move workers over the threshold?
• Can we avoid reducIons in force by allowing natural ahriIon of newly eligible workers to occur?
• How can we beher track, report, and manage overIme?
Proposed Changes to Pay Equity Repor8ng
The U.S. Equal Pay Act
Prohibits sex-‐based wage discriminaIon between men and women in same establishment who perform jobs that require substanIally equal skill, effort and responsibility under similar working condiIons
Pay differenIals are permihed if
based on seniority, merit, quanIty/quality of producIon,
or factor other than sex
It is employer's burden to prove pay differenIal is valid
Pay discrimina8on: the risk to employers
19,724 charges under the Equal Pay Act since
1997
About 1,000 charges per year
Companies face reputa6onal
and financial risk if charged
Pay equity repor8ng changes proposed for 2017 repor8ng year • Every year, employers with 100 or more employees need to fill in EEO-‐1 form
What EEO-‐1 form asks now:
What the proposed change adds:
• Employee numbers by job category, sex, race, ethnicity
• 12 pay bands that workers fall into
• New pay data would help enforce federal pay discriminaIon laws
How will you assess the poten8al impact?
To reduce the risk to your organiza6on’s reputa6on, how can you: • Ensure you aren’t blind-‐sided by the results the first Ime you fill in the new report?
• ConInuously monitor pay equity to see where the greatest risks are?
• Discover whether pay dispariIes exist for valid reasons?
• Get insights for how to address the risks?
Employee Misclassifica8on Risks
The Department of Labor takes misclassifica8on seriously “The misclassifica8on of employees as independent contractors presents one of the most serious problems facing affected workers, employers
and the en8re economy.”
Wage and Hour Division, U.S. Department of Labor
For employers, the risk is high
Back wages collected
“Studies suggest that 10 to 30 percent of employers may misclassify their employees as independent contractors.” U.S. Department of Labor
[VALUE]M [VALUE]M
[VALUE]M
[VALUE]M [VALUE]M [VALUE]M [VALUE]M
2009 2010 2011 2012 2013 2014 2015
Nearly $1.6 billion in back wages have been recovered by the Department of Labor’s Wage and Hour Division since 2009.
Employment rela8onship defini8ons may grow even more strict
“Applying the economic realiIes test in view of
the expansive definiIon of ‘employ’ under the Act, most workers are employees under the FLSA.”
Administrator’s Interpreta8on No. 2015-‐1, U.S. Department of Labor
How will you assess the poten8al impact?
To reduce the risk of fines, lawsuits, or damage to your organiza6on’s reputa6on, how can you: • Get a grasp of what the cost of reclassifying contractors as employees would be?
• See the reporIng structure of your conIngent staff in context with your full-‐Ime employees?
• Get insights for how to address the risks?
Technology choices for staying ahead of workforce legisla8on risks
TRACK ANALYZE & PLAN
Employees Hours Wages Commissions Gender OverIme Absenteeism
Who is exempt? How much risk do we face? What will it cost us? What alternaIves do we have? If it changes, what then? How are ahriIon, hiring, engagement, etc. impacted?
The Technology Choices
Business Intelligence
Embedded “AnalyIcs”
Workforce Intelligence
• Tools that allow you to create reports and dashboards on any data
• Repor8ng that comes with your HRIS, ATS, etc.
• Dedicated workforce analyIcs and planning
Business Intelligence
Business Intelligence
• Tools that allow you to create reports and dashboards on any data
• Extremely flexible – you can build whatever you want
• Extremely difficult and expensive – requires very technical and expensive skills
• Slow – you (or IT) have to build it all yourself
BI challenges and risks
Complex data integraIon
Costly data warehouse
Time-‐consuming report development
No integrated security
BI project costs: A TCO that keeps growing
Embedded HR analy8cs
Embedded HR analy8cs
• Repor8ng that comes with your HRIS, ATS, etc.
• Bundled into an HR system promises fast and cheap
• Only reporIng – not analyIcs • Not integrated & connected
The problem: Answers to ques8ons about workforce risk live in disparate systems
Extrac8ng answers from embedded analy8cs requires extra cost and 8me
Data integra6on Extra cost and 6me
Historical data Extra cost and 6me
Future changes Extra cost and 6me
Workforce intelligence
Workforce intelligence quickly connects disparate workforce data sources to answer ques8ons about risk
Workforce Intelligence
Use workforce intelligence to help you avoid unnecessary over8me costs • Eliminate guesswork and error-‐prone spreadsheets
• IdenIfy the best, most cost-‐opImized workforce plan
• Track against that plan; manage overIme with confidence
Use workforce intelligence to discover pay equity issues and address them • ConInuously measure pay equity • Discover where the greatest risks are
Use workforce intelligence to discover pay equity issues and address them • Adapt programs and policies to achieve pay equity • Use data to support validity of apparent pay dispariIes • Confirm valid reasons for pay differenIals—such as longer tenure, more educaIon, or higher performance
Use workforce intelligence to get a comprehensive view of your workforce • Understand costs and effects of moving to more or less conIngent labor
• Reduce risk of non-‐compliance by understanding roles and reporIng structure for all full-‐Ime and conIngent workers
Take the next step
Resources available at www.visier.com
Download your copy Download your copy
Subscribe to the Workforce Intelligence Blog
#WFwebinar
Please complete the webinar evaluation.
#WFwebinar
Register for the next Webinar!
Workplace Culture: Fad or Strategic Advantage?
Wednesday, September 14, 2016
Webinars start at 2 p.m. Eastern / 11 a.m. Pacific
Register for all upcoming Workforce Webinars at events.workforce.com/webinars
OR click the icon on the widget bar!