Summer Interns – A Great Source of Free Labor?
It is that time of year again - college and high-school kids looking for practical, hands on work experience. Lured by the possibility of future “real” employment or at least a way to beef up the resume, these students are willing to work for free. According to a 2012 Time Magazine article, there are about 1.5 million internships in the U. S. each year, and it is estimated that up to one-third of them are unpaid.
So what is the big deal? Having an intern seems like a “win/win” for all - the student gets hands on experience, and you get free help for the summer. Right? Well, probably wrong if you are a private sector employer.
Here is how it works.
Federal and state wage and hour laws establish requirements for employees. Most employers are pretty familiar with the basics – minimum wage, breaks, overtime, and the exempt/nonexempt classifications.
These wage laws generally apply to all employers and employees unless they are somehow excluded. For example, these very limited categories of workers are excluded from wage laws:
• Casual laborers working in private homes (think baby sitters)
• Volunteer workers who perform services for educational, charitable, religious, government or non-profit organizations (think Sunday School teacher, Habitat for Humanity volunteer)
• Newspaper carriers (think paperboy or girl)
• Those involved in forest protection and fire prevention activities
• Inmates and others in custody (think prisoners)
• Elected or appointed public officials
• Certain agricultural employees if they harvest by hand and are paid piece meal
So, in general, volunteers (unpaid interns) are not allowed in “for-profit” businesses.
“Academic” Student Internships – can these be unpaid?
Just calling it a student internship doesn’t make it legit. You can have unpaid student internships, but it is difficult. Student internship programs must specifically be designed to provide students with professional experience in the furtherance of their education, and the training must be academically oriented for the benefit of the student. These internship programs are generally sponsored through a university, and the student usually receives academic credit. To qualify, the U.S. Department of Labor has provided a six factor test. All six factors must be met in order for an intern to work unpaid; otherwise a student intern is considered an employee and must be paid appropriately.
1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
2. The training/internship is for the benefit of the intern;
3. The interns do not displace regular employees but work under close observation;
4. The employer that provides the training/internship derives no immediate advantage from the activities of the interns, and on occasion the employer’s operations may actually be impeded;
5. The interns are not necessarily entitled to a job at the completion of the training period; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
The easiest – and legal solution– is to pay your interns. Think of it as a three month on-the-job interview. This is the true “win/win”. The intern gets experience and pay, and you, the employer get extra help in your workplace and a possible future employee.
Like many employment-related regulations, these rules can be complex. If you have any questions, we encourage you to contact us. Personnel Management Systems can assist on this or any other Human Resource issue.
This month we are exploring a lighter topic although one that I’m sure everyone can relate to – Office Taboos. I know HR people can relate to this topic because sometimes we are asked to intervene in rather difficult and sometimes embarrassing situations.
This topic can be a bit sensitive, so we have to be careful. We all know that beauty is in the eye of the beholder. Not everything on this list would be considered a taboo by everyone, and of course quantity matters – for example, trimming a fingernail one time may not be offensive to your
co-worker but using nail clippers at every staff meeting might be!
So with all due respect here are some common office taboos:
1. Poor Personal Hygiene. If you don’t shower, you probably smell bad or at least will smell bad by the end of the day. Give your co-workers a break – shower, brush your teeth, and wear clean clothes daily. Don’t do your personal grooming at your desk – no flossing, hair brushing, nail clipping or applying makeup.
2. Poor Personal Health Habits. If you are sick, stay home. Wash your hands often, and cough in your elbow.
3. Wear Appropriate Clothing. This of course depends on your type of workplace. But in general, showing too much skin is not okay, and shoes are usually not optional accessories. If you are not sure what kind of dress is appropriate, take cues from your boss. The old adage is a good one – “dress for the position you want, not the one you have.”
4. Gossip. Don’t be the source or instigator of office gossip.
5. Email Etiquette. Please, please do not hit “Reply All” unless you really think it is critical that I know you will be coming to the office potluck.
6. Pets. Some offices really do allow dogs at work. But don’t assume that you can bring Fido in without asking first. One person’s cute cuddly dog is another’s raging allergy attack.
7. Cooking. Most workplaces now have some kind of break room or kitchen. It should be obvious that you need to clean up your mess (dishes put away or in the dishwasher, etc.) but less obvious may be the smells that can be left behind. It is probably not a good idea to cook fish, broccoli or even microwave popcorn.
8. Perfumes and Colognes. More than just a drop is probably too much. Save the perfumes, colognes, and strong smelling lotions for after work.
9. Cell Phones. For some reason when people answer a call on their cell phone their voices automatically go up several decibels. Everyone within 50 feet can hear your personal call. In some cases, we can hear both sides of the conversation. Better to move to a more private area to make your call. And, yes, you may have a hilarious ring tone, but after the fourth or fifth time it’s just not that funny.
10. Undergarments. Undergarments are meant to be "under." Your underwear should not be playing peek-a-boo with your co-workers.
11. Mistakes and Goofs. We all make mistakes at work. It is not necessary to point out your co-workers’ goofs to all the other employees.
12. Sex Life. Your sexual exploits should be private. We really don't need to know - TMI!
13. Cursing. Yelling, cursing, screaming should be directed to your favorite politician, not to your co-workers. Like my mom said - "no potty mouth."
Face it. We work in close quarters. The average office space per worker is less than 150 feet. That’s not much personal space. Take personal inventory. Are you being as respectful as possible? Are you guilty of an Office Taboo?
Call us if you need an HR person’s advice or intervention.
Share other Office Taboos at taboos@hrpmsi.com
What is Workplace Violence?
Images of shootings, robberies, and assaults first come to mind. But workplace violence encompasses any threatening behavior or verbal or physical abuse in the work environment. Harassment and bullying can also be considered workplace violence, as well as domestic abuse when the resulting assault or threat occurs in the workplace.
According to a 2012 survey by the Society of Human Resource Management, 36% of the companies surveyed said there had been incidents of workplace violence in their places of work. As employers, we have to deal with threats, intimidation, physical altercations, and other abusive behavior - not only from employees but also from vendors, customers, and relatives of employees. Although workplace violence resulting in death remains rare, it does still occur; workplace violence is the second leading cause of death on the job and the first leading cause of death on the job for women. Because of the danger to employees, to the public, and to the company, effectively managing employees who are in stressful situations and preventing workplace violence should be important to every employer.
Prevention
As employers, we have a responsibility to provide our employees and customers a safe environment. The following tips provide some insight on policies and procedures that can help prevent violent outbursts. While an employer cannot predict the behavior of every employee or every person associated with the company, well-thought-out procedures can decrease the chance of a violent outburst and help employees handle situations before they escalate.
Create a Workplace Violence Policy
Clearly state your company’s zero tolerance for workplace violence in a written policy and enforce the policy consistently. A comprehensive policy prohibiting all types of violence including verbal and physical threats, fights, intimidation, physical destruction of property, sabotage of company products, extremely violent behavior, and, in some cases, even gossip and innuendo sets the standard for company behavior. Such a policy allows you to confront inappropriate behavior at its onset and establishes the rules for your employees. All employees must be confronted about their inappropriate behavior. You can stop behavior from escalating and you can demonstrate to all other employees that you take this matter seriously.
Conduct a Workplace Audit
Conduct an audit of your workplace or hire an expert to assess the security at your company. Such an audit should include an analysis of previous incidents of workplace violence, identification of work sites, jobs, activities, and procedures that are associated with an increased risk of assault (e.g. late hours, employees working alone, situations where money is exchanged with the public), evaluation of the physical features of your worksite (looking for areas of risk such as isolated areas, lack of telephones, lighting deficiencies etc.), and an assessment of the effectiveness of existing security measures. This type of audit will make you aware of areas of concern that should be addressed to ensure employee safety. For example:
• Do you need security cameras or a security system?
• Are visitors allowed to be unaccompanied? How are visitors identified?
• Who has keys or key cards to the office or place of work?
• Are there certain hours when the doors must remain locked?
• Is the parking lot well lit?
• Do employees often work alone?
• How is cash handled?
Train your Managers
Having an Employee Assistance Program (EAP) is a great first step in preventing workplace violence by providing a secure resource to employees. The EAP can also educate your managers on how to recognize and handle potentially violent employees or employees who may be victims of domestic violence. Supervisors and managers are usually in the best position to identify problems early on, deal with performance issues, and alert human resources and upper management as to any difficulties. Provide your employees with training so that they have the confidence and skills to manage volatile situations.
Deal with Performance Problems Promptly
Address performance problems consistently and quickly. Employees who believe they have been targeted for unfair or unreasonable discipline are susceptible to feelings of anger and powerlessness. They may become vocal about their unhappiness with the employer and may feel a need to lash out. If performance problems are dealt with promptly and the employee knows that the same standards are applied to all employees, he or she will generally perceive the discipline and treatment as fair.
Help your Employees Deal with Stressful Situations
Family and marital problems and stress can trigger violent behaviors. While an employer cannot control an employee’s personal life, an employer can establish avenues of assistance so employees can get help early on. Whether you offer the assistance of a formal EAP, offer support through your medical plan, or step in with time off of work, the company benefits when employees learn to manage and work through their personal and work-related issues in a positive, non-violent manner.
Prevention of workplace incidents through implementation of clear policies, training, good employee relations, and referrals for employees who need assistance are key to maintaining a healthy work environment. Take the time to figure out what your company can do to assist your employees. If you need assistance with this, or any HR issue, please call on us.
In the Human Resource management business we often find ourselves assisting companies who experience firsthand the complexities of human behavior - usually cases of difficult employee behavior. We are often asked the rhetorical question “why did he do this?” or sometimes a manager will describe an employee’s behavior and then ask us to “fix” it.
We can’t claim we have all the “fixes” but we do have some pretty good diagnostic tools - or models - that may help. Models aren’t perfect but they can be useful in understanding complex things like employee behavior.
One of the most practical employee behavior models is described in a book called Analyzing Performance Problems by Robert Mager and Peter Pipe. It is an “oldie but a goodie” published in 1984. (I have a faded paperback on my shelf with well-worn page corners.) The book presents a well-thought-out model of employee behavior, useful to all you frustrated managers.
Mager bases his theory on the premise that “solutions are like keys in locks; they don’t work if they don’t fit. And if the solutions are not the right ones, the problem doesn’t get solved.” So, to determine the correct solution to an employee problem this model suggests asking yourself a series of very specific questions about the employee’s behavior (performance). The answers will help identify the cause of the poor employee performance and if we are lucky, the key to fixing it.
• Start by articulating the performance problem. As a manager, ask yourself “what is the difference between what is being done and what is supposed to be done?”
• Once you understand the problem, ask yourself “is it important?” and “does it matter?” If it isn’t important or doesn’t matter, then we can “solve” the problem simply by ignoring it.
For example, the problem may be that our employee Joe comes to work ten minutes late every day. But when you ask yourself if it matters, the answer may be “no” because Joe still gets all the work done. In this case, ignore the problem and it goes away.
• If the problem does matter and is important, then ask yourself another critical question. “Is it a skill deficiency?” In other words, if Joe had to perform the task, could he? If his life depended on it, could he perform the job to your satisfaction?
Oftentimes once managers identify a performance problem, they automatically assume that the best solution is more training, according to Mager. But - if poor performance is not due to a skill deficiency, then all the training in the world will not solve the problem.
For now though, let’s assume that the poor performance is caused by a skill discrepancy. Even if Joe’s life depended on it, he still could not perform the job to your satisfaction. In this situation training is appropriate.
• What type of training? This model suggests asking another set of questions such as “did Joe perform the task in the past?” If the answer is “no” - Joe never satisfactorily performed the job, arrange for formal training. If Joe performed the job at one time but now has forgotten how to do it, then practicing the task instead of undergoing formal training may be all that is necessary.
• Another helpful question may be “does Joe receive feedback after performing the task?” If the answer is “no” then to improve accuracy maybe all Joe needs is feedback from his manager.
Now, let’s assume that when we asked our critical question “if the employee’s life depended on it, could he do the job?” and the answer is “yes” – then we know that additional training won’t help; the solution must be something else. Again, this model suggests probing further using another series of questions. For example, think about Mary, an employee who used to work very quickly but now performs her work slowly. In Mary’s case the question to ask is “is performing the work quickly punishing to Mary?” Well, yes, in some offices the quick employee is “rewarded” by getting everyone else’s unfinished work. Performing quickly was punishing! Solution - remove the punishment. Make people do their own work!
Other interesting questions to ask include “is nonperformance more rewarding?” In Mary’s example the slow performers were actually rewarded because any unfinished work was given to someone else.
This model, of course, is not perfect. Diagnosing human behavior never is. But models can be helpful. At the very least, they can cause us to stop and ask a few questions before jumping headfirst into a bunch of expensive solutions that won’t work.
For help and ideas on dealing with your employee problems call the HR professionals at Personnel Management Systems.
Yes, it is true. We get some fun and entertaining questions during the holidays. Here are a few:
Q. My employer is open for business on every holiday, some of which I have to work. Isn’t this against the law?
A. Many businesses are open during the holidays. It is not against the law.
Q. As an employer do we have to provide paid holidays?
A. No, employers are not required to provide paid holidays. Many employers do, but it is considered a benefit.
Q. Can we require employees to work on holidays?
A. Yes, employers can require employees to work on a holiday.
Q. Do we owe non-exempt employees overtime if they work on a holiday?
A. Employers must pay non-exempt employees for all hours worked, but the pay does not have to be at an overtime rate - unless the hours are in excess of 40 in the workweek. (Note: some states treat overtime requirements differently.)
Q. If an employee works 40 hours in a week and then takes a paid holiday, do we owe him overtime?
A. The law requires that employers pay for actual hours worked. Paid holidays are not considered actual hours worked, so they can be paid at straight time rates. Conceivably the employee could be paid for 48 hours of straight time. Some company policies may treat these holiday hours differently, but this would be considered an employee benefit.
Q. What if an employee is on FMLA, PTO, Sick, Vacation or Personal leave when a holiday occurs? Should she receive holiday pay?
A. There is no law that requires holiday pay while someone is on a leave of absence. Some company policies might address this issue differently.
Q. How do we handle holiday pay for non-exempt employees who work a compressed workweek - working four days a week, ten hours a day?
A. This would be set by company policy. For example, some employers would pay the employee only if the holiday occurred on a day that the employee would normally work.
Q. How much holiday pay should a part-time employee receive?
A. Holiday pay for part-time employees is not required (but if you do, paying the normally scheduled hours or a proration based on number of hours typically worked are options.)
Q. Can we require employees to complete an introductory period before becoming eligible for holiday pay?
A. Yes. A well written employee handbook would normally address issues like this.
Q. Are Christmas bonuses from the company taxable?
A. The IRS is more like Scrooge than Santa Claus. Yes, bonuses are considered compensation and taxed just like regular income. Sorry!
Q. If an employee “volunteers” to stay late to decorate the office or buy the office gifts on his own time, do I have to pay him for that time?
A. If the employee is a non-exempt employee, he must be paid for all hours worked, and yes, this would include time spent decorating the office and buying “office” gifts.
Q. We have mandatory Christmas religious observance events such as prayer and requiring employees to participate in singing “Silent Night” at the Christmas party. Is this ok?
A. Mixing religion and work can get complicated. Most HR people would advise using extreme caution particularly when an employer makes participation “mandatory.” Holiday lights, gift exchanges, parties, even wishing people “Merry Christmas” are all good. Forcing people to pray or sing a particular song is probably crossing a line that most HR people find troublesome.
Q. We have a Christmas tree and a Nativity scene in our office lobby. Isn’t this prohibited like it is in the public schools?
A. No, public schools are just that - “Public”. A private enterprise is not regulated by the rules regarding the separation of church and state.
Q. Is ok to hire school age kids during the holidays without a work permit because they are not in school and out on holiday?
A. No, if you hire minors, the employer needs a work permit.
Like many things in HR, simple questions often require complex answers. The rules dealing with pay can be confusing. If in doubt, ask an experienced HR person or your employment attorney.
Marijuana, Cannabis, Pot, Weed, Grass, Mary Jane, Bud, Herb, and my favorite – Wacky Tobacky
Marijuana has been with us a long time. Its earliest recorded use dates back to the third millennium BC. It is estimated that 162 million people use marijuana on an annual basis, and 22.5 million use it on a daily basis. Now, 5000 years later, the citizens of the State of Washington have legalized its use.
Or have they? And what does this mean to employers? Can employees show up to work stoned? Will we see pot brownies for sale at the grocery?
Some of the answers to these questions will have to wait, but here is what we do know:
Yes, Washington voters approved Initiative Measure 502. Effective December 6, 2012 anyone over 21 may possess up to one ounce of marijuana. However, federal law has not changed, and possession of the Wacky Tobacky is still against federal law.
And, even though use is legal under Washington law, you still can’t smoke marijuana in public, and you can’t drive stoned. Having more than 5 nanograms of THC in a driver’s blood would be considered intoxicated.
Employers can continue to have policies against alcohol and drugs in the workplace and continue to test for their presence. Nothing in the law prohibits employers from disciplining, terminating or not hiring someone with marijuana in their system.
In regard to brownies and other possible entrepreneurial opportunities because of the passage of 502, I guess we will have to wait and see.
For many of us the fall and winter months mean that the vacation season has come to an end. For some employers, it means people are finally back in the office - ready to get some work done. For some employees, it means a long wait until springtime and next year's vacation.
The great American vacation is something most of us relish, and many of us have strong childhood memories of family vacations - good and bad. Some families plan, anticipate, and save for vacation all year long. It is hard to imagine life without a vacation, but not very many years ago the idea of a vacation was pretty novel and perhaps even something exclusive to the very rich. I doubt that our ancestors working on the family farm hitched up the wagon and took off on a family vacation! The concept of time away from work evolved as our economy moved from agricultural to industrial, and certainly organized labor played an influential role.
Of course, vacations are not exclusively an American phenomena. In fact, many European countries are far more generous about vacations than we are. The European Union actually requires employers to provide at least 20 days of paid vacation per year, and many countries provide significantly more. Mandatory paid vacation is not required in the United States although 75% of employers do provide at least some paid vacation. Regardless of your opinion on whether or not we should be more like Europe, suffice it to say that the relationship between worker productivity or worker satisfaction and the amount of vacation one receives is quite tenuous.
Most people would agree that taking time off from work is a good idea. Some say it helps "recharge the batteries"; others claim it reduces their stress. These things may or may not be true, but either way, most employees truly value their time off. In fact, unlike the baby boomers, the younger generation has embraced vacation as a substantial piece of their pursuit of "work/life balance". Good luck trying to convince a 25 year old that he or she needs to work three years before getting time off!
As employers, we have to draft vacation policies that are appropriate for our industry and our employees. To be competitive we have to take into account industry norms and expectations. There is no rule book though, so oftentimes employers struggle with making decisions around not only how much vacation time to provide but even who gets it. For example, do part-time employees receive paid vacation or just full-time employees? What about PTO instead? Experienced Human Resources professionals can be very helpful in this regard. Human Resource people will help you decide how much vacation should be provided, who receives it, and how it accrues. For example some employers accrue vacation on a calendar year. Others may accrue vacation on an employee's anniversary year or on a per payroll period or hours worked basis.
Yes, you could probably figure out how to write a vacation policy yourself. Asking an HR person to help you will make it a whole lot easier. PMSI can help you write or refine a vacation policy appropriate for your organization. If you need further assistance on this or any other Human Resource issue, call on Personnel Management Systems.
Personnel(ly) Speaking is a monthly comment on HR issues of importance. It is intended to provide general information and must not be construed as legal advice. Reproductions are allowed as long as credit for this information is given to PMSI. We welcome your comments, questions, and concerns. © PERSONNEL MANAGEMENT SYSTEMS, INC., Corporate Office, (425) 576-1900
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Strategic Planning: There’s No Silver Bullet – Twelve Tips for Value and Results
According to the legend, David McCanles called Wild Bill Hickok out to duel. Hickok walked out into the street and fired one shot – at a distance of 75 yards – killing McCanles instantly. Shoot now, aim later worked well for Wild Bill in his situation. It doesn’t work so well for leaders who need to define and execute significant changes for business growth and success.
Creating a new strategic plan is a big deal.
Here are some essential considerations if you expect to build a viable strategic plan that gets executed.
• Accept that you aren’t Wild Bill and there is no silver bullet. To do this well takes a comprehensive effort and commitment to a solid process - including the time and resources necessary to achieve success.
• Include the right players. This includes those with ultimate accountability for leading execution and subject matter experts when and as needed. Consider also including a high potential leader from a lower level for whom this would be a great development opportunity. Depending on your organization, there may also be an opinion leader whose involvement can eliminate barriers to execution.
• Get participants ready to contribute. It is common for executive teams to be unaccustomed to working together in the way that is essential to creating a great strategic plan. In a good process, discussions are dynamic and sometimes contentious. Legacy and personal styles can get in the way. Turf protection can be a barrier. There are varying levels of communication and ego involvement. A solid process sets individuals and the team up to succeed.
• Trust the process. There will be parts of a robust strategic planning process that you may not enjoy. Do it anyway. There also should be some fun in the process. Remember, however, that this is hard work. You are defining the future of your business. Employees and shareholders are depending on you to do it well.
• Challenge assumptions. The volume and velocity of change can make what was true yesterday untrue tomorrow. Identify your assumptions and check their validity.
• Take a guided tour through the external environment. Opportunities to take and risks to be mitigated exist in the realities of the world over which we have no control. It takes a robust process to make sure nothing is missed. Be ready to think beyond.
• Know what you are and dream of what you can be. This applies to both your leadership team and the business. Both may need to be something different to achieve your vision. Be ready to let go of status-quo.
• This is about “what” not “how.” Discussions about how an initiative will be done come after clearly defining what the initiative is. Avoid being pulled into the weeds of “how” – that’s for tactical execution. It’s too easy to talk yourselves out of committing to the right future-defining initiative if the challenge of “how” gets in the way.
• Resist the temptation to vote. Creating a strategic plan should be a collaborative process. It includes dynamic, high energy, and even heated discussions. Resist the urge to settle impasse with a vote. The history books are full of examples where the majority was flat wrong. Take the time to understand both what people think and why they think it. Someone ultimately has the authority to make and accept accountability for that decision. If you are that person, do not do so too soon.
• Accept the price of admission. Energy, enthusiasm and an eye to the future are expected of all players. Being a self-appointed persistent devil’s advocate is not good, yet diverse opinion is essential. Argue your point with passion and reason. It is ok to disagree with the direction that is ultimately taken. Then you must switch gears. Support the direction chosen. Otherwise you can no longer be a leader in the business. Passive-aggressive saboteurs do not belong on a professional leadership team.
• Belly up to the bar individually and hold each other accountable. Being a leader in an aligned team of smart, competent colleagues committed to each other and the business is fun and satisfying hard work. It is essential to making the good stuff happen that creates the future of the business.
• Celebrate progress and recognize personal and team contributions. Recognizing and rewarding small successes helps to create bigger successes. Celebrate and get creative in doing so. Include the individual leader accountabilities in your performance management program. Lead and manage the process of plan implementation.
Being a professional business leader should be hard, yet satisfying, work. Too often it is harder than it needs to be and much less satisfying. Both characteristics are enhanced when a committed team with a clear route to the future is working together to make it happen. Make it so.
Randy Boek, is the author of this month’s article on developing strategic plans for organizations. If you need help or have questions about developing a strategic direction for your business, feel free to call on us or contact Randy directly.
Republication permission: Randy Boek, Professional Outsider/President, Route2Results. “Strategic Planning: There’s No Silver Bullet – Twelve Tips for Value and Results” www.route2results.com randyb@route2results.com (425) 359-8506.
How Do I Compete Against the Big Boys for Tech Employees?
You have probably heard the news. For tech employers there is a labor shortage. And to make it worse, the Big Boys (Microsoft, Amazon, Google, Facebook, etc.) are hiring – seriously hiring.
What is a small company to do?
Don’t panic. The good news is not everyone wants to work for giant companies. In fact, just the opposite - many people prefer to work for smaller companies. The trick is how do you position your organization so that you can attract and retain these highly sought-after employees?
Here are some ideas. Not all will work for every organization but give each of them some thought. Perhaps a tweak or two and you might end up with an idea that no one has yet thought of.
1. Make a difference. Many people want to “make a difference” and be a part of an organization that really improves people’s lives. Many “mission driven” non-profits have this advantage over the private sector.
2. Make it fun. People want to work in organizations that are fun. And, I don’t mean, go out and buy a foosball table. Instead, create an engaging, interesting work environment where people embrace humor and enjoy being around one another. If you think your work environment can’t be fun, read Fish! by Stephen Lundin.
3. Work Life Balance. The truth is many people don’t want to work 12 hour days. They want to be home for dinner and spend time with friends and family.
4. Work Environment. Look around. Do people look comfortable? Are your break rooms and restrooms clean and well stocked? Is it too loud, too cold, too crowded?
5. Technology. Has your organization embraced the newest technology? Tech workers want access to the latest software and equipment.
6. Quality of Management. It is a buyer’s market. Tech workers have choices and oftentimes will leave a job because of bad management.
7. Open communication and collaboration. We have been in business for almost 30 years. In that time period we have surveyed thousands of employees. Lack of communication is always one of the top complaints. Employees expect a high level of communication and collaboration between themselves and management.
8. Continuous Learning. Tech workers want to be in an environment where continuous learning is part of the culture. This could mean a strong mentor program, in-house speakers and reimbursement for course work and certifications.
9. Pay and Benefits. Yes, pay and benefits are important but that doesn’t mean as a small company you have to pay more than the Big Boys. You just have to be competitive and “fair” to at least neutralize this issue. Some tech workers will chase pay, and you may just have to accept this and let them go. Others will look at the whole package. This is how you can compete and win!
If you want to attract and retain your tech workers then pay competitively, turn the job into something fun and meaningful and provide the best tools and work environment that you can afford. Have a management team in place that truly understands the value of communication and understands and respects people’s desire to have balance in their lives.
PMSI can help with your employee issues and needs. Call on us.
401(k) plans have been a staple of our retirement planning since 1978 when they were first created. There are over 72 million Americans who have self-directed 401(k) plans, over 3 trillion dollars!
For the most part, people seem to understand the basic idea – money is taken out of their paycheck (pre-tax) and invested. The investment returns are tax free until withdrawn at retirement.
What is not so clear is what does all of this cost? Or, how much of my money actually gets invested versus being paid out in fees, commissions and expenses? Good question. In fact, when surveyed many people think that their plans are “free” or that the employer pays all the expenses. In good economic times people seem to ignore fees. In poor economic times fees can be a big deal and wipe out a significant amount of the return.
Well, of course, we all know nothing comes free, and as an employer you have a fiduciary responsibility to make sure that the 401(k) services provided are appropriate, and the cost of the services are reasonable. If participants are allowed to direct their investments, then the employer is obligated to make sure the participants have all the information in regard to the plan so they can make informed decisions. Compliance is critical. As a Plan Sponsor, you have fiduciary responsibilities under ERISA. Non-compliance exposes you to fines, excise taxes and even civil or criminal penalties.
This is serious business! The idea of informing participants about expenses sounds easy, but expenses can be hard to uncover, much less who is actually paying them. Plus, up until now, the industry has frankly been reluctant (or perhaps fearful) of making it easy for us to understand what the plans really cost. The good news for employers and participants is this is about to change.
Starting this month, say hello to ERISA Section 404(a)(5) and 408(b)(2). This is the Department of Labor’s (DOL) three pronged strategy (the third is a new Form 5500) to improve the disclosure of fees, making it easier for individuals and companies to truly understand what their plans are costing. This is good news for companies and individuals. We should all be able to make better, more informed decisions, and over time plans should become less expensive.
Here is how this will work:
Starting July 1, 2012, Plan Service Providers must disclose fees and services to employers (Plan Sponsors). This means the “vendors” that are making money off the plan need to disclose what they are doing and what they are charging. This includes the Investment Advisor(s), Record Keeper(s), Third Party Administrators (TPAs), and any others who may receive indirect compensation from the plan, such as accountants, attorneys, actuaries, and auditors.
By August 31, 2012, Plan Sponsors (employers) must disclose a whole bunch of information to employees. This information must include plan-related investment and administrative fees that may be charged to an employee’s account. And the services provided must be described. This includes the infamous “hidden” fees such as 12b-1 fees and sub-agency fees. This alone could be an “eye-opening” experience for employers and employees!
Next Steps:
1. Get help. Contact your investment advisor and ask for assistance. Much of this is new so even the experts are trying to figure it out. Don’t try and do this on your own.
2. Do some of your own research. Check out the DOL sites at www.dol.gov/ebsa/publications/undrstndgrtrmnt.html
www.dol.gov/ebsa/compliance_assistance.html
www.dol.gov/dol/topic/retirement/fiduciaryresp.htm
3. Watch the mail. Service providers are sending information that you will need.
This newsletter is, of course, just a summary of the fee disclosure requirements. There are complexities in the law that easily exceed most HR professionals’ expertise. Our suggestion is to bring in your own investment advisors or ask for an “independent” review of your existing plan. Benchmarking your plan against industry standards can be quite enlightening.
If you need further assistance on this or any other Human Resource issue, call on Personnel Management Systems.
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Mayumi Nakamura 
PSPINC QR Blog 
PSPINC 
The Coffman Group, LLC 
Kenichi Uchikura 
jim@paratex.com 
ASB - Seattle 
Seattle Execs. 