ORC Sightlines

April 2010

In this issue:

U.S. Government Intensifies Scrutiny of Pay Practices

The years between 2001 and 2008 saw less U.S. regulation in the area of human resources than the preceding 20. In that period, the Equal Employment Opportunity Commission (EEOC) and the Department of Labor lost between 20 percent and 30 percent of their staffs, and the federal judiciary became more employer-friendly with the appointment of conservative judges by President George W. Bush. However, with the end of the health care debate and the recess appointment of many Obama appointees, employers need to be prepared for renewed government attention on employment practices, especially in the area of compensation and pay discrimination.

The first bill passed under the Obama administration was the Lilly Ledbetter Fair Pay Act. The Ledbetter Act revived the “paycheck rule”, which means that every check an employee receives extends the statute of limitation for any pay discrimination claims. This increases the pressure on employers to ensure that employees are being paid appropriately for their entire career at the company. Congress is now considering the Paycheck Fairness Act, which would sharpen the teeth of the Equal Pay Act by:

According to Patricia Shiu, the Director of the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), that agency is looking to revise its regulations on compensation discrimination to increase oversight of federal contractors. In addition, the Secretary of Labor recently issued a call to employees to report any companies that are not complying with the Fair Labor Standards Act (FLSA). The Wage and Hour Division has added 250 new investigators to look into FLSA claims. EEOC and OFCCP have also added hundreds to their enforcement staffs.

ORC recommends that its clients audit all their human resources practices to determine whether any of them needs to be revised in the face of the increased focus on compliance. In particular, employers should review hiring and promotion procedures, and merit review and performance evaluations procedures, as well as recordkeeping and document retention practices. Specifically, ORC has been recommending that at least annually employers review their compensation for possible discrimination.

In that review employers should do a simple multiple regression analysis to determine which job titles require further review and then do a “cohort” analysis of any job title that shows adverse impact for the pay of women or minorities as compared with men or whites. A cohort analysis studies specific employees within the job title to determine whether the differences in pay can be explained by nondiscriminatory factors. ORC warns its clients that they should not implement an across-the-board pay increase for women or minorities, especially after the U.S. Supreme Court’s recent decision in Ricci v. DeStefano.

With the increased focus on the Fair Labor Standards Act, ORC recommends that employers also review their jobs to ensure they are properly classified as exempt or nonexempt. One particular job family to examine is sales. The Department of Labor is taking the position that employees in the service industry who are selling (e.g., mortgage brokers) are nonexempt.

A last area employers should be concerned about is whether they have independent contractors properly classified. The Internal Revenue Service is performing audits of independent contractors hired by employers and will be requiring those independent contractors who do not meet the IRS standard to be converted to employees.

It would be wise to conduct these reviews under legal privilege. However, be warned that, even if done under legal privilege, failure to act on the results of a compensation audit could put the organization at risk.

For more information on pay discrimination regulations or to talk about issues in your organization or a compensation review, contact Nita Beecher, Chair of the Global Workplace Compliance Network and Employment Law & Litigation Group.

Leveraging Social Media to Raise EHS Awareness and Promote Employee Engagement

The top three social networks—Facebook, Twitter and LinkedIn—collectively received more than 2.5 billion visits in the month of September 2009 alone. Twitter grew by more than 600 percent in 2009, while Facebook grew by 210 percent and LinkedIn by 85 percent. In fact, if Facebook were a country, its population would be fourth largest in the world.

The senior-level leaders who are members of ORC’s Western Occupational Safety and Health (WOSH) Group learned firsthand at their quarterly meeting last month how they can incorporate these tools in their environmental, health, and safety strategies. Joey Shepp, Founder and Principal of Earthsite: New Media for Sustainable Brands, urged participants to consider ten principles as they think about how to use social media for employee engagement, work team collaboration and remote training:

  1. Start with listening – Social media enables connections among employees.
  2. Beyond employees to community – More connections lead to collaboration. Network individuals along vectors of common goals and interests.
  3. Collaboration – Internal and external collaboration leads to innovation.
  4. Transparency – The more restrictions you place on employees, the less room you give them to be a real asset to your online reputation.
  5. Many to many – Expand social connections and affiliations. Join groups to expand interaction.
  6. Accountability – When contributing to social media sites, write what you know. Always ask, are you adding value? If it gives you pause, then pause.
  7. Real time – Part of the value of social media is the ability to stay connected and informed whether you’re at your desk or not.
  8. Interaction is the goal – Be a leader, create some excitement. Connect remote teams and engage employees.
  9. Personalization – Having users create profiles encourages accountability.
  10. Virtual is real – Make attendees feel they have attended a physical meeting with practical take-a-ways.

The time to make a plan and get started with social media is now, Shepp argued. Company cultures are changing to stress collaboration and teamwork, and younger generations in the workforce expect to communicate via social media.

Nicole Mack, Communications and Client Relations Manager for the WOSH Group, unveiled WOSH’s own foray into the social media world. ORC recently launched a Western OSH LinkedIn Group, soon to be followed by a Facebook Fan Page and Twitter updates on WOSH activities and news. These vehicles will give network members more opportunities to stay abreast of developments and best practices, engage in meaningful conversations about shared areas of interest and collaborate with corporate peers.

For more information about these activities or to find out if your company might be eligible to participate in the Western Occupational Safety and Health Group, contact Judi Freyman, +1-916-626-6820.

Developing R&D Managers

Good management is good management, so it shouldn’t be necessary to train R&D managers differently or separately from those in any other function…should it?

HR leaders in R&D organizations of Fortune 500 companies and government laboratories explored this question as well as best practices for developing technical managers during the Human Resources in R&D meeting hosted by Amgen in April. Some of the companies represented have opted to include first line R&D managers in the same training as other managers to break down silos between the functions and help managers expand their personal networks. Others, however, see definite benefits in training R&D managers separately or adding R&D-specific modules onto corporate-wide training, among them being able to:

A number of companies have worked upward reviews into their development programs or performance reviews for technical managers, not only to give managers insight into how they are perceived by their subordinates and colleagues, but also to provide a composite picture of the organization’s leadership strengths and weaknesses to help guide future learning and development interventions.

Management development is not a single event. Especially in R&D environments, where managers often have little supervisory experience or even, in some cases, little experience in the corporate world, before being assigned managerial responsibility, managers benefit from ongoing opportunities to work through situations with peers and experienced role models. That’s one reason mentoring programs tailored to the R&D environment have become popular in HRRD member companies. (Another reason is the opportunity for visibility, networking and coaching that mentoring programs provide talented women and ethnic minority scientists and engineers.) There is considerable variation in the way these are managed. Several best practices emerged from the discussion:

The HR in R&D Network is open to HR executives and business partners who support the R&D function in large companies and government laboratories. For more information, contact Michal Fineman or Tara Finnegan.

 

 

 

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