May HR Newsletter

HR Alerts

Sexual Orientation Protected in     Employment, According to Seventh Circuit Court of Appeal
On April 4th, the Seventh Circuit Court of Appeals became the first federal     Appellate Court to rule that under Title VII of the Civil Rights Act of     1964, sex includes sexual orientation. The Court’s ruling creates law only     in Indiana, Illinois, and Wisconsin.

Every other Circuit Court of Appeals, except for the Ninth Circuit, has     ruled that the term sex in Title VII does not include sexual orientation;     these rulings were issued between 1979 and 2012. Federal Courts of Appeal     often try to align their rulings with the decisions of the other Circuits.     However, the Seventh Circuit decided that it was time to take a fresh look     at this question in light of the Supreme Court’s 2015 decision in     Obergefell (legalizing same-sex marriage) and the general shift in societal     norms.

The fact that the federal Courts of Appeal have issued conflicting     decisions means that the question is more likely to be picked up by the     Supreme Court should other litigants appeal their cases to the highest     level. The defendants in this case, Hively v. Ivy Tech Community College,     have said they will not appeal.

Illinois and Wisconsin already have state laws that create employment     protections based on sexual orientation, so there are no action items for     employers in those states. Employers in Indiana, however, should ensure     that their policies and practices do not allow for discrimination based on     sexual orientation.

The Real Costs of Employee     Turnover—And How to Measure Them

Employee turnover is     expensive—more so than you might think. According to a recent survey by the     Society for Human Resource Management, the average cost-per-hire is $4,129.     However, turnover costs can vary depending on the length of time it takes     to fill the role, the importance of the position to the employer, and the     employer’s industry. Some costs are easily calculable, such as those of     recruiting, hiring, and onboarding. Other costs can be difficult to     measure, such as the impact of a termination on employee engagement. Easily     measurable or not, all these costs hurt your bottom line.

Fortunately, many of the costs of turnover can be measured and predicted,     so you can budget for employee turnover and operate with a reasonable sense     of your yearly turnover costs. Here are the main expenses to expect:

Recruiting and hiring. These costs include the expenses for     advertising the open position, background checks, and any pre-employment     testing you do. They also include internal operational costs for the time     taken to market the job, screen applicants, and interview candidates.

Onboarding. Here we have the costs of orientation and training     materials, as well as management’s time to provide training and additional     supervision to the new employee.

Burden on staff. Having an empty seat means other employees have to     pick up the slack. Depending on your role, they may also have to cover for     you while you spend valuable time looking for a candidate to hire. Even     after the new employee is hired, it takes time to train new people. You may     even have to plan for overtime so that employees temporarily assigned other     job duties can still get their own work done.

Productivity loss. Let’s face it, even with everyone pitching in and     working extra time, productivity will drop. And, after the hire, it will     take time for the replacement to reach the former employee’s level of     productivity. As it can take on average more than 40 days to fill a     position, and longer for the new person to master the role, this     productivity gap is no small thing.

Mistakes. Errors are likely to increase when employees are covering     the duties of their former coworker and when the new hire is learning to do     the job. These are, unfortunately, a cost of doing business.

Disengagement. Employee engagement is likely to be low when turnover     is high, and if a terminated employee was well-liked, morale might take a     momentary plunge after the termination.

The first three costs listed above are ones you can and should track.     They’ll give you a history of your costs-per-hire and enable you to predict     future turnover costs. You can estimate annual turnover costs by adding up     these costs for each employee and multiplying the total number by your     annual turnover rate.

The latter three costs may, to some extent, be inevitable costs of doing     business, but you can minimize those costs by working to decreased     turnover. Put thought and effort into your recruiting, hiring, and     onboarding procedures so you hire right the right time. Engage your     employees and retain them longer by building and maintaining a healthy     company culture. We have lots of resources on the Support Center to help     you bring in and keep the best people.

Q: An employee has requested company wage guidelines. Are     we required to show these to them?

A: No. Some employers choose to disclose the salary ranges for jobs,     but you are not required to show an employee your company wage guidelines,     nor do you need to share with them what other employees make or what     criteria you use to determine their individual salaries.

However, you may need to allow employees access to their own personnel file     or payroll records upon request if doing so is required by state law or     your company policy, and I would not advise preventing employees from     discussing their wages or other terms and conditions of their employment.     Section 7 of the National Labor Relations Act protects the right of     employees to discuss these matters with each other.

In this case, the employee is presumably asking because they believe some     wages – quite possibly their own – are not fair. They may also have     information about how much their co-workers are making. I recommend that     you be prepared to have a candid discussion with them about why they are     paid what they are paid and the company’s compensation strategy or     philosophy in general. Although you aren’t required to have such a     discussion, chances are something is brewing and a conversation may help     deescalate the situation and make them feel heard.

Few     things are more frustrating for employers than finding out that a new hire     oversold their knowledge, skills, and abilities. The employee looked great     on paper and appeared confident and competent in the interview, but when it     came to doing the basic duties of the job, they just didn’t have what it     took.

To lessen the likelihood of this unfortunate situation, some employers want     to see the candidate in action before formally hiring them. They’ll invite     the candidate to spend a day or so at the workplace, shadowing a seasoned     employee or doing some of the tasks of the job. This is known as a working     interview. It’s legal to conduct working interviews, but there are serious     drawbacks and risks to understand and consider. Consequently, we generally     don’t recommend doing them. However, if you do conduct them, here are some     issues to be aware of:

Compensation
First, working interviews must be compensated at a rate of at least the     minimum wage. You’re basically hiring the candidate as an employee for that     span of time. At the bare minimum, you would need to have the person     complete a Form W-4 and Form I-9 to do the work. You cannot classify them     as an independent contractor as they don’t meet the legal criteria for that     classification. Legally, they are temporary employees – even though the     time is fixed at one day or a couple of hours. Should you decide to go this     route, we recommend that you have a check prepared for them to take with     them at the end of the day. This way you don’t run afoul of any state laws pertaining     to the delivery of final paychecks.

Risks
There are several risks to consider if you decide to do a working     interview. One is that the candidate could be injured during that time and     you would be liable for a workers’ compensation claim. If the employee     wasn’t reported and paid correctly, your workers’ compensation carrier may     not cover the claim. Additionally, candidates completing working interviews     could file for unemployment if you do not hire them for additional work     after the working interview. Unemployment tax is tied to the prospect’s     wages during the preceding year, not to the employer. That said, the     shorter the period the person is employed by you, the less they will draw     from your unemployment account.

Luckily, there are several alternatives to the working interview.

Alternative 1: Use a Temp Agency
If it is essential that you observe the candidate in your office under     regular working conditions, you can contact a temporary agency and inquire     if they would hire the candidate for a single day. The person would then be     the employee of the temporary agency and no employee-employer relationship     would be created between your company and the candidate. If you anticipate     a lot of working interviews, this might be a good option to explore. You     will, however, pay a premium for this service.

Alternative 2: Skills Testing
Another option is making a skills test part of the interview. The     difference between working interviews and skills testing is the environment     in which they are done. During a working interview, you ask the candidate     to work alongside an employee or complete tasks that are a benefit for your     organization. For instance, if you were to ask a candidate for an     accounting position to work on your next payroll for four hours with the     intention of using their work, you would have to pay them for their time.     In contrast, skills testing involves setting up a scenario and asking the     candidate to complete certain tasks on their own that will not result in a     net gain to your organization. For example, you could provide a candidate     with old payroll information, assign them a task with that information, and     then assess their work for accuracy. This would be an acceptable unpaid     skills test.

You can also ask an applicant to complete a skills test exercise at home.     You will generally want to make sure that the amount of time it will take     to complete the exercise will be reasonable – around an hour or so, not a     full day. Typically, only finalists for the position should be asked to     complete such exercises.

Whatever kind of testing you decide to do, there are some general     guidelines you should keep in mind. The Uniform Guidelines on Employee     Selection Procedures (UGESP) – jointly adopted in 1978 by the Equal     Employment Opportunity Commission, the Civil Service Commission, the     Department of Labor, and the Department of Justice – provides a framework     for determining the proper use of tests and other selection procedures. The     guidelines were designed to assist employers, among others, with federal requirements     prohibiting employment practices that discriminate on the grounds of race,     color, religion, sex, and national origin. The EEOC recommends the     following best practices for testing and selection:

• Ensure that employment tests and selection procedures          are job-related and appropriate for your purposes. For example, a          proofreading test might be appropriate for an editing position or an          administrative assistant job, but it would not be a valid test for an          automobile mechanic or an electrician. While a test vendor’s          documentation supporting the validity of a test may be helpful if you          find your company in litigation, you as the employer are ultimately          responsible for ensuring that your tests are non-discriminatory, both          in intention and effect.
• Assess whether your selection procedures          unintentionally screen out a protected group – for example people of a          certain race or sex. If so, determine whether there is an equally          effective alternative selection procedure that has less adverse impact          and, if there is one, adopt the alternative procedure.
• Keep your tests and procedures up-to-date relative          to the specific positions. Job duties change over time, and as they          change, so should your employment tests and selection procedures.          There’s no sense testing for skills if a job no longer requires those          skills. Tests and selection procedures should be predictive of success          in the job.
• Make sure whoever develops the tests, purchases          them from a vendor, administers the tests, and assesses their results          understands the effectiveness, appropriateness, and limitations of the          test. Tests can a useful management tool, but managers who use them need to know what they’re doing.

If you want to avoid the hassle of pre-employment testing, another way to get an idea of an applicant’s     skill level is to ask follow-up questions during the interview process and     request that the applicant provide examples. So, if a candidate says in the     interview that they have a particular skill, you could ask them to tell you     about a time they used that skill or how they might handle various     scenarios that require that skill. You could also pose questions that only     someone with that skill would know how to answer.