VANNOY:
Five must know HR changes that just happened in 2022. There’s so much changing in the world of HR and compliance. We talk all the time on this show about how what used to be a handful of big federal laws have become, state laws, have become local laws, and all these states and local municipalities are adopting their own versions of these federal laws. The, the it it’s getting exponentially more complex, and there’s a few really big ones that have just happened in the last year that a lot of employers just don’t know about and, and, and they’ve gotta get ahead of it if they’re gonna stay compliant. So, a perfect guess for me today, if you guys are regular watch of the show, you know, Mary Mary Simmons, she’s our Vice President of HR Consulting at Asure. She’s a SHRM certified professional. Also, for the past eight years, Mary’s been an adjunct professor at New York’s Institute of Technology. Prior to as Asure Mary was the director of HR consulting for a 55 year old HR consulting firm in New York. Mary, welcome back to the show.
SIMMONS:
Thanks, Mike. We’re glad to be here.
VANNOY:
So we’re gonna, I think we’re gonna spread this conversation probably across a few shows, cuz there, there’s so much to, to unpack here. It, it’s a lot. I think I wanna start out with just the biggies for 2022. I think we’re gonna follow up with, there’s a whole bunch more for 2023 that employers really need to understand. But, but some stuff is already rear rearview mirror. Can you kinda help us understand what, what are the biggies? I I think maybe I wanna start with pay transparency. This is an area where some stop, the states have made it law and the laws aren’t all the same, but some states have made transparency law, but clearly this is a mega trend that that is, that is gonna see it sway into more state legislatures. So help us, I guess, maybe first understand the pay transparency movement and then what are some of the, the, the regulatory updates that have, that are, that are now part of the law.
SIMMONS:
Yeah, so, and I, and I also think that it’s important for employers to understand where these laws are coming from. And it really comes from your pay equity laws, right? So we want to encourage employers to pay employees equally based on their experience, not based on any other parameters such as something that may cause a discrimination claim, right? So you don’t wanna pay women lower than men. And statistics will tell you that women make considerably less than men. So pay transparency is one of those laws that is trying to help employers have pay equity within their organizations. So I see this on the rise. And listen, Mike, I I give this presentation every single year because it’s so important to go over what went on in the year before, because a lot of the regular agencies will push things through at the end of the year or the beginning of the year.
Maybe they think people aren’t paying attention. Maybe that’s the best time to get it through the courts. I don’t know. But pay transparency is definitely on the rise. What it is simply stated, and as you said, it is different in each state and there’s a couple municipalities that do it a little bit differently than their state. And if you remember from prior presentations that we gave, whatever the law is where the employee sits, where they do their work, they get the better of the law. So if the municipality has a better law that favors the employee more than their state law or the federal law, the employee gets that where they sit. That law, right. So yeah. Is really makes it difficult for employers. And that’s why, you know, we send weekly updates on this stuff and I can tell you we’ve had to send biweekly updates at the end of the year cuz there’s so much pay. Transparency really says that employers need to be transparent on the salaries that they are offering for an open position when they post the ad. And let me just, you know, explain that a little bit further. Most of these laws, Mike will tell employers that internally they have to post this as well. Do you see any issues there with me posting? Yeah, exactly. So yeah, this is the
VANNOY:
Thing that’s getting people in so much trouble. And, and, and I love, I I’m glad you started what you did because this is born of pay equality laws. Like, like it’s, it’s been illegal to pay, you know, a a a woman less than a man to do the same job in the same circumstances, right? And so these laws are emerging as a way to kinda force the hand, create the transparencies, shine spotlight on issues to, to make sure that like, if there is a discrepancy in pay, that there are good, valid legal reasons for it. It’s not based on the things that are illegal to discriminate, you know, age, gender looks, whatever. It’s, it’s based solely on job qualification.
SIMMONS:
Absolutely. And so look, we’re, we’re right now in you know, a difficult situation recruiting people. I will tell you that you will get, when, when we do recruitment strategy with our clients, and I’m helping you write an ad, I will tell you, you get at least 50% more responses when you post the salary. Okay? But I think, you know, when you post the salary, if I post a hundred thousand to 200,000 for a position, the person applying automatically thinks they’re gonna get 200,000. So if you offer one 50, cuz they don’t have the top range of the experience, you may not get that person to accept the position. Yeah. So you really, employers, when I’m writing ads with them now, we’re really digging in. We’re really taking a step back and maybe doing some salary surveys, some benchmarking, some salary grading for the position.
So we know and entry level marketing position gets paid. This, you know, the next level has this many years experience and they get paid. This employers really should have had this in their, in the past, but they have to have it going forward. Colorado, I would say is in effect now in 2000 was in effect in 2022. And in my eyes, I really see it as, as the most restrictive, maybe that’s not the the best word, but it has the most parameters around their pay transparency because it also includes promotional opportunities. So let’s just say and I had this exact example in an employer, the employer had a promotion opportunity. Of course, they looked internally first. They chose one individual over another individual. The other individual who did not get the position heard about it and said, well, you didn’t even allow me, I didn’t know it was open.
You didn’t, you didn’t advertise that promotion. And oh, by the way, because it’s a promotional opportunity, you also have to tell us what the pay transparency is. And I say this to my employers all the time. I say, let me take care of the compliance, you take care of running your business because your employees know more than you do half of the time, right? Yep. And so, you know, even though these are very new laws you really need to get on board with them. Number one, it’s, it’s, it’s the right thing to do. And I think in the end it does help your organization. But I think the other reason is because you don’t want somebody triggering a lawsuit, right? Right. Saving you time and money is, is what we what compliance, HR compliance 1 0 1, right? It’s, it’s really the most important thing.
VANNOY:
I think that’s gonna be a big thing. I I was at dinner a few weeks ago with the c e o of a, of a small medium sized software company, tech company. He’s outta California. And he’s having a terrible time complying with this good, good guy. He was not intentionally having pay disparities for people based on, you know, nefarious reasons. But there as he’s posting jobs, he’s having to rethink how he is creating job bands and salary bands and comp bands and publishing all this to create the transparency because as he is bringing people on in a, you know, he, he, he might have somebody who’s paying X and maybe there’s a policy, well we, when we promote someone, we don’t give them more than a 10 or 15% raise, which maybe has seemed reasonable to that person for a very long time, but all of a sudden you’re bringing someone new in and you gotta pay ’em up here and, and you create all these, you know, bad feelings, Andre and, and inequity issues. Yeah. So we’re in an
SIMMONS:
Inflationary period. So yeah, it’s, it would, it would stand to reason that your salaries would go up. But what employers need to think about when you have to adhere to these pay transparency laws is you gotta fix your house before you go forward. Right? Right. And we always say that, right? You gottAsure up your house, you know when these laws come out, look back before you look forward. But you definitely have to look forward. So in 2022, Colorado, New York City, Jersey City, Ithaca, New York, that was, that was kind of a surprising one. In, in Westchester County. So Ithaca, New York and Westchester, both in New York state, but as of December 21st, all of New York State got signed into law. So it will be all of New York, all of Colorado. And then, you know, California and Washington start, started January 1st of this year. And again, each state is just a little bit different.
So when we’re working with our employers, and of course we have employers in every one of these states and multitude of different industries, we’re working with them to figure out what’s the range that you’re gonna give. And there’s not a ton of parameters on the ranges. But I will tell you, you know, some of these nuances, boy, they’ll get you. Cuz in Washington state, you also have to put the benefits and, you know if I’m writing an ad with an employer, I’m of course telling them, you gotta use your, your benefits in the ad because you, that’s the way you attract new employees, right? Benefits are probably neck and neck with salaries these days because we know how expensive medical is and, and other part of benefits you’re, you know, that I would add not inclusive of this law, but is your time off.
But you, this is a difficult law to adhere to. And, you know, we’re, we are really finding, you know, employers are having a hard time with this. But there is a way forward, right? So we certainly are helping employers with this, you know, fun fact, the states that have this pay transparency, Mike law, right now, as of 2023, all the states that I named represent about 22% of the current workforce. Yeah. Yeah. So that’s a lot. And you know, here’s the challenging thing for, for companies that are posting remote positions, what do you do? Let’s say the position can work anywhere, and that includes, I, I might be sitting in Chicago, Illinois, my company, but I’m hiring a remote position and the person can work in New York, Colorado, Washington or, or California. What do you do on that ad? You should put the pay transparency.
VANNOY:
Yeah, I was gonna say, what do you, do? You, do you <laugh>, unless you explicitly That was a great question. Yeah. Unless you explicitly list that these are the eligible states to work in, you, you have to put, you have to list it. Is that accurate?
SIMMONS:
Yeah, yeah, yeah. And you can’t do that. You can’t, you would have to have an employment reason, right? So anything, any time we say, you know, we won’t hire this or we will hire this group of individuals, it has to be directly related to the position. So how are you going to justify that? Because I didn’t wanna give pay transparency. I’m pretty sure that’s not gonna pass muster with these states. Now you’re discriminating against these states, <laugh> you, you I do not advise that <laugh>. Yeah. Yeah. So it’s tricky. It’s, it’s really, really tricky. And I would say that in, in 2023, we expect Connecticut, Maryland, Nevada, Rhode Island and New Jersey. Jersey City, of course is in Jersey. To also add this, and, you know, it’s, you know, gonna look a little bit different for each of these states, but I think that every employer should look to this. Again, my advice, I always put, or or very often I will put a salary range. And the reason for that is because you get at least a 50% more respon better response rate on your ad. Can it cause internal issues if you have not watched your house and kept your internal team up with what you’re offering people from the outside? Yeah, it can, yeah. So, but that can be fixed too.
VANNOY:
Let t tell me if this is a fair recap, and I’ll try to be as brief as I can. We’re, we’re not advocating for or against this is we’re just communicating the law, right? And this is, we’re giving the, our, our best counsel. As a result, we, we acknowledge and we talk all the time about how the, there’s a sea change where the laws are increasingly being protecting the rights in, in of employees and making it harder for employers. So we acknowledge that this is a burden for employers is, is so frequent the case to, to better comply with law and to avoid the risk of lawsuit in, in, in, in you know, legislative bodies coming in, in, in fines for, for not being compliant. Almost always the best case is great HR practices further upstream. So if you don’t have salary bands, if you don’t have job descriptions, and you have, Joe is great at this, Sue’s great at this, and I pay these people, and, and maybe it’s come from the bottom of my heart and maybe it’s worked for me and I’m not trying to screw over anybody, but now all of a sudden I don’t have any of these best HR best practices in place.
Now all of a sudden I have to comply with this pay transparency law. I might hate it. And because it makes it so hard, cuz I’m blowing up my internal, well, the best way to make that a non-issue is to have these great HR practices in place in the first place. If everybody had job descriptions, if every job had a salary band, if these things were public knowledge, and when you went through your performance reviews, you say, okay, Mary the, the, the low and high end of this job pays X and y and you’re sitting right here. Therefore, if you’re having these types of HR conversations all along, complying with this law doesn’t crush you. Right? And, and so, right. I would say an acknowledgement, this is gonna be really hard for a lot of the, especially smaller employers. Yeah. But what it’s probably gonna do is gonna force everyone’s hand to implement the right HR best practices further upstream, which does nothing but create a, a happier, more productive workplace in the first place.
SIMMONS:
Right? And I, I think it makes it, I think it’s gonna make it easier to hire. And the fact of the matter is, your employees probably already know what each other makes, right? It’s, yeah. It’s against the law. It’s concerted protected activity for employees to be able to discuss salary. So you can’t prohibit them from talking about salary. So they are <laugh>. Right? Right. And that’s okay. That’s, that’s the way of the world. And so they probably already know what each other makes you. You might as well make it equitable. And, and it is difficult. But we’ve helped many employers through it who in the beginning are ripping their hair out and going, Mary, I can’t do this. And we’re, by the end of it, they’re like, okay, this makes sense. This I can do. Right? And, and yeah, you just gotta get, you know, your house in order, like I said, it can be done. Well,
VANNOY:
And I like
SIMMONS:
What you said, there’s a way forward
VANNOY:
You’re a hundred percent right, your employees are talking about this anyway, but do you want the conversation to happen in the shadows or do you want to happen in the, in, in, in the light of day where you can help participate in the conversation? Right? Correct. If I, if somebody says, Hey, that person’s making X and I’m only making y that’s not fair, but it’s happening at, at the water cooler, there’s, there’s gonna be bad feelings. But if it’s part of your performance management process and say, okay, here’s the low point for the job, midpoint for the job, here’s you, here’s where you’re at, here’s where you’re at relative to your peers in the range, and here’s your job performance, and this is why I am paying you this. It’s like, oh, it, it might be a rough conversation, but there’s all the myster mystery is taken out of it. And when people don’t correct know the full story, they tend to fill in the blanks with their own version. It’s usually worse than the version that you want would’ve told, which is the, the real reasons why. Right? Anything else? You wanna put a bow on this topic about pay transparency?
SIMMONS:
I, I would just say that, you know, I would, now whether you’re in these states or not, look at the salaries that you’re offering. Do a pay equity audit which we do for employers all the time, lots of things that you should be looking at classifications, meeting the salary minimum meeting minimum wage, which I think all employers know about. And then that the pay equity, and see if you have disparities now and fix those, right? So many of our employers are getting e r TC money. That money is there to invest back into your organization through better HR function, through helping your employees through pay equity and, and compensation to your employees. So, yeah. So if you haven’t gotten your E R T C money, you know, call us. But if you have, that’s what that money should be used for.
VANNOY:
So one of the things there’s a lot of detail around the specific states. We’re, we’re gonna include show notes. So if you’re watching this on our website you, we’ll, we’ll provide a, a, a a blog post with these details. If you’re watching this on YouTube go down to the comment section. We’ll have a link with show notes that has, has the details. There’s a, there’s a lot to know state by state. So we’ll list the specific states that have passed that legislation so that you don’t have to do the homework. But I think punchline here a handful of states that represent a quarter of the US workforce already have laws on the books. And things are just going to accelerate in this category thing. You know, we’re the, the country’s not moving back away from this regardless of who’s in the White House. This, this is, this is the movement that’s happening. All right, let’s move to our next one. Mary. So there’s been a bunch of changes in leave laws, so different leave types yeah. What, what is it that employers need to understand about the these leave law updates?
SIMMONS:
So the first thing, you have to understand what the new leave is in your particular state, right? And you also need to understand where it applies to your remote employees. So I was just on the phone with an employer yesterday, and they were like, yeah, yeah, yeah, I, I have employees in almost every state, but, but they only work, you know, three to six months. So I don’t think any of those leave laws apply to my employees. I’m like, Hmm, yeah, they do <laugh>, you know, so, you know, these leave laws that’s the first thing, right? Is to understand the, the particular leave. The other thing is, many of these states will have more than one leave law. So they will have a paid family leave, they will have a sick leave. And then if that employer is over 50 employees, well then you’ve got you know, the federal leave law, which is F M L A.
So how do those leaves interact with each other? Where are they concurrent and where are, can they be stacked by the employee? And I will tell you, Mike, every state is just a little bit different. So it is very hard for an employer to say, oh, well, I’m in all these states. You know, I’m just gonna give everybody, you know, all this time off and, and I’ll, and I’ll satisfy those, those laws. These have to be specifically written in the handbook. I’ll give you a quick example. Yeah, please. So, New York has a sick leave law, as many states do. And, and we’ll go over that. Many states have, have sick leave laws where they mandate based on how many employees you have, how much sick leave an employee gets. I had an employer in New York give me their handbook, ah, I’m, I’m sure my handbook is perfect.
And I’m like, oh, do do you have the sick leave in there? And I named a couple other, you know, leaves that policies I knew New York had to have. And they, oh, yeah, yeah, yeah, I have it. But when I look at the sick leave, it says, you know, you can take sick leave if you’re sick. That’s not the law. Right? So the law will have different stipulations. The, the, it says it’s sick or safe leave <laugh>, actually. And what does safe mean? That means human traffic. If you’re a victim of human trafficking, and, and if you really look at the law, Mike, I will tell employers you give those sick days because in, you shouldn’t be asking why they’re taking it, because there’s certain privacy around some of the reasons that they would be taking it, like domestic violence, right? Right. So, you know, when it comes to these laws, they have to be written very specifically by an expert in your handbook.
There is not one of these laws does that, does not mandate a posting requirement, a physical policy, which means your handbook, right? Or you could give it to them physically, but makes more sense to have one document, have them sign it, make sure you have documentation that they saw this leave. Yeah. So that’s what I wanna start with, not to give anybody, you know anything to worry about. Right. because the, you know, this again, is something that we do for a living and happy to help. There’s 11 states plus DC that now have paid family leave. Now, in 2023, Oregon, Colorado, and Maryland will go into effect. I believe there will probably be at least 11 more states that will be added next year. They’re, they’re in the works, right? So this,
VANNOY:
And, and, and everybody should hear the, the words correctly. These are so there’s, there’s, there’s always been, there’s, there’s this change going with leave laws. And so if we think back to the nineties, early nineties family Medical Leave Act, F M L A, that basically protects, you can go for all the justifiable reasons, and you, and you don’t lose your job, but it’s not paid. F m L is not paid. Leave. These new laws are correct paid leave. So you as an employer, correct, you’re gonna, if, if you fall into the criteria of these laws, and they’re all different, you have to pay these people. So regardless if you have a sick, sick leave, a pt o policy paid time off any of that, you, you’re, you’re getting one if you live in one of these states, and you, and you have to have to know it,
SIMMONS:
Right? Yes. The pivotal word there is paid. Yeah. family and medical leave. And again, there’s different nuances. So that I think is one of the biggest changes. You know, I will mention that, you know, the federal government also has had in and out of the courts a federal paid leave. And it, it hasn’t passed. And it’s, it’s not close right now, but I kind of smell that that might be something that, that comes down the road. And listen, these are, these are good, you know, leaves for the employees, right? I think it’s, it’s a, it’s a positive thing. And I would think most employers have some type of vacation, personal day, sick day anyway. So you’re just weaving this into what you have. But again, the verbiage that you have in your policy is critical, because I have had employers who had this leave, you know, new York’s had it for three years audited on this.
So you have to be very specific in the way, you know, you have to follow what the state requirements are. Yeah. so that’s paid leave, family and medical leave. So in addition to the paid family and medical leave, there are also 15 states. And in addition to those states, there’s many municipalities that have paid sick leave. So already your head should be spinning a little bit because when do they take paid family and medical leave? And when do they take paid sick leave? And again, when are they concurrent and when can the employee stack them? And this is the other thing that we really customize in a handbook. I’m Asureming that most employers where they’re allowed to not make these leaves stackable. Right. Meaning you take one and then you take the other, and oh, by the way, then you can take vacation <laugh>, that you, we put some verbiage in there to protect you from the employee being out the entire year.
Yes. so this, you know, is why those handbooks take a long time and why we stress a customized handbook versus, you know, nothing upsets me more. You know, I was talking to another employer the other day and I said, oh, so, so tell me about your handbook. And it was a really nice family run business. Really, really smart, you know, entrepreneurs, they, you know, just really successful and great. But, you know, they realized they needed help on the HR side, and they were like, well, my grandmother helped me, smart lady with the handbook. And I said, oh, how did you get the information? I Googled it. Yeah. Nothing makes me wish more Mike, as you know. Yeah. As when I hear that, because I just, it’s, no, don’t do that. Please, <laugh>. Yeah. First of all, you can’t Google what you don’t know to Google. Right? You don’t know what you don’t know. I mean,
VANNOY:
I’m not gonna be antigo. It’s a, it’s, it’s great. I mean, research gets smarter, but you hit, you hit the nail. I mean, I, I had a belly ache a year ago, and it, and it, it took me, and Google realized I was dying of cancer in about 15 minutes, right? I mean, I’m not a doctor cause I dunno the questions to ask, right? So Google’s great, but don’t, you don’t know the questions to ask. You don’t know the sources to go to. You don’t know the tricks that these websites play to rank above each other. You, you have to know the authoritative sources to be able to put this stuff together.
SIMMONS:
Right? And, you know, it’s, it, you know, so there’s two issues with that. One is just cutting and pasting a paid sick leave and plopping it into your handbook. The other is looking at it and going, oh, well, I’m just gonna change one or two words. Those one or two words could make that, you know, you know, illegal, right? And a, a, a litigation trigger for an employee. So you have to be really, really careful. Now, Maine and Nevada, you know, again, surprising states, right? We always think New York and California have pretty restrictive laws. But Maine and Nevada allow time off for any reason, not just sick leave. And again, many of those states and municipalities that I mentioned prior that have the paid sick leave, like New York like Connecticut, have paid sick, safe leave. But when you dig into those laws, it is for almost any reason, and let me say almost with air quotes, right?
That needs a, a, a bigger explanation that I’d have to customize for an employer. And then there’s a couple more le leave laws, right? So, San Francisco now has a leave for larger employers for employees during a public health emergency. And maybe that’s for their, for their earthquakes. I’m, I’m not sure where that came from. Colorado also has a similar leave. New York has something similar as well for individuals who are emergency responders. And that probably comes out of nine 11, I’m gonna guess. Oregon allows use of paid sick leave for the care of a child due to illness or school closure. So I hope you get the trend here, Mike. Yeah. There’s a lot of leaves. They are very specific to not only the state, but to a municipality parity. California has something new for two at the end of 2022, which is a bereavement leave of five days, which I really applaud.
Most of my employers, when I write a handbook, that’s a standard policy that I, I have bereavement leave as a standard policy, but California’s the first state to mandate it. And I have had a few small employers say, well, I give sick, or I give personal, or I give vacation days if people need it for bereavement. But I, I applaud the, the mandate of bereavement leave. I think that that, that is, is really nice to give. But again there’s parameters around that as well. So lots of leave laws
VANNOY:
And I, I, what my encouragement to employers here is, yeah. Increasingly be because the labor market’s so tight just to be able to attract employees employers are offering more generous leave packages anyway, that’s just happening, right? Yeah. you know, more, more paid time off a trend towards instead of sick time versus this time versus that time, it’s just pto use it as you see fit and then bigger buckets. So while that’s a trend, you might think, okay, well I have this generous policy already no, no issues. I don’t have to sweat the handbook details. But there are, there are overlapping and sequential use of leave types that absolutely could impact you. So you might think, oh, I offer four weeks right after, after 20 days of pto, use it however you want. But then they just took a, a week fi five days of bereavement.
They took x number of days of this, and I just am Asureming that that’s coming off of my pto, but you might actually be on the hook to pay all of it, and your employee could be out for a quarter of a year paid. Right. And, and I’m not trying to be inhumane to employees and their needs No, no. But if you’re a small business owner trying to survive on a 2% margin business, that one then could put you under, right? Yeah. So you have to do this, right? You have to have the handbooks that research the laws know what can be overlapped, what is sequential, and how does that interplay with your current policies. And based on the law, you might have to change your current policies, right? Right.
SIMMONS:
Absolutely. And, and let’s look at it from the positive side. A lot of times I’ll talk to small employers that are family run, and they’re like, Mary, I don’t need hr. I’m good. We’re a family business. We’re all family here. And, and, you know, other employers will say to me, my employees are all happy. I I don’t really have employee relations issues. And, and what I’ll say to them is, but you might not know about some of these leave laws that your employees are eligible for. And some of these are partially paid through insurance that the employee pays into. And some of these leave laws are partially paid through, you know, other insurances, right? So it’s not all out of the employer’s pocket, and shouldn’t your employees that you respect and you want engaged and you want to stay with, you know about the leaves that, that they can take, right? And they wouldn’t know that because as an employer, you don’t have the time to look into this stuff. That’s why we’re, we’re here to help. You know? And that’s why Yeah. You know, it’s, you can’t Google what you don’t know <laugh>. And I love Google too. And, and I’m not cutting on Google <laugh>,
VANNOY:
And you and I have talked many times. I mean, e employee relation, what’s the, what’s the phrase? Peter Drucker culture beats strategy anytime, right? Yep. Yep. A great culture. You, if you’re, no, we, we never want anybody to be outta compliance. But if you’re out, if you’re not compliant and you have a great relationship with your employees, it’s far less likely they’re gonna sue you. They’re gonna come after you because you’re probably just gonna be able to work it through. That’s all, that’s all true. Right? But the, the family culture that you may have had, may, may have been established based on decades, though. The world has changed a bunch in less than a decade. This lasts 2, 3, 4. I mean, there was a pandemic and the number of HR laws that changed simply as a result of the pandemic, the way the labor shortage is no longer some, you know, theoretical big company thing.
But the, the war for talent hitting Main Street, small businesses can’t get enough people to even fill the jobs. Yeah. The games changed. It just, it simply has, and you might not feel it yet, but all it takes is that one employee who you think you’ve got the great relationship in, there was no issue with, with your, with your PTO policy until all of a sudden this law just passed three months ago that you don’t know about, but your employee’s spouse does, and they told your employee, and now all of a sudden they start getting this itching feeling that they’re getting screwed a little bit, and you don’t know what’s happening. You gotta get ahead of it, right? Because,
SIMMONS:
Yeah, I mean, these things, you know, we had a recent employer join us, you know, great employer, so nice, Mike, that they had somebody who went out on leave. And by the time we entered, they’re like, I’m like, oh, what, what issues are you dealing with? And they’re like, well, we let this person go out on a leave and we can’t seem to get her back. And I go, oh, what do you mean? What kind of leave? Why is she out? What has been documented? Well, nothing. She’s been out, you know, two or three months. You know, we’re really, you know, really positive culture. We really love our employees. I’m like, well, wait a minute. She could have been, you didn’t have to pay, give her full pay number one. No, because she could have been covered by x leave within your state. Number two, you know, you gotta put parameters around this because I think that’s very nice that you let her out.
But then when we started entering into it, Mike, this person was sitting on a beach someplace, right? So, you know, no good deed goes unpunished sometimes. And the other thing is, you might be doing that nice thing for that one employee, but then you have to do it for Mike and Scott and Mary, and Joe and John, right? You have to be consistent. Can you run a business and give everybody three months off full pay? I don’t think so. That’s, so that’s correct’s where these leaves help you that, okay, you have an a situation, employee, let me look at the leaves that would apply to you. This is the leave you’re on. It’s for X amount of weeks. You need to check in these dates, give doctor’s notes on, or, you know, some kind of, you know notation from a doctor or a professional, you know, for, for these particular leaves. You have to put parameters around these things so that you can operate your business. And so the employee knows to plan their time out.
VANNOY:
Okay. Next, next topic. There’s, and I, and I, I think largely there’s increasing clarifications, sometimes legislative, depending where you’re at updates around F L S A fair Labor Standards Act specifically around definitions of independent contractors is I, I think this is a, this is a confusing area for, for, for folks where I think a bunch of good intention people thinking, oh, because the job is X, Y, and Z, I’m just gonna pay this one as a 10 99 versus this one as a w2, you don’t get to make those choices. There are really clear rules in play. Yeah. Right? No,
SIMMONS:
My, my, my favorite is the employer says to me, but Mary, they wanna be an independent contractor, <laugh>. And I’m like, well, you have somebody else. True story. You have somebody else doing the same exact job that you have as an employee. How are you going to explain that to the Department of Labor? No, that, that’s probably not gonna pass muster. So this gets very, it, the definition of an independent contractor, look, if I’m going to state it in super simple terms an independent contractor has the control. So they have the majority of the control over what they do when they do it, and how they do the work. Okay? That’s simply stated, the difference between an independent contractor and an employee, right? Yep. So remember from prior, you know, sessions that an employee under F L S A has to be exempt or not exempt.
We have no other choices there, right? Yeah. The other worker that you could have in your business would be an independent contractor, okay? So the laws around who’s an in independent contractor are governed by the Department of Labor, and the I R S will get into it also. So you can find a fact sheet from the I R s and a definition from the F L S A, the Fair Labor Standards Act on what an independent contractor is. And it, and it is, you know, difficult for a lot of employers. And I think what will help everybody understand this is, you know, the, the businesses that have really come to light in 2021 w really, and, you know, into last year is, you know, the gig workers, right? The uber drivers of the world that were independent contractors, right? But for our employers, I want you to understand a couple of things, right? So just like your employees do not decide whether they’re exempt or non-exempt, it’s based on their responsibilities. The independent contractor designation is decided by, again, who has the control? Do you as the employer, or does the independent contractor have the control,
VANNOY:
Right? Right.
SIMMONS:
So
VANNOY:
If you hire, if you hire somebody to remodel your kitchen, they bring the tools, they bring the expertise, you might work within an agreed upon timeframe, but you don’t, you’re not teaching them how to, how to install cabinets, right? You’re not, you’re not teaching them how to, in, in specifying the exact technique that they use to lay floor and floor tile. They, they control the means of production. They have the tools, they have, they, they do it the way they, they want according to their expertise. That’s a, that’s a contractor. You hire an employee, you say, no, you’re gonna use my hammer, you’re gonna use my nails, and you’re, you’re gonna do it in this way. That’s a co that’s that, that, that’s a carpenter that works for you as a W2 employee. <Laugh>, right? I mean,
SIMMONS:
Right. And you say, and you work nine to five. Yes. Yes. So, and if I think a, a really good example of an independent contractor is that a tech person who comes in and you say, I need a new you know, lms, a learning management system set up, you know, in the organization, you know, we think it’s a three to six month project, do it. They use their own computer, they do it on their time, they do it remotely home. You don’t give them a thing, you don’t give them a pen. <Laugh>. Yeah. Right? and then, and for many states, you have a contract. My suggestion is you have a contract with every single independent contractor, okay. Mandated in many states. But the movement that, you know, I just wanna make everybody aware of, is towards resulting in fewer workers, especially those gig workers being classified as independent contractors and being classified as employees instead for purposes of minimum wage and overtime.
So that is what we see coming forward. And what, you know, is, is now really being looked at. There’s, there’s six core factors that they look at and they’re similar to the old factors, but they’re looking at totality of circumstances, analysis of economic reality. Again, that probably doesn’t mean anything to you or to anybody listening, but it really bears examination of looking at your independent contractors. You, you, the true definition of an independent contractor should probably not be working for you for 10 years. Right. Unless they really fit into those parameters. An independent contractor is usually a shorter term. It can be long term, but, but you really need to be careful cuz they are scrutinizing this area.
VANNOY:
So Mary, there, so, so we’ve, and we’ve talked a little bit on this topic in different, from different vantage points o over the past several months. But what is the specific legal changes that people need to be aware of? And I think some, there, there’s some where we’re awaiting some decisions from D o l still on, on some interpretations. Yes.
SIMMONS:
Yeah. So they were supposed to have a final rule in 2023. Now of course that 2023 is here. They’re like, oh, well maybe we won’t have them in two till 2024 <laugh>, which is almost a full year from now. So it, it has been back and forth so much in the past, I’d say two years now, a full two years. It’s been back and forth. And it, it really, I think comes from, you know, the rise of this gig economy, the, the Uber drivers, the you know, the, the fast food delivery businesses and you know them, you know, raising the, the question, are we independent contractors or are we employees? And so we hope that something comes out yeah. In 2023. But it, it is unclear. The Department of Labor has not given the final rule yet, and now they’re leaving it open to push it into 2024,
VANNOY:
I think. So there, there are pending legislative changes. I shouldn’t say legislative. There are enforcement, pending enforcement changes here. I would just encourage everybody all, all employer to just, you don’t have a choice. The, the, the, the, in many ways, the law has been clear for a very long time on this. I think there’s, dare I say, some sloppiness, and I’m not trying to be finger wagging at employers because I lord knows how hard it’s to start and, and run a business, right? But you don’t get to say whether a job is hourly versus exempt from overtime. There are rules that determine that. You don’t get to say, oh, this person wants to be paid on a 10 99. This person wants to be a w2. I’m gonna to be more flexible for me. I’m going to pay this one as a 10 99.
There are rules that govern this. And as we, as we kind of migrate more and more from a traditional employment W2 employment economy into more and more, I wouldn’t even say a gig economy. It’s not like it’s going from one to the other, but it’s a hybrid, right? It’s the person who is a W2 during the day and they’re a, a gig economy person by night. Whether, whether they’re an Instacart shopper, an Uber driver, or just an independent contractor in it, right? Trying to start a new career for themselves. So, absolutely these worlds are, are, are coming together and, and you’ve gotta know the law. Anything else you want to add on F L S A updates for independent contractors?
SIMMONS:
I just think it needs an examination by a professional if you have independent contractors. And I would make sure that you have some type of a contract with them tho Those are my, my suggestions.
VANNOY:
Yeah. Agree. Okay. we got two more topics I still wanna plow through here. Yep. Number the, the, the, the first one here is fair chance laws. I, I think, let, let’s start out. What the heck is a fair chance law? Where does it currently apply? What’s the trend here?
SIMMONS:
Yeah, so again, when we fair chance law are so that we give a fair chance to somebody with a record, somebody who has a felony conviction, somebody who has been in prison, et cetera. And New York City was one of the first places that started it. And I’m just gonna tell you a quick story because I want employers to understand this and, and, and I give this story when I do interviewing training, because we should be interviewing individuals who are are hiring people who are you know, good at the job, have the skills for the job. So I had an employer who had a stellar head of sales guy, was great, you know, literally number two with the company, made the company really successful. Unfortunately, driving down the road one day, probably speeding cuz it was 25 mile an hour zone not, you know, intoxicated, not on his phone, but a child ran between two cars and tragedy occurred and the child was killed.
And this individual went to jail for manslaughter. And when he came out, he had a hard time finding another job because that shows up if you do a background check. And that is what, and for many individuals, right? We cannot discriminate against an individual solely because they have a criminal history. Now, there are federal employers that cannot hire somebody with a federal with a felony conviction. So you know, that is, is separate from what we’re talking about here. But the Fair Chance laws are set up so that we give individuals who have paid their debt to society, if we will, a fair chance at hiring. Texas is new in 2022, and there are roughly 37 states and 150 cities who have adopted fair chance hiring laws. So what I will say to employers is that you need to look at the conviction, right?
So if the conviction is for larceny and you’re hiring them for your C F O position, then you most certainly can use that as a reason not to hire them. It is job related. But if we take the example that I gave and it it’s manslaughter for the accident that, that this individual happened then you really wouldn’t be able to use that conviction against somebody who was head of sales, let’s say, you know, for the positions that, that he was looking for. Now, I had an employer call me once and say, well, mayor, I’m looking to hire somebody and they have a conviction for manslaughter, for beating a guy to death in a bar fight. And he’s in, you know, very active you know, warehouse with lots of individuals. There’s a lot of action. There’s, you know, we’ve had fist fights before, the guys get mad at each other, right? And so that would need further discussion. So, you know, I’m making it sound black and white. It is not. This is something that I
VANNOY:
Was gonna really, I was gonna ask you something. I feel like this is maybe a, a conversation for our, with our friend Brian Schenker over at Jackson Lewis. Yes. and this is one of the maddening things for, for me as an entrepreneur, and I think for other entrepreneurs in so many ways, HR compliance is black and white, you know? Yeah. 10 99 exempt, non-exempt. There, there are black and white rules that govern this stuff. Here’s a black and white. That’s right. Law, fair chance laws, they’re, they’re d maybe nuanced by state, but it’s written down as a law, but there’s still gray area, there’s still AR area. Yeah. Right. Of course. Like, like if somebody get in your example, when you say a felon, we all, you and I did a webinar recently on on unconscious bias. Everybody got a picture in their head of what a felon looks like, right?
And it may might be some shady character in a trench coat in the dark alley. Right. They didn’t picture the, the person that looks just like them in the mirror who was charged for manslaughter for, for, for the, that accident, right? So, right. But so that’s an, that’s like, ooh, yeah, that shouldn’t count. Fair chance law is great for that person, but what about the person in the bar fight? Is it fair to impugn their character based on that? And so that disqualifies them from any job. The these, these things get gray and it’s just still, I’m always gonna come back. The more you can tie things back to a job description and your policies in an employee handbook, and those job descriptions are tied to competencies that are written down, what are the competencies required to perform the job that sets you up for success in all these other nuanced decisions Right around, yeah. Pay ranges based on competencies in job descriptions based on, okay, they did commit this crime. Is there an ob more obvious correlation because I have the job description written down, or because I have this written in my handbook, oh, you still have nuance, you still have gray area, but all these HR best practices help to make things more black and white and, and make, make your decisions more defensible. I, I don’t think I’m overstating that, do you?
SIMMONS:
No, and I, I think, you know, what comes up most often is D W I, I think it’s d w i is the felony and d u I is not. So I think that comes up more. There’s also clean slate laws which allows certain criminal histories to be expunged after a certain amount of time. So Arizona passed that. And it’s expanding to 19 more states. So, you know, I think what I would say to employers about this, just to wrap this with a bow to use, to use your, your wording, Mike, is that I think, like you said, just reiterate to your managers that they should be looking at experience and if there is criminal history, is it related to the job that they’ll, they’ll be doing?
VANNOY:
Yeah. And I will, something I’ll, I I say over and over, the war for talent is hit Main Street. I, I, I, I drive down my, my local neighborhood and there’s help wanted signs everywhere because businesses can’t get enough people to even run their business at full capacity. This is not going away. This is not simply the result of a pandemic or who’s in who has con control of Congress or White House. These are mega trends that have been underway based on birth rates and workforce engagement rates for decades, right? This is, this is not going away anytime. If you want to hire talented people and retain them, you have to expand your horizons for where you look for talent. And so if you have some personal biases that you think, well, I, I don’t like that law because, you know, we’re a high moral virtue company and I, you know, I care about if they have a criminal record. Well, maybe giving some of the second chance is great. And maybe the law that prevents you from seeing that in the first place is great because it just expanded your talent pool. Right. All right. I’ll get off my soapbox on that one. Let’s, let’s talk about the last topic, I think for today. Salary history bands. I don’t think a lot of people know what this is, but this is, this is an up and coming thing as well.
SIMMONS:
It definitely is. And it’s tied back to pay equity as well. And basically just says that you are not allowed to ask the candidate you are interviewing for a job what their pay history was. And the theory here is that if I make 80 cents to the dollar that you make, Mike which is what statistics will say that I make 20% less than than you. If we have the same exact background and the same exact job that if, if, and let me just use those numbers. Let’s say I was making 80,000 and you were making a hundred thousand. When you go to get the next job and I go to get the next job, you’ll get 120 and I’ll get a hundred and I’ll never catch up to you. Right? Right. So what, listen, when this first came out, it came out first in New York and California, but it’s now in 26 states.
You know, my employers were calling me and going, what, Mary, no way. I can’t on an interview, I can’t ask what they were making. And I said, honestly, why does it matter what they were making? You know, what you’re gonna pay and let’s go back to pay transparency. Yeah. Where you should know what you would pay for this position with this experience that you’re looking for. Right? And, and this background, you should know what you’re paying. So if they were underpaid in their prior job, why does that matter? Are you really gonna pay if, if the job pays a hundred thousand but the person you’re interviewing who is stellar and perfect for the job was only making 70 at their last job, are you really gonna only pay give them 80? I don’t think so. Cuz now, you know, no matter who it is, it does create pay inequity, right? So, you know, you really want to try to make sure that you’re on top of this, you know, giving, making sure your managers are not asking what the last, last salary was. And since it’s in 26 states my advice when I’m doing interview training is do not ask that question. The manager shouldn’t be asking that question anyway. Right. Because usually HR is making the offer. Yeah. but I I would
Employees it becomes, yeah, you know, two, what are you gonna look up all 26 states every time you interview somebody if you’re interviewing across Right. You know, different states. So I’d be, I’d be careful about that. Yeah. This is important.
VANNOY:
I mean, we, we, we get the, we get the impulse that how it might feel reasonable, right? So for, you know, for the right three or five or whatever decades you’ve been in business and you know, you wanna treat people fairly, you want to give ’em a career path. And so you give ’em, you know, three to 5% raises and the high performers get up to 10% raises. And so you, you, you, you kind of got this model that’s been working for you for a long time. But to to your example, there are groups of people that can never catch up if everybody’s playing in that same, same race. I’ve got a c e o friend he’s, he’s got a great business on his hands tech tech business. But I think he’s a brilliant employer employment strategist. Now this doesn’t work for all jobs.
Some people geography matters if you’re in retail and serving local customers. But as he hires engineers, this is how much he pays. And it’s less than you would make market rate in San Francisco. But you are in the 1% richest people in the world in in Mumbai, right? And so he, he, all he cares about is the best talent across the world. So he hires engineers. It doesn’t matter where you are. So could he pay less to get good engineers in different parts of the world? Well, of course he could, but he doesn’t see a worldwide workforce as offshoring and labor arbitrage. He sees that as he’s opening himself up to the biggest talent pool possible. And this is how much, this is how much I’m willing to pay to hire an engineer, cuz this is how it fits into my, my economic model.
And if I can help some woman become the richest person in her town because she’s an engineer that works for me, well, I’m just doing the world good and she’s never gonna leave me and she’s gonna be some so dedicated to me and I’m getting a huge win because I’m getting one of the best engineers literally in the world, right? Can I compete right in Silicon Valley? Hell no. Can I compete in New York, Dallas, Chicago? Probably not. But I’m still getting the best talent to make me the most successful company in the world. I think that’s probably the way we should thinking about what is the job worth? Open yourself up to the biggest talent pool possible. And, and, and you win and the employee wins.
SIMMONS:
Right? Right.
VANNOY:
Right. Mary, I think, I think we’re gonna call it a stopping point. So we’re gonna pick this up. So we talked about the, the five major trends here in some very specific legislation that passed in 2022. So pay transparency, leave laws, F L S A updates around independent contractors, fair chance laws and salary history bans. I think we, you, you’ve identified 12 topics for 2023 that I think we’re gonna take over a, a a two-part series to unpack, cuz there, there’s a whole lot to go through that employers have to know. And this is a lot of stuff, but yet the ignorance of the law is no excuse. You gotta comply with the law. The, the world is changing whether you like it or not. So we’re gonna, we’re gonna unpack all that information and I think our next two shows we’re gonna split that off at those 12 topics into six each, something like that. But I think today was a great recap of the major legislative changes that happened in 2022. Anything you wanna add to quote, unquote put a bow on it?
SIMMONS:
Yeah, I think, I think the, the things you have to think about as employers is what do I do with this information, right? So, as I said, many of these regulations are going to have a posting requirement. You’re gonna have to update your handbook, you’re gonna have to educate your managers and inform your staff if you haven’t already enacted these, these laws. So that’s what we’re working on with employers. And like I said, some of these things you might have to take a step back and do a couple of things like salary benchmarking and salary grades and, and things like that to prepare for these. So, so take this information and, and act upon it. This should be your 2023 goals.
VANNOY:
Yeah, very cool. I would love talking to you, Mary. I learned so much and I’m sure everybody else watching today did as, as well. So until next week when we begin our next two part series on 2023 legislative com HR compliance updates have a great week. We’ll talk to you all then.
Speaker 1:
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