Hagel and Company Human Resources Blog - California, Idaho, Washington State HR News

Small to midsized businesses are often caught in the conundrum of “to-do or not-to-do” when it comes to including testing as part of the employment process. Cognitive, physical, personality, aptitude, and language proficiency testing are often used by employers in hiring, promotion or other employment decisions. But these tests can be expensive and must be qualified to avoid discrimination.

Employment testing has been on the rise since 9/11, as security concerns as well as concerns about workplace violence, employee safety and corporate liability have increased. Another motivating factor for testing is the move to an on-line job application process. Employers are using testing to screen large numbers of applicants while reducing questions about subjectivity in decision making. Employers are continually trying to do more with less, resulting in the development of hiring and promotion practices designed to find the best and the brightest.

Legislation such as Title VII of the Civil Rights Act of 1964, The American with Disabilities Act (ADA) of 1990 (and the recent amended ADAA), and the Age Discrimination Act of 1967 prohibit the use of discriminatory employment tests and selection procedures. At issue is disparate treatment and disparate impact. Disparate treatment is intentionally discriminating against someone based on race, color, religion, gender, or national origin. The effect of excluding people based on these criteria is referred to as disparate impact. The Equal Employment Opportunity Commission (EEOC) cites the following examples to help clarify understanding of these issues:

• If an employer requires that all applicants pass a physical agility test, does the test disproportionately screen out women? Employers are required to perform, record, and maintain statistical analyses on test results to determine if a test or selection process has a disparate impact on a protected group.
• If there is a disparate impact, can the employer show that the selection procedure is job-related and consistent with business necessity? For example a clothing manufacturer could prove that it is necessary to have a female model for women’s bathing suit advertisements.

Employers’ best practices for testing and selection include:

1. Administer tests and procedures without regard to race, color, national origin, gender, religion, age or disability.
2. Ensure that tests are properly validated for the positions or purpose being used by the employer. The test must be job-related and specific to the employer’s use.
3. Perform statistical analysis on test results regularly and if there is a disparate impact, determine if there is an equally effective alternative solution and implement it.
4. Educate management on testing tools, their use, and expected compliance with EEOC guidelines. Avoid qualification of the testing or results by persons unfamiliar with the procedures and importance of qualified results.

Keep cognizant of changes in these rules and procedures. In a recent Chicago case, Lewis v. City of Chicago (U.S. 5-10, the employer was found to be in violation of Title VII from testing information in employees files dated 1995. The issue revolved around timely filing of a suit. Testing was performed in 1995, the scores were used in 1996 to make employment decisions, and the “qualified” folks who weren’t hired sued in 1997. The rules require that a charge be made to the EEOC within 300 days of the LATEST discriminatory act. The City of Chicago claimed that they acted in 1995 when they assigned classifications to those tested. The plaintiffs claimed the act occurred in 1996 when the employment decisions were actually made. The court agreed with the plaintiffs. Translated, this means that test scores sitting in an applicant or employee file can form the basis for a ‘new’ discrimination complaint when used as a basis for an employment decision including hiring or promoting.

If testing is being used, regularly review your tools, to determine if they may put you at risk for a separate impact claim, before you use the results in making employment decisions.

For more information, visit these sources:

www.eeoc.gov

http://www.siop.org/workplace/employment%20testing/employment_testing_toc.aspx

During the summer it reminds us that, for most employees, the highlight of the year comes when they are able to take their vacation. However, recent studies show that more Americans are working throughout the year without taking a break. This is attributed to being overwhelmed with job responsibilities and not wanting to have to catch up after being away. But health experts say that it is important for people to take time off for physical, mental and psychological reasons.

Providing an easy, automated workflow system that allows employees to easily schedule time off may help take away some of the anxiety of leaving work responsibilities. Sage Abra’s Employee Self Service software (Abra ESS) makes it easy for employees, managers and administrators to manage time-off requests. Employees can access their personal data anytime via the internet or an intranet to create, edit or delete time-off requests while also managing time-off balances, attendance plans and absence transactions. Managers and supervisors can then approve the requests without viewing other sensitive employee information.

Abra ESS protects sensitive employee data using password protection, SQL server database security, and an encrypted Sage Abra HRMS database. Abra ESS supports 128-bit SSL encryption to protect data transmitted over the Internet. Users may also tailor the Abra ESS system through customization tools while creating a central portal for employees to access important company information.

The automated process and online accessibility also eliminates the frustration of waiting on people, memos or other types of paper trail. So, employees should take their time off as it helps their overall well being and thus their contribution to the company. Employees who are able to use their allotted vacation time will also be more satisfied because they are able to receive their full benefits. And, satisfied employees create a happier and more productive environment in the workplace which is something everyone wants.

Contact us today for more information about Employee Self Service Software

Beginning in 2011, over the counter drugs and other medical-related items such as bandages will no longer be qualified expenses under flexible spending accounts (FSA) or health savings accounts (HSA), unless you have a prescription from a physician. Additionally, a $2,500 cap on employee contributions to an FSA begins in 2013. What does this mean to your company benefits plan?

EMPLOYERS:

Until 2013, companies are under no restrictions on the limit of contributions to FSAs. Now may be a good time to look at amending FSA plans to come in line with the proposed changes. Sara Taylor, a strategy consultant with Hewitt Associates predicts, “we may see additional movement toward health savings accounts (HSAs)” in the wake of the limit on FSA contributions¹.

By offering HSAs for medical savings, combined with FSAs limited to vision and or dental services, employees can still take advantage of the tax savings benefit despite health care reform. This type of option would allow employees to contribute over $5500 in pretax dollars for allowable health-related expenses, although still subject to the use-it or lose-it rule.

If employers opt for higher deductible healthcare plans, employees may see the tax relief from using an FSA or HSA as a way to ease the discomfort when paying those higher deductibles.

EMPLOYEES:

Seventy-five percent of all FSA accounts have been used to pay for prescription drugs and medical treatments, so the new rule about prescriptions should only affect a fraction of medical savings purchases. But, if employees do make mistakes and purchase the wrong items with FSA funds, they will have to pay the income tax on that money. For employees with HSAs, the penalty for nonqualified distributions increases from 10% to 20% in 2011. That’s on top of paying the income tax on such distributions.

According to Hewitt Associates’ April 2010 analysis, only 20% of US employees contributed to an FSA in 2010 either because they weren’t offered by their employer or because of the “use it” or “lose it” rule requiring them to forfeit unspent contributions. However, the same report noted that those who did participate typically saved between $250 and $640 in annual federal taxes. As a result, predictions are that the changes in FSAs won’t significantly impact most employees. However, the new rules will impact workers’ ability to pay for vision, dental and chronic care conditions if costs exceed the $2,500 cap. Amending plans to help ease the tax burden may be just the nudge needed to get employees participating in these plans.

As with all changes, communication will be a key factor in reducing confusion and helping employees prepare for the full impact of the legislation. Offering similar plans together can be confusing for workers so an effective education program will help them navigate through their options. If they qualify, employees whose tax bill will be higher as a result of the new healthcare legislation, are likely to find that cycling money through these limited FSAs and HSAs could be a wise investment