Month: June 2007

Best Practices

by National Peo National Peo No Comments

As a Human Resources Consultant, I frequently field questions about employee tenure, retention, and of course, temination for no particular reason other than the employee is “…not a good fit.”  I remind my clients that it all beings with interviewing and selection and effective onboarding.  As most Human Resources Professionals can attest, there is no exact science to candiate selection, but there are proactive measures that must be taken.  A multi-step interview process, beginning with a phone interview, followed up with multi-level interviews, and the use effective behavioral based interview questions, used to determine culture and behavioral fit.  Utilizing thorough and consistent hiring practices will result in improved employee retention.

Onboarding, or otherwise referred to as new hire orientation, may very well dictate the tenure of the employee.  Human Resources Professionals will agree that what a new hire experiences in the first minute, hour, day and week of a new job will build loyalty or have him or her running for the door.  Onboarding programs should include staff introductions and subsequent organization chart (pictures help), review of company history, mission and vision.  Employees should know how their individual contributions assist the  the organization in achieving goals.  Simply showing someone where the restrooms are located will not yeild the same result!

House Republican Immigration Bill Emphasizes Verification, Enforcement

by National Peo National Peo 1 Comment
 In an alternative to comprehensive immigration reform being debated in the Senate, several House Republicans introduced a bill on Tuesday, June 19, that would concentrate solely on border security and work-site enforcement.

GOP leaders of the House immigration and homeland security committees propose to require that all 7 million U.S. employers sign up for the current government-run employee verification system, Basic Pilot.About 16,000 companies are currently using the Web-based mechanism to check applicant documents against government Social Security databases. Within two years of enactment of the House GOP legislation, employers would have to use Basic Pilot to verify new hires. All workers would have to be verified within six years.

The sponsors of the bill argue that Congress should enforce immigration laws that are already on the books before moving on to broader measures. Their bill denies legalization for the approximately 12 million undocumented people currently in the United States.

“Let’s get back to the basics,” said Rep. Steve King, R-Iowa and a member of the House Judiciary Committee. “Let’s stop the bleeding at the border. Let’s shut off the jobs magnet.”

The Republicans asserted that the key to stopping illegal immigration is to break its link to employment.

The measure would allow the Department of Homeland Security to investigate when an employer submits a Social Security number more than once or when the same number is submitted by multiple employers.

Rep. Lamar Smith, R-Texas and ranking member of the House Judiciary Committee, said that he and his colleagues are calling for the Bush administration to “enforce employer sanctions systematically, not just sporadically. It would be immigration reform just to enforce current laws.”

“It’s something we need to get to sooner or later in this country,” King said.

But what the GOP wants to do now is hold employers accountable for who they hire. Stopping illegal immigration has to go beyond the border, said Rep. Brian Bilbray, R-California.

“You have to do it in workplace enforcement,” he said. “You have to do it in the neighborhoods.”

National PEO can help you comply now.

Federal Minimum Wage to Increase

by National Peo National Peo 1 Comment

For those of you who have not heard, on May 25, 2007, President Bush signed the Fair Minimum Wage Act of 2007, which raises the federal minimum wage to $7.25 per hour over the next two years.

To unravel the difference between the federal wage and state wage, states may assess that a higher wage is necessary for citizens to meet their needs and therefore adopt a higher wage.  When a state adopts a higher wage than federal, then employers must pay the higher wage.  Many states do not establish their own minimum wage  and therefore follow the federal wage.

The new federal minimum wage will be phased in accordingly:

  • Current federal minimum wage $5.15
  • First increase 7/24/07 $5.85
  • Second increase 7/24/08 $6.55
  • Final increase 7/24/08 $7.25

There is no change to the federal regualtion for tipped employees, which remains at $2.13/hour. 

So how will this affect us prior to July 24, 2009?  Out of state clients who have different state minimums will require analysis and possible adjustments.

Out of state clients who fall under the current federal minimum wage of $5.15 will be raised to $5.85, $6.55 and ultimately $7.25.

This also runs concurrent with Arizona and other states who have established an annual increase (in January) in accordance with the cost of living increase.

Double Digit Health Care Cost Increases Forecast

by National Peo National Peo 1 Comment

The cost of providing health care is expected to increase as much as 11.2 percent in the next 12 months, according to a recent survey of more than 70 health insurers representing more than 100 million insured individuals.

A breakout by plan category found:

• Health maintenance organizations (HMOs)—rates are projected to rise by 10.9 percent. That’s down from 12.2 percent in spring 2006.

• Point-of-service (POS) plans—rates are projected to rise by 10.8 percent, down from 11.9 percent.

• Planned provider organizations—rates are projected to rise by 11.2 percent, down from 12.4 percent.

Although it is encouraging to see a continuing decline in health care trend rates, employers are still challenged by the fact that health care cost increases are more than four times general inflation rates.

For many businesses, health care costs continue to be their fastest growing expense.

Increasing patient demand for services, an aging population, increasing medical technology and hospital costs, increasing price and utilization of prescription drugs, poor lifestyle choices, cost shifting, and medical malpractice costs are blamed for the double-digit rate increases.

Employers have a number of strategies to reduce the rate of these increases.

Some of the more successful strategies consist of implementing consumer-driven health care plans, chronic condition management programs and health promotion programs.

Coupled with plan design changes and/or employee contribution changes, these strategies can reduce an employer’s health care cost increase by more than half.

Among other findings:

• Rates for group medical plans rose as much as 15 percent since fall 2006 for some small and medium-sized employers.

• Rates for employers with 501 or more workers rose as much as 6 percent to 10 percent

Instead of limiting options or discounting coverage, though, most employers are continuing traditional coverage plans, with employees shouldering the cost of higher deductibles and co-pays, the council found.

The majority of clients are beginning to increase the deductibles to reduce the overall increases.

Early Dialogue May Get Retirees to Stick Around

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Employers and HR consultants for years have pondered ways to retain aging workers as the retirement wave nears. But as companies start to tackle the issue, many are realizing that the solution is not just about coming up with new ways of working; it’s about creating a culture where employees close to retirement age feel comfortable discussing their plans with their managers.

By the time companies initiate conversations with older workers about what they can do to get those employees to stay, it’s often too late. These employees already have a date in mind and have discussed their plans with friends and family.

At National PEO we realize the need to establish a dialogue about retirement with these employees.

To address the issue, interviews were conducted with a dozen top corporate executives to see what their retirement plans were and what would keep them.

A number of the executives revealed they were burned out and wanted time to rejuvenate, but could work longer.

By talking early to a select number of executives who are approaching retirement about how the company could keep them on longer. We have arranged for key employee to work part time for a few months and thereafter will have a variable schedule which the company and the employee will agree upon.

And employees value the frank discussions!

A recent study conducted by the Tennessee Valley Authority in which workers were asked about their retirement plans, we noticed that “They got a tremendous amount of data and employees really liked the fact that they were being asked.”

It would behoove companies to be proactive in this area because once employees start planning and talking about retirement; it might be harder to get them back.

Workers Comp is the most burdensome regulation

by National Peo National Peo No Comments

Workers’ compensation laws are the most difficult government regulation to deal with, but also the most beneficial to employees, small business owners said in response to a survey by the National Association of Professional Employer Organizations.


NAPEO surveyed 429 small businesses around the country and asked 16 questions about labor laws and other employment issues.


Thirty-eight percent of respondents named workers’ compensation as the most difficult of 13 employment regulations they had to deal with. But 47% also said workers’ compensation is the most beneficial government regulation for workers.


“Without the system, employees and their employers would have to roll the dice in the legal system, a slow, cumbersome and sometimes unfair process,” NAPEO said. “Instead the presumption under the workers’ comp system is that workers injured on the job have an absolute right to medical care and compensation, and if there’s a dispute it’s first heard informally by the state workers’ comp agency.”


After workers’ compensation, the small businesses found federal employment and income taxes (28%), the Family Medical Leave Act (26%) and the Health Insurance Portability and Accountability Act (HIPPA) (26%) the most onerous regulations.


Behind workers’ compensation, the small businesses found the Family Medical Leave Act (42%), HIPPA (32%) and the Fair Labor Standards Act (29%)as most beneficial to their workers.


The small businesses said the least beneficial regulations for workers are the Immigration Reform and Control Act (35%), involuntary wage garnishments (32%) and the Worker Adjustment and Retraining Notification Act (31%).


Businesses adopt alternative hiring methods

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June 03, 2007  From The Pocono Record
For many small businesses, the administrative burdens of hiring, managing and paying employees are just too much to contemplate. As a result, many business owners are turning to alternative methods of hiring staff, including something called the “professional employer organization” or PEO.

PEOs are companies that help businesses find and hire people, plus manage such things as health benefits, workers’ comp claims, payroll, unemployment insurance and more. As a business owner, you contract with a PEO to assume these and other responsibilities, allowing you to concentrate on the revenue-producing side of your operations. PEOs establish and maintain an employer relationship with the workers assigned to you and assume many employer responsibilities and risks.

Most small businesses are new to the “human relations,” or HR, field. But one advantage of using a professional employer organization is that they already have experienced HR pros who can handle benefits, payroll, OSHA compliance and just about everything else you will need. By bringing employees into a larger overall group, a PEO can offer your workers benefits such as health insurance and retirement plans that you’d be hard-pressed to deliver on your own.

Small business owners often dread the prospect of reading mountains of resumes and conducting interviews for prospective hires. PEOs can reduce this burden and deliver candidates quickly, then handle the paperwork for the new hire. Some PEOs have entire divisions devoted to recruiting and helping small business owners gather information to make the right hiring decisions.

Many entrepreneurs who’ve used PEOs credit the choice with helping grow their businesses quickly. The National Association of Professional Employer Organizations is an excellent source of information and help. The organization’s Web site describes how PEOs work, the benefits of using one and guidelines for selecting one that’s right for your business and industry. Visit the Web site at or

Electronic Ties that Bind

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Gone, but not forgotten.Laptops, pagers, cell phones, personal digital assistants and BlackBerry devices have become “e-leashes” that virtually tether some employees to the office even while they are supposedly on vacation.

And while only 9 percent of 6,823 private-sector employees surveyed said their employers expect them to check voicemail or e-mail while on vacation, others might do so anyway.

Information technology workers are most likely to work while on vacation, with 36 percent checking in with the office on their days off, followed by sales workers (32 percent) and banking/finance workers (29 percent).

Fourteen percent of workers feel guilty about being on vacation instead of at work, a feeling most prevalent (20 percent) among those ages 25 to 34 who are trying to move up the corporate ladder.

Other findings from a survey, conducted from Feb. 15 to March 6, 2007:

• 70 percent of workers receive two weeks or more of paid vacation, and nearly 25 percent receive four or more weeks.

• 12 percent do not receive a paid vacation.

• 9 percent lie to their employers, telling them they can’t be reached while on vacation.

• 20 percent won’t take a vacation in 2007, 27 percent will take five days or less, and 9 percent will limit themselves to weekend getaways.

There are a host of reasons why employees feel compelled to forgo a vacation or obsessively check in,

Some may fear if they are gone and things go smoothly, it will send a message that they aren’t needed,

However, the opposite can actually be true. If one prepares in advance and anticipates issues, it can positively reflect on your management and organization skills.”

Workers Opt for Long Weekends Over Big Vacations

by National Peo National Peo 2 Comments

Hectic family schedules, soaring gas prices and the e-leashes of technology will prompt more workers to opt for long weekends that serve as mini-vacations instead of taking long blocks of vacation time as in years past, according to recent surveys and a trend forecast.

Three- and four-day vacations are replacing the once-a-year, two-week vacation for U.S. workers, according to Chicago-based outplacement consultant firm Challenger, Gray& Christmas Inc., which offered up a forecast of vacation habits based on workplace and family trends.

“We are becoming a nation of the long weekend vacation, with workers looking ahead to each Monday/Friday holiday for the opportunity to turn a three-day weekend into a four- or five-day weekend,” firm President and CEO John A. Challenger said in a press release.

Trying to schedule a vacation around the children’s activities can present another barrier to taking long vacations, he noted.

“Between the work schedules of the husband and wife as well as the school, after-school and summer activities of the children, it is difficult to find an extended time that works for all family members,” he said.

Then there’s the expense of longer vacations.

“Even if you cut out the airfare by driving, hotel rooms, food and attractions could easily reach $200-$300 per day,” and driving long distances can be expensive given today’s pump prices, he observed.

Employers will be the biggest beneficiaries of the short vacations, Challenger suggested.

“For the employer, these brief jaunts are the equivalent of a 20-minute power nap—they do not disrupt the rhythm of the workplace, and afterward the worker is refreshed and ready to attack the job at hand. While workers may end up with more frequent vacation absences from the office, productivity does not suffer because they are gone for less time,” he said.

Federal Minimum Wage Increase Becomes Law

by National Peo National Peo No Comments

With the week-long Memorial Day congressional recess looming, President Bush signed into law an increase in the Federal minimum wage on Friday, May 25. This is the first time in a decade that the minimum wage has been raised. The wage increase was added to the most recent Iraq war funding bill.

The new law will raise the minimum wage in three $.70 increments over 26 months until it reaches $7.25 per hour. The first increase (up to $5.85) will occur this summer or to be specific, 60 days after the law takes effect. The second increase (up to $6.55) and third increase (up to $7.25) will take place one and two years respectively, after the date of the first increase.

In addition, the new law contains $4.84 billion of tax relief for small businesses to help offset the cost of the mandated wage increase to employers. These tax law changes include a three-and-a-half year extension of the Work Opportunity Tax Credit (WOTC), which gives employers tax credits for hiring individuals from one or more of nine targeted groups. Also, disabled veterans were added as a targeted group under WOTC.