Tag Archives: Paid Time Off

How to Hire and Retain During the “Big Quit”

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Almost daily, my employer clients are telling me about their inability to hire workers to fill job openings in the Texas Panhandle. This local trend reflects a nationwide problem. The Bureau of Labor Statistics just reported last week that 4.3 million people left their jobs in August 2021, the highest “quits rate” since the BLS started tracking the numbers in 2001.  

Industries that were most affected by this high quits rate in August included hotels, bars, restaurants, retail, manufacturing, construction, healthcare and education. The media has dubbed this as the “Great Resignation” or the snappier “Big Quit”.

We knew this was coming even before the BLS released that report on October 12. Surveys by Microsoft and by the Society for Human Resource Management earlier this year both found that 40% of employees say they have or will quit their jobs in 2021. That’s double the number in 2019, just before the pandemic.

There are lots of reasons why employees are participating in the “Big Quit” and employers are having such a challenging time filling open positions. But the reasons are not solely, or even chiefly, related to government handouts. Ending the federal supplement to unemployment in Texas and other states at the end of June 2021 didn’t create any improvement in employers’ ability to hire. In fact, the recent BLS numbers showed that employees walking away from their jobs markedly increased after the unemployment benefits expired.

Reasons for the Big Quit

The reasons for the Great Resignation seem to be related to what employees discovered about themselves and their jobs during the pandemic:

  • More than four million Americans dropped out of the labor force entirely during the pandemic, particularly women and workers over 55 years old. They had reasons ranging from childcare duties, to early retirement, to concerns about contracting COVID. Sixty-eight percent of workers who told SHRM that they were going to quit their jobs in 2021 said that they decided to make a change during the COVID-19 pandemic. Extended time at home has convinced many workers that they are dissatisfied with their current career and would rather transition to being a stay-at-home parent, pursue a new educational opportunity, look for a better job or retire.
  • A huge wave of Baby Boomers retired, many because of unpaid furloughs during the pandemic. But a year later, even more are retiring, reporting that they have reached the point of exhaustion and will be happier if they leave the workplace altogether, even if it means a less healthy retirement income. The estimate is that 10,000 Boomers retire each day in the US, and because the following generations are smaller, finding and retaining replacements for the Boomers is proving difficult and a long-term problem, projected to continue for the next 10-15 years.
  • Restaurant staff, grocery store employees, delivery drivers, heathcare workers, teachers, retail workers and others reached their breaking points. “Throughout the pandemic, essential workers – often in lower paid positions – have borne the brunt of employers’ decisions. Many were working longer hours on smaller staffs, in positions that required interaction with the public with little to no safety measures put in place by the company and, at least in the US, no guarantee of paid sick leave. It quickly burnt workers out,” concluded a BBC report.
  • Low wages are a hugely motivating factor in the Great Resignation. The federal (and Texas) minimum wage hasn’t increased above $7.25 since 2009, even though the consumer prices have. An item that cost $7.25 in 2009 now costs $9.27 in 2021. Employees who make these minimum wage know that they sink further into poverty every year, and they are running away from low paying jobs as fast as possible.
  • The SHRM survey found that 53% of the people leaving their jobs in 2021 did it for better compensation. Employees who are stressed and in low satisfaction jobs with irregular schedules like food service don’t have to perform that work anymore for the low wages that employers were paying before the Big Quit. “Workers’ wages are rising at the fastest pace in years, due largely to structural shifts in labor markets, talent supply challenges and potential inflation.  Research shows 72% of companies are updating pay and benefits programs in 2021 to address multiple challenges”, according to Forbes.  

This kind of massive reorganization of the labor market happens after world wars and economic recessions. The COVID pandemic has apparently created the same type of seismic shift where it is a seller’s market for employees to demand and receive better employment perks in exchange for agreeing to perform the work.

So what should a Texas Panhandle employer do to improve recruiting of employees for all those open positions in 2021?

Continue reading How to Hire and Retain During the “Big Quit” →

COVID-19 Paid Leave Laws Affect Small Employers

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Congress has passed and President Trump has signed a new law that requires small employers to provide paid leave to employees for two weeks of sick leave and as many as 10 weeks of leave to take care of kids whose schools have closed.

This Families First Coronavirus Response Act (“FFCRA”) goes into effect on April 1, 2020. It requires all employers with less than 500 employees, including very small employers and nonprofits, to pay employees whose absences are caused by the COVID-19 epidemic. The DOL has created a fact sheet and an FAQ to help employers understand these laws better.

Here are a few highlights of the FFCRA law:

Paid sick leave for two weeks is available to all full-time, part-time, temporary, seasonal, and other kind of employee if the employee has to miss work for one of the following reasons:

  1. Employee is subject to government quarantine; or
  2. Employee has been advised by healthcare provider to self-quarantine; or
  3. Employee is experiencing symptoms and seeking a diagnosis; or
  4. Employee is caring for an individual subject to quarantine or self-quarantine as advised by healthcare provider; or
  5. Employee is caring for children under 18 because schools or “caregivers” are unavailable; or
  6. Employee is experiencing any other condition that is substantially similar to COVID-19, as specified in HHS regulations to come.

Paid Family and Medical Leave is available for up to 10 more weeks (after using up 2 weeks of unpaid time or 2 weeks of Emergency Paid Sick Leave as spelled out above) to all full-time, part-time, temporary, seasonal or other kind of employee if the employee has worked for the employer for at least 30 days and then has to miss work for this one reason:

  • The employee is unavailable to work or telework because the employee is caring for a child under the age of 18 because that child’s school or childcare facility is closed because of the coronavirus.

The paid sick leave has to be paid at the employees’ regular hourly rate (including commissions, tips and piece rates, but not overtime rates) if the employee is absent for reasons #1-3, above. The paid sick leave and the paid family and medical leave have to be paid at 2/3 of the employee’s regular hourly rate if the employee is absent for reasons #4-6, above. There are also daily and total caps on the amounts you have to pay the employees for these absences.

Employers with less than 50 employees are subject to these FFCRA paid leave laws, even though you have never before been required to comply with Family and Medical Leave Act or any paid leave law. There is a provision that the Secretary of Labor can exempt a business when giving the leave would “jeopardize the vitality of the business.” In other words, if granting this paid leave could make your company go out of business, and you can prove that in your financials, you might not have to provide this paid leave. You don’t have to get the Secretary of Labor’s permission for this exemption by filing anything, but you will have to be able to document the correctness of your decision after the fact.

This law is not retroactive, meaning you don’t have to pay for leave taken before April 1, 2020, if it wasn’t your company policy to pay employee absences.

However, you also can’t make employees apply your paid time off policy before using this emergency paid sick leave or family leave. It is the employee’s choice alone on how to coordinate their PTO and these paid leave laws.

The good news for employers is that the employer gets a tax credit on payroll taxes for 100% of these amounts paid to employees for emergency sick leave and paid Family and Medical Leave. On the next Form 941 that will be due by July 31, 2020, the IRS will add a line for the employer to take the tax credit. If the amount you paid out to your employees for these paid leave laws exceeds the payroll taxes that you owe, then you are supposed to be able to get a refund from the IRS within 2 weeks after filing your Form 941.

We are still waiting for the Secretary of Labor to provide more guidance through regulations. He should also be providing us with notices, posters and other explanations to give to your employees.

There are also other employment laws that a company has to consider in this crisis, which are summarized here.

Paid Sick Leave Required in Some Texas Cities

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Do you as an employer provide your employees in Texas at least six to eight days of paid sick leave every year? If you have employees who work in Dallas or San Antonio, you are about to be required to do so. You should be immediately adding a paid sick leave policy that complies with municipal ordinances that take effect August 1, 2019 in those two cities.

If you have an employee who works at least 80 hours per year in the city limits of Dallas or San Antonio, the new ordinances require you as the employer (if you employ five or more people anywhere) to provide that employee with one hour of paid sick leave for every 30 hours that the employee works within those city limits. It doesn’t matter if your business isn’t based in one of those cities, just whether your employee performs work there.

Of course, offering this paid sick leave only to your employees who work in San Antonio and Dallas could create workforce animosity and claims of discrimination among your other employees, so employers making changes to their policies need to carefully consider whether a company-wide sick leave policy revision is the smartest move at this point.

Here are the general details of the two municipal paid sick leave ordinances in Dallas and San Antonio. You should ask your employment lawyer to help you include the specifics in your revised written sick leave policy if you have Dallas and San Antonio workers:

  • If you have 15 or more employees, then you must allow your Dallas and San Antonio employees to accrue at least 64 hours of sick leave per year. For smaller employers (5-14 employees employed anywhere), the total amount of paid sick leave required per year is 48 hours.
  • The paid sick leave laws apply to full and part-time employees, so those of you who don’t provide benefits to part-time employees in Dallas and San Antonio will need to revise your policies.
  • These ordinances say that employees can use their paid sick leave as soon as it is accrued. So if you require an initial probationary or orientation period in which paid time off can’t be used, you’ll have to rethink your policy in that regard.
  • This paid sick leave can be used for more than employee’s own mental or physical health problems. The employee can take the paid time off for a family member’s illnesses, any family member’s victimization (such as domestic violence or sexual assault), and for doctor’s appointments for the employee or a family member. “Family member” is defined broadly and includes blood relatives as well as anyone who has such a close association with the employee to be considered family (such as a live-in partner).
  • You have to allow carry over of accrued but unused paid sick leave to the next year if you use the accrual method. However, if you provide all of the paid sick leave the employee will be entitled to at the beginning of the year, then you don’t have to allow carry over (this is also much easier to administer than the accrual method).
  • You can’t retaliate against an employee for using the sick leave he/she is entitled to.
  • Enforcement won’t go into full effect on these ordinances until April 2020, but you should be amending your policies now to comply with the August 1, 2019 effective date.

These ordinances have not been without controversy. The business lobby in Texas is fighting hard against these paid sick leave laws. A similar one in Austin is currently enjoined by a court battle, headed to the Texas Supreme Court, and won’t be taking effect as scheduled. But the court battle will take significant time and the 2019 Texas Legislative session ended last month with the lawmakers failing to pass any bill to standardize these municipal ordinances statewide or prohibit cities from passing them, so there is little chance that Dallas and San Antonio’s laws won’t go into effect in August, even if they are challenged in court later.

Even if you don’t have Dallas and San Antonio employees, I think all Texas employers must consider offering paid sick leave right now. Not only are states and cities all over the country requiring this, but employees are coming to expect this benefit.

Plus such a change can benefit an employer in a time of historically low unemployment in this state. It seems that almost every employer that I represent tells me that he/she can’t hire and keep good help. So shouldn’t you be offering some kind of paid sick leave to improve your hiring and retention? Maybe it would be helpful to adopt a policy that would comply with these city ordinances as part of a more comprehensive review and beefing up of your benefits to attract and retain high-quality employees.

Even Walmart (long regarded as one of America’s worst employers) recognized in 2019 the value of providing its hourly employees with 48 hours of paid sick leave per year in addition to regular paid time off. In fact, Walmart’s new company-wide paid sick leave policy looks surprisingly similar to the ordinances just passed by Dallas and San Antonio. Walmart wasn’t being altruistic, of course. It just made the move to standardize its policies to comply with a nationwide patchwork of new state and municipal laws requiring employers provide paid sick leave.

2017 New Year’s Resolutions for Employers

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At the beginning of each year, I encourage my business clients to make some New Year’s resolutions to achieve better compliance with the myriad employment laws. Based on what many of my clients are telling me and what the courts and enforcement agencies have on their agendas, here are the employment matters that you could improve in 2017:

  • Immigration compliance: President-Elect Trump has promised strong enforcement of the immigration laws. Many of those enforcement efforts will affect employers, such as mandatory use of the E-Verify system to double-check the legal status of every new hire. Even before that requirement is put in to place, resolve to correctly complete the mandatory new I-9 form for every new hire. The best way to make sure the I-9 is correctly completed: consult the government-published Employer’s Guide to the I-9, particularly the color pictures that show you exactly what a valid permanent resident card, for example, looks like. Also, be prepared that some of your employees may lose their work eligibility under the new administration, including young people (known as the Dreamers) who became eligible under the Deferred Action for Childhood Arrivals (DACA) program in 2012.
  • Market rate on salaries: Texas’ unemployment rate was sitting at 4.6% at the end of November 2016. Amarillo’s rate was 3.0%. Economists consider 3% to be full employment, meaning you as an employer maybe finding it difficult to attract and keep the talent that you need. I am always surprised therefore when my clients don’t keep up with the market data on salaries. Resolve in 2016 to tap into the data available on the Bureau of Labor Statistics for your industry and your location to really analyze whether your salaries are sufficient. Employees will also be looking at Salary.com and Payscale.com, so you need to do the same.
  • Improve your PTO offering: I am amazed when I am drafting or revising my client’s employment handbooks how little paid time off many local employers offer. Many don’t give an employee any vacation, sick leave, personal days or other paid time off during the first year and then rarely allow more than five days per year after that. This will not attract top talent or create long-term loyal employees, I promise you. Particularly if you are hiring millennials or need an educated workforce, you need to up your game on PTO. My 22-year-old son was hired in 2015 by a consulting firm in Washington, D.C., right out of college (with a degree in economics and a master’s degree in business analytics) and offered three weeks of PTO that started accruing immediately. After one promotion, employees at his company get four weeks of PTO. I’m not arguing that every job merits that much PTO, but resolve in 2017 to at least consider that two weeks per year should be the minimum to improve your hiring, increase your retention, rejuvenate your employees every year and allow your employees to deal with the inevitable ups and downs of life. As an employment lawyer, I know that most employee lawsuits arise after the worker leaves your employ. Keeping your staff reasonably happy and loyal by providing better PTO will provide you with other benefits too, but I like it because you will spend less time with me in court and instead we can just have lunch and talk about more pleasant topics.
  • Health Reimbursement Accounts: None of us know what the new administration will create to replace the Affordable Care Act, so I can’t give you much advice yet about your group health insurance offerings. However, employers with less than 50 employees who don’t offer group health insurance should resolve to consider using Health Reimbursement Accounts in 2017 because of the bipartisan 21st Century Cures Act that sailed through Congress and the President’s signature in December. That act included permission for small employers to now use HRA’s to pay for qualified out-of-pocket medical expenses for their employees and to fund individual health insurance premiums. In other words, employers can use pretax dollars to help employees to purchase their own insurance on the open market while capping the employer’s contribution at a reasonable amount. There are, of course, many restrictions associated with this opportunity, but it is worth consideration by smaller employers in 2017.
  • Good Documentation: Every employment lawyer would like for you to add this to your resolution list each year. Memories fail and managers move on, so written documents are often an employer’s only evidence of the nondiscriminatory reasons that certain employment actions were taken. Understand and resolve that performance reviews, reasons for bonuses and merit increases, violations of policy, attendance problems, changes in job duties and disciplinary actions will be well-documented in 2017. I’ll help with any of kind of documentation, but I highly recommend that you get me involved whenever the documentation is of disability or religious accommodations, FMLA, harassment claims, overtime or other compensation problems, egregious policy violations, demotions, final warnings, layoffs and terminations.
  • Gratitude: Resolve that you will say “thank you” more often to your employees in 2017. Studies have repeatedly shown that this one action can enhance employee engagement and loyalty even more than raises and promotions. Gratitude can also make your workplace so much more enjoyable for all of your employees.

 

Texas Employers Need Snow Day Policy

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Texas employers should have a policy to give employees advance warning of what to expect on a snow day, particularly in the Texas Panhandle, where we often have a couple of inclement weather days per year.

The easiest way to determine whether to keep your facility open or not is to follow your local school district’s decisions and let your staff find out through the media. That relieves you of having to communicate the decision to every employee. It is also helpful to your employees to be able to stay home with school-aged children who have no other place to go that day.

Texas and federal law do not specifically dictate when an employer must be open or closed during inclement weather, but they do dictate how compensation must be determined during those times.

Hourly employees do not have to be paid when they perform no work. Exempt employees, however, have to be paid their normal salaries when your facility is closed for weather reasons. On days when the company is open, but a salaried employee chooses not to travel because of road conditions near their house and therefore performs no work all day long, the exempt employee can be docked for that day or be required to use available paid time off.

The other pitfall with inclement weather days occurs when employees work at home on a snow day. If you give your employees the ability to remotely access their computers, if you allow them to take work home, or if you expect them to check emails and return phone calls on a snow day, you will need to pay them for those work hours (non-exempt employees) or that whole day (exempt employees).

I suggest that every employer adopt some kind of inclement weather policy similar to this one: Continue reading Texas Employers Need Snow Day Policy →