A Monthly Update on Day-to-Day Management Issues for Optical ECPs and Retailers
September 2008
Made possible by an unrestricted grant from Sàfilo and Santinelli
All in the Family
Over the many years of working in and consulting to numerous companies in the optical industry—many of which are or were family-owned, privately held businesses—one question repeatedly is asked of me by owners: What do you believe are the three or four most important elements of a successful family-owned business? Many ask because they wish to remain in private ownership, with a family succession plan.
So with that as a backdrop, here are the four common attributes that I have found provide "Guiding Principles" for the most successful companies in the optical industry:
Be clear in what makes your company special. The most successful family-owned businesses I have worked with know and have articulated the vision of what they do best and ensure all new strategies they launch are consistent with their enduring vision. They possess the self-awareness of what they are and what they are not. And they do not try to be a look-alike version of a competitor.
Keep the family involved. Recruit one or more members from each generation into management. Over time, this has strengthened the company and its culture. As well, it is often easier to get approval to invest in new opportunities that arise, and makes the family less prone to rifts. And most well-run family businesses have a loyal group of key contributors that they view as family.
Treasure the past while creating the future. Past generations of ownership and leadership add cachet, allowing a higher probability of retaining existing clients while leveraging it for future opportunities and success.
Bring outsiders in when needed. New, outside expertise very often brings the benefit of reducing internal family 'disagreements' while adding a fresh perspective on growing or focusing the company on existing clients and business strategies.
No doubt, some family-owned ECPs have other views or experiences regarding their successes. And if you have other "Guiding Principles" that have endured through generations of family participation, please
drop us a note at Business Essentials. We will share your successes in future editions of the newsletter.
Hedley Lawson brings over 25 years of optical industry experience to Jobson Medical LLC. For over 10 years, he has been a contributing editor to VM, most recently as writer of the monthly column "Business Essentials." He is the Contributing Editor of VM's E-Newsletter Business Essentials. Contact
Business Essentials with questions or comments.
Employment Laws
Q:
Do most of the labor laws apply to certain size firms? What about the major laws, such as FMLA, FLSA, ADA and others? Are there labor laws that apply to all firms?
A: Size generally dictates whether an employer will be subject to federal labor and employment laws but, as with everything, there are exceptions.
The
Uniformed Services Employment and Reemployment Rights Act ("USERRA") applies to all employers regardless of size. Similarly, the
Fair Labor Standards Act ("FLSA") does not have any expressed size requirements. In addition to applying to all hospitals, nursing homes and schools, regardless of size, the FLSA also applies to all private employers, regardless of size, who engage in interstate or foreign commerce and meet or exceed $500,000 in gross yearly sales.
Employers should be mindful that being exempt from federal employment laws due to size will not automatically mean the employer will also be exempt from the applicable state laws.
California's anti-discrimination laws, for example, apply to employers with as few as five employees. New York's state and city human rights laws
("NYSHRL" and
"NYCHRL") apply to employers with as few as four employees, and
New Jersey's Law Against Discrimination ("NJAD") covers employers with as little as one employee.
So, what should all employers—regardless of size—take away from this? If a federal law doesn't apply to your business because of size, the state version of it likely will. Therefore, knowing your state's employment laws is just as important as knowing the "major" federal ones.
Eligibility for
Healthcare Benefits
Q:
May we condition eligibility for healthcare benefits on health status?
A: No.
Employee Retirement Income Security Act (ERISA) prohibits a group healthcare plan from basing an employee's eligibility to begin or continue participation, or the contribution required from an employee to participate in the plan, on health status-related factors. So you can't charge smokers or those with high blood pressure, for example, more for their health insurance.
If you have a question or issue for one of our experts, contact Business Essentials.
—Hedley Lawson, Jr.
Compensation Is Due Even When Earned in Violation of Company Policies
An employer is required to compensate an employee for all the hours worked, even if that includes time worked through a required meal break in violation of company policy, according to a U.S. Department of Labor (DOL) opinion letter released July 29, 2008.
In its break and meal policy, an unspecified employer in New York provided, "All employees working six or more hours in a shift must receive a 30-minute, uninterrupted, and unpaid meal period. The meal period requirements cannot be waived by the employee nor substituted for any other time."
The policy nevertheless also provided that "there may be instances when, because of staffing or workloads, a meal period may not be available to all staff members. If any nonexempt employee does not take a meal period as required by the New York State Department of Labor, that employee should notify his or her manager and note this on the time card so he or she will be compensated for the time."
The employer asked the DOL for its opinion on whether additional straight time (non-overtime) would be due when an employee violates company policy by skipping a meal break and failing to notify the manager that the break was missed. The employer also asked the DOL to assume that the worker had worked less than 40 hours in the work week and that the minimum wage still would be received, even if the employer did not pay additional straight time.
The DOL stated that the employer "must compensate the employee for all hours worked, including the time worked during the missed meal period," though it went on to note that if an employee receives at least the minimum wage for all hours worked, including the time worked due to a missed meal period, no additional compensation is due under the Fair Labor Standards Act (FLSA). But the DOL emphasized that FLSA regulations require accurate recordkeeping of hours worked each workday, as well as total hours worked each work week for covered and nonexempt employees.
The DOL also pointed out that time worked through the missed meal period would be hours worked for purposes of determining any overtime compensation. “Before an employee can be said to be paid statutory overtime compensation due, the employee must first be paid all straight time wages due for all hours worked under any express or implied contract or under an applicable statute,” the DOL stated.
The employer also asked the DOL what happens if an employee instead violates a policy prohibiting all forms of off-the-clock work. Even though the employee is scheduled to work 35 hours per week, the employee begins work early or works after the regular finishing time. Would additional straight time be due then?
The employee must be paid for all hours worked at the agreed rate in addition to any overtime for all hours over 40, the DOL answered.
What if the employer advised the employee in writing not to ever work any unrecorded work hours and the employee who violated this policy was subject to disciplinary action, the employer inquired. Would the DOL's answer be different then?
The DOL said it did not have enough information to answer this question, but referred to FLSA regulations to remind the employer that "it is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough" (29 C.F.R. § 785.13)
(FLSA 2008-7NA) (May 15, 2008).
Despite recent challenges to the economy, employers are managing to maintain a balance in employee benefits, according to the 2008 Employee Benefits Survey released by the
Society for Human Resource Management (SHRM).
"Rising healthcare costs, combined with the state of the economy, are causing more employers to adjust healthcare and financial benefits," said Susan R. Meisinger, SPHR, former president and CEO of SHRM. "But in return, employers are offering other valuable but less costly benefits, such as telecommuting, cross-training for non-job-related skills development and allowing employees to bring their children to the office in emergencies."
Benefits that declined in 2008, such as health screening programs, stock options, paid family adoption and paternity leave and legal assistance, were balanced by benefits that have increased in popularity this year. They include allowing personal use of company-provided cell phones and communication devices; on-site vaccinations; fitness center membership reimbursement or subsidy; and Roth 401(k) savings plans.
According to the survey results, as the modern definition of family changes, organizations are adjusting their benefits with 36 percent offering healthcare coverage for both same-sex partners and for dependent grandchildren. In addition, 30 percent offer healthcare benefits for foster children and 15 percent give paid adoption leave.
The survey also revealed that organizations are recognizing the importance of work/life balance. For instance, 62 percent pay for long-distance calls home during business travel and 37 percent offer a compressed work week. In addition, 24 percent offer such benefits as postal services, legal assistance and food services or a subsidized cafeteria. And, 5 percent offer concierge service.
Organizations are also helping employees improve their health. For example, 72 percent provide wellness resources and information; 40 percent offer smoking cessation programs; 31 percent offer weight-loss programs; and 21 percent feature bariatric procedure coverage.
According to the 2008 survey, benefits costs to employers’ average 39 percent of payroll. Of those costs, 21 percent are attributed to mandatory benefits and 18 percent to employee-selected benefits.
Steps to Comply with New Genetic Non-discrimination Requirements
On May 21, President Bush signed the
Genetic Information Nondiscrimination Act (GINA) a landmark bill that will pave the way for individuals to obtain genetic information about themselves and family members without fear of losing employment or health insurance. GINA goes into effect on Nov. 21, 2009.
Under GINA, all employers are barred from refusing to hire, discharge, or in any way discriminate against applicants and employees because of genetic information. "Genetic information" means an applicant's or employee's genetic tests or genetic tests of their family members, or the manifestation of a disease or disorder in family members. The new law also bans employers from requesting, requiring, or purchasing genetic information about an employee or family member, except for specified reasons, such as to comply with
Family and Medical Leave Act certification rules or if the employer offers a wellness program that includes a genetic testing component and the employee voluntarily participates.
GINA also imposes strict confidentiality requirements on employers regarding genetic information. Namely, if you do have genetic information about an employee or employee's family member, the information must be maintained in separate medical files and treated as a confidential medical record, in the same way medical records must be treated under the
Federal Americans with Disabilities Act.
Employers are not the only ones targeted by the new anti-bias provisions. GINA also provides that it is illegal for health insurers to raise premiums or deny coverage based on genetic information.
Here are three review steps employers can begin taking now to get ready for the implementation of GINA next year:
Review your anti-bias policy to state that it covers bias on the basis of genetic information. (Note that California employers are already barred from subjecting employees and applicants to genetic testing and from discriminating based on genetic characteristics.)
Review your existing medical confidentiality policy and medical leave policies to determine whether updates are needed to comply with GINA's confidentiality mandates.
Determine how to train personnel and who to train, in order to ensure strict compliance with GINA.
Federal Minimum Wage Enters Second Stage of Increase
The federal minimum wage became $6.55 per hour on July 24, 2008. The 70-cent raise from 5.85 per hour was the second stage of a two-year, three-phase increase of the wage, which began in July 2007.
To comply with the
U.S. Department of Labor (DOL) regulations governing the wage increase, all employers that hire workers subject to minimum wage provisions of the Fair Labor Standards Act must display posters explaining the wage increase. The posters must be hung in a conspicuous place, and businesses should allow their employees to read the notice.
The DOL's Wage and Hour Division has placed approved copies of the posters online. Employers can download and print the posters for free. Businesses, even organizations located in states where the minimum wage is higher than the federal hourly rate, should display the DOL-approved notices before the wage increase takes effect, officials said.
Congress approved the first increase to the federal minimum wage in 10 years in May 2007, as part of a supplemental spending package for the conflict in Iraq. The minimum wage increase had been included in the funding bill as a compromise proposal. President Bush signed the legislation (PL 110-28) into law on May 24, 2007.
Under the law, the federal minimum wage was set to be increased $2.10 per hour in three 70-cent increments. The third and final phase will increase the wage to $7.25 per hour and will take effect on July 24, 2009.
The states in which the increase in the federal minimum wage will generally have no effect because they already have minimum wages at or above the new federal minimum of $6.55 per hour are:
Alaska (the state minimum wage is $7.15)
Arizona (state minimum wage is $6.90, indexed to inflation)
California (state minimum wage is $8.00)
Colorado (state minimum wage is $7.02, indexed to inflation)
Connecticut (state minimum wage is $7.65)
Delaware (state minimum wage is $7.15)
Florida (state minimum wage is $6.79, indexed to inflation)
Hawaii (state minimum wage is $7.25)
Illinois (state minimum wage increased to $7.75 on July 1)
Iowa (state minimum wage is $7.25)
Kentucky (state minimum wage increased to $6.55 on July 1)
Maine (state minimum wage is $7.00)
Massachusetts (state minimum wage is $8.00)
Michigan (state minimum wage increased to $7.40 on July 1)
Missouri (the state minimum wage is $6.65, indexed to inflation)
New Jersey (the state minimum wage is $7.15)
New York (state minimum wage is $7.15)
Ohio (the state minimum wage is $7.00, indexed to inflation)
Oregon (the state minimum wage is $7.95, indexed to inflation)
Pennsylvania (the state minimum wage is $7.15)
Rhode Island (the state minimum wage is $7.40)
Vermont (the state minimum wage is $7.68, indexed to inflation)
Washington (the state minimum wage is $8.07, indexed to inflation)
West Virginia (the state minimum wage rose to $7.25 on July 1)
Note: Many employers in West Virginia are exempt from state law and can pay the lower federal minimum wage.
EEOC Issues New Compliance Guide on Religious Discrimination
The Equal Employment Opportunity Commission (EEOC) issued a new compliance manual section regarding workplace discrimination on the basis of religion. The section includes a comprehensive review of the relevant provisions of Title VII of the Civil Rights Act of 1964 and the EEOC's policies regarding religious discrimination, harassment, and accommodation. The EEOC said that it issued the new section in response to a doubling over the past 15 years of religious discrimination filings from 1,338 in 1992 to 2,880 complaints in fiscal year 2007.
Download a press release on the new compliance manual section, which includes links to the section, a question-and-answer fact sheet, and a best practices booklet.
Traveling with your laptop? Well here's some disturbing news. A study sponsored by
Dell and conducted by the
Ponemon Institute claims that 12,000 computers are lost each week in major American airports, more than 65 percent of which are never reclaimed. It’s not just a question of replacing your hardware, said one Ponemon executive. "Some 53 percent of people admit to carrying business confidential information and 65 percent of those people do not take appropriate steps to safeguard their information."
Their advice? Avoid distractions when you travel. Taking too many bags, for example, can make it harder to remember to grab your laptop after passing through the metal detector. And safeguard confidential information with passwords or biometric identifiers. Better yet, remove any sensitive data that won’t be needed on your trip. Yes, we know you know all this already, but that won’t stop you from feeling stupid (or worse) if it happens to you.
Health Beat
Study Faults the
Quality of Healthcare
American medical care is the most expensive in the world, but that does not mean we have the best quality of care in the world. In fact, the U.S. has fallen to last place among industrialized countries in preventing deaths through the use of timely and effective medical care, according to the
Commonwealth Fund.
The cost and quality of care varies widely across the country and access to care has worsened since the Fund's first medical report cards were issued in 2006. The report says the U.S. has made marked improvement in some measures of care and is still riddled with inefficiencies.
According to the report, France leads the world in preventable mortality, followed by Japan and Australia.
Money Matters
Study Says…Employers Shift
Pay Raises to
Top Performers
Salary planning for 2009 is in full swing. Last month,
Watson Wyatt Worldwide released salary projections suggesting employers would boost pay an average 3.5 percent in 2009. Later this month, Hewitt Associates will release its salary increase survey projecting an increase closer to 3.8 percent. And recently,
Mercer LLC released its report suggesting a 3.7 percent increase in 2009. Employers will reserve the bulk of their pay raises for higher performers.
Low-performing employees won't see their paychecks rise much. Top performing executives and managers can also expect bonuses on top of their base pay.
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