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LaDonna Kearney

HSA
HR Insight: IRS Announces HSA Limits for 2024 940 788 LaDonna Kearney

HR Insight: IRS Announces HSA Limits for 2024

HSA Limit Changes for 2024. Here is what you need to know:

In the recently released Rev. Proc. 2023-23, the IRS has made annual inflation adjustments to health savings accounts:

  • For calendar year 2024, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,600 for self-only coverage or $3,200 for family coverage, and for which the annual out-of-pocket expenses (deductibles, copayments and other amounts, but not premiums) do not exceed $8,050 for self-only coverage or $16,100 for family coverage.
  • For calendar year 2024, the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $4,150.
  • For calendar year 2024, the annual limitation on deductions for an individual with family coverage under a high deductible health plan is $8,300.

The HSA catchup contribution limit for those age 55 and older is set by statute at $1,000 and remains unchanged.

What’s behind the changes:

The Society for Human Resource Management noted that the annual contribution limits are rising by more than 7%, “in one of the biggest jumps in recent years.” These changes are due to the high inflation rates. The increased limits should bring additional attention to HSAs: “Many industry experts tout health savings accounts as a smart way for employees to save for medical expenses, even in retirement, citing their triple tax benefits: Contributions are made pretax, the money in the accounts grows tax free and withdrawals for qualified medical expenses are tax free.”

The SHRM said that at the end of 2022, Americans held $104 billion in 35.5 million HSAs.

This is just a summary of complex provisions. To see whether an HSA is right for you, we always recommend you speak with a financial professional.

©2023

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Free Meals
HR Insight: Free Meals as an Employee Benefit? 940 788 LaDonna Kearney

HR Insight: Free Meals as an Employee Benefit?

Free Food in the Office as a Benefit

Want to attract and retain workers? Who doesn’t? Consider free meals. Company-paid lunches are a major perk that’s hard to pass up, especially if you’re a millennial. USA Today reported that providing free food to your employees can result in a 67% job satisfaction rate.

Let’s look at this a bit more deeply. Workers become less focused as lunchtime approaches, and they are starting to think about where to get their next meal and with whom. This creates a bit of a drag on productivity. But by providing a free meal at the office, you remove the distraction.

And how much will this cost? Providing a daily $10 meal to a full-time employee costs $2,600 a year, but you make up the price by having staffers get back to work sooner; a mere 15 minutes of their on-the-clock productivity before and after lunch every day and the meal pays for itself.

If getting employees back in the office in the first place is your problem, try offering free meals. Free breakfasts and lunches are one of the top ways that companies are luring workers back to the office. It may be true that the way to employees’ hearts is through their stomachs.

And let’s not dismiss the notion that eating together creates strong social bonds. You’re bringing together a diverse group and giving them opportunities to make connections outside their teams and departments. On top of that, offering healthy meals to workers who might skip lunch or instead go for junk food translates into workers with more energy and focus in the afternoon.

You may be nixing the idea of daily free meals, but even an occasional company-provided lunch yields results. Most workers see a once-a-week catered meal as a great perk, boosting overall job satisfaction. You may opt for free coffee and bagels in the morning, which works well too.

There are more meal options than ever — food delivery services and on-site pop-up restaurants — for providing meals to employees. A prepaid meal card offers access to a monthly meal allowance that can be used in local restaurants, on food-delivery apps and in grocery stores, offering your team flexibility and control while you monitor your program. You’ll look like a hero to your workers to boot.

Eating together is a way to build engagement among teams so people can get to know each other better. It encourages discussions and a sense of belonging. Productivity rises as workers save time because they know there’s food provided at the office.

It can work almost anywhere

Once only the purview of companies like Google and Apple, free food is something small startups have added to their list of employee benefits. Value? With employees spending less time away from their desks, you can estimate cost savings per employee at anywhere from $2.50 to $4.50 per day. How? Your employees can work for an extra half an hour every day.

Especially for knowledge workers, sharing meals and communicating more frequently help build a collaborative environment. Take those who write code, for example. It can take 32% longer without effective communication. Employees are more comfortable where there are trust and strong social bonds in the workplace. Breaking bread together encourages breaking down barriers and getting people to act more naturally.

Physical space is also a key to relationship formation — friendships develop during brief and passive contacts made going to and from home or walking about the neighborhood. An office cafe is a great place not only to facilitate that physical contact among co-workers but also to entice new people to come to work for your company — people really want to work at a place that cares about their health and wellness. Happy, loyal employees are likely to speak highly of your business to customers and to their professional connections, friends and family. Eating meals together helps nourish team members, literally and figuratively, and creates an environment of support for their efforts.

Of course, you may want to work with an experienced human resources consultant to help you customize a plan for your company. And remember that even if you provide this benefit, you still must abide by other regulations, such as rules for nonexempt employees.

©2023

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Cryptocurrency
HR Insight: Cryptocurrency 940 788 LaDonna Kearney

HR Insight: Cryptocurrency

Can Employers Pay Wages in Cryptocurrency?

Despite the controversy surrounding it, cryptocurrency remains a hot topic. In the employment world, a top question is whether employers can pay employees in cryptocurrency. Before we determine this, let’s explore “cryptocurrency” a bit.

What is cryptocurrency?

Per the Cambridge Dictionary, cryptocurrency is “a digital currency produced by a public network, rather than any government, that uses cryptography to make sure payments are sent and received safely.”

In other words, cryptocurrency is digital money that utilizes encryption to secure transactions. These transactions are done without the involvement of banks and intermediaries via a distributed public ledger called blockchain.

There are many types of cryptocurrencies, with Bitcoin being the first and the most popular to this day. Some experts predict that Bitcoin’s value will eventually reach $100,000, though the possibility of collapse is ever present.

According to Kapersky.com, “Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.”

Among the interested parties are employees. In a 2022 study by Zety, 80% of respondents said they wanted to receive their salary or bonuses in cryptocurrency.

Can cryptocurrency replace a paycheck?

Generally speaking, it is not a recommended practice. Here’s why.

The Fair Labor Standards Act (FLSA) requires “payments of the prescribed wages, including overtime compensation, in cash or negotiable instrument payable at par.”

Note that the FLSA has some exceptions to the negotiable instrument rule. For instance, employers may be able to count food, housing or other facilities as wages. Generally though, employers must use cash or a negotiable instrument payable at par — such as direct deposit or paper check. Moreover, some states require wages to be paid in cash or a negotiable form of U.S. currency.

As explained by Littler, a law firm specializing in labor and employment law, “Cryptocurrency is neither cash nor a negotiable instrument in the United States and is not backed by the government or other legal entity.” As a result, paying base wages or salaries in cryptocurrency is not advised.

The reasoning is that employees should be paid in a manner that allows them to immediately access the payment. This likely won’t happen with cryptocurrency payments. Secondly, many states require wages to be paid free of cost to the employee. Therefore, employees must be able to convert their cryptocurrency payments into U.S. dollars without any fees. However, fees are normally associated with exchanging cryptocurrency to U.S. dollars, selling cryptocurrency or even using a cryptocurrency exchange card.

Some experts argue that employers can simply satisfy the FLSA‘s minimum wage and overtime criteria in U.S. currency and then pay any additional amounts in cryptocurrency. However, employers taking this route must also consider the rules for reporting cryptocurrency payments to the taxation agencies.

Despite any leeway made possible by the FLSA, employers should still proceed with caution, given the various governmental and administrative constraints.

©2023

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Employer Brand
HR Insight: Employer Brand 940 788 LaDonna Kearney

HR Insight: Employer Brand

If You Build It, Employees Will Come.

Who are you, as a company? The overall company brand defines the quintessential qualities of the organization, at large, that is directed to both the general public and all stakeholders, including customers, clients, strategic partners, investors and/or regulators. Employer branding, on the other hand, targets job seekers and employees. It zooms in on the workforce and prospective hires to discover how these groups really perceive your organization.

The employer brand communicates every facet of your employees’ experience, from work/life balance and social values to hiring and onboarding. Buzzword aside, you are looking to figure out your unique employee value proposition. Employers that establish a successful brand own an intangible asset that can be widely parlayed.

The value proposition is a full package

Every organization needs to take a deep dive and examine itself from the inside out. What special differentiating features does your company offer, beyond pay checks of course, making it a rewarding place for an employee to hang his or her hat? Why should a job candidate choose to work for you and not elsewhere?

Your goal is to position yourself as the employer of choice. If that works, you will spark excitement to differentiate yours from more generic brands. In doing so, you will need to address every touchpoint. Some of the main marketing tools for current and potential employees are:

  • Job descriptions.
  • Websites with career pages.
  • Social media profiles.
  • Onboarding materials.
  • Job acceptance and rejection letters.
  • Performance reviews.
  • Internal communications, such as newsletters.

The list is long and can be leveraged to construct a powerful employer brand, which then should be constantly promoted. The human resources department is directly responsible for the brand, but other parties also coordinate efforts to help shape a firm’s identity, including the C-suites, line managers and the marketing department members.

For example, when management approves benefits, it is up to HR to implement them and create marketing tools to promote them. Recruiters should also put the employer’s corporate culture, work environment and reputation into a recognizable brand.

How to build it

The first task for your employer brand is to nail down what your organization stands for both inside and outside the corporation. Sites such as Glassdoor and LinkedIn give a glimpse of outsiders’ perceptions. Conducting surveys among employees and job candidates provides further insights. Also, digging deeper into workshops is useful, since culture is so nuanced and subjective.

Compile a list of leading questions and employment topics to be discussed, such as:

  • What makes us different?
  • Do we offer unique or unusual benefits?
  • Are we treating our current employees well and could we improve?
  • Where should we spread the word about our company?
  • How do people find out about working for us?
  • What channels should we use to promote our brand?
  • Can we measure the results?

Next, it is time to give substance to the ideas and implement an action plan. First among the best practices for successful employer branding is keeping your current employees loyal and satisfied. In today’s social media landscape, negative stories can quickly go viral, undermining hard efforts elsewhere. Other practices for boosting the brand are to:

  • Provide feedback and transparency in interacting with new job candidates.
  • Support some suitable causes, ideally ones associated with your industry.
  • Keep active on social media channels and educate your employees in social media skills — post images of your workspaces and group gatherings, employee videos, testimonials and blogs.
  • Host and participate in public events that can create a positive, enduring impression.
  • Leverage committed employees as brand advocates.

Measure and monitor all these avenues, focusing on areas such as cost per hire and satisfaction surveys.

Employer branding wins

A good brand yields benefits in cost savings and productivity. The war for talent is fierce, so aim to attract and retain the best candidates to avoid turnover. Extra points gained from a solid, credible reputation count, alongside money spent on salaries and benefits, and help level the field with larger organizations. A wider candidate pool means faster hiring times, as well.

Send a clear message where you excel, including:

  • Training and development.
  • Leadership and collaboration.
  • Quality of products or services.
  • Stimulating work and environment.

Certain firms have become known as great places to work, whether for their compensation, opportunities or innovative cultures. This is a club you want to join.

©2023

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Employee Taxes
HR Insight: How to Deal with Employee Taxes 940 788 LaDonna Kearney

HR Insight: How to Deal with Employee Taxes

Employee Taxes – What You Need to Know.

Employers generally must withhold income tax from employees’ wages. To figure out how much employee taxes to withhold, you need to use the employee’s Form W-4, the appropriate method and the appropriate withholding table described in Publication 15-T, Federal Income Tax Withholding Methods. You’ll deposit your withholdings based on your business and the amount you withhold.

File returns four times a year, and at the end of the year, prepare and file Form W-2, Wage and Tax Statement, to report wages, tips and other compensation paid to employees. Each employee needs a copy. You will use Form W-3, Transmittal of Wage and Tax Statements, to transmit Form W-2 to the Social Security Administration.

Know the details

The situation can get complicated when both employee and employer have to contribute. For example, the current tax rate for Social Security is 6.2% for the company and 6.2% for the employee. For Medicare, the current rate is 1.45% for you and 1.45% for the employee. Also, an Additional Medicare Tax applies to an individual’s Medicare wages that exceed a threshold amount based on the taxpayer’s filing status. You’ll withhold an Additional Medicare Tax of 0.9% for single filers who make more than $200,000, and for married couples filing jointly, the threshold is $250,000, but if filing separately, $125,000. You don’t have to match this additional portion.

Employers report and pay Federal Unemployment Tax Act tax separately from federal income tax and Social Security and Medicare taxes. You pay FUTA tax only from your own funds. Employees don’t pay this tax or have it withheld from their pay.

Mark your calendar with key employee tax dates. The IRS has an Employment Tax Due Dates page with information on what you need to do and when you need to do it. The matching share of the Social Security and Medicare payroll taxes is collected as the Federal Insurance Contributions Act taxes, and your part is considered a business expense, not a liability. Because it’s a business expense, it can be written off at tax time.

Don’t forget the states

This is just the beginning of an employer’s responsibilities. You are likely subject to state withholding rules as well. It’s essential that employers be on top of the general rules and any annual rate changes. Understanding these tax issues is important since you bear the responsibility of fulfilling your tax obligations related to your employees. It’s important to send out payments on time to avoid penalties and late fees. Be sure to work closely with financial professionals to make sure you stay compliant.

©2023

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cybersecurity remote employee training
Cybersecurity Training for Your Remote Employees 940 788 LaDonna Kearney

Cybersecurity Training for Your Remote Employees

Having Remote Workers Brings on New Challenges with Cybersecurity. Know the Risks and Offer Cybersecurity Training.

According to a Digital Defense Report published by Microsoft in 2021, the private industry’s support of remote work, in addition to factors introduced by the COVID-19 pandemic, has made remote workers a lot more susceptible to the actions of cybercriminals. Per the 2021 Microsoft report, “While most industries made the shift to remote work due to the pandemic, it created new attack surfaces for cybercriminals to take advantage of, such as home devices being used for business purposes.”

As you can infer, for companies that employ remote workers, it is important to implement training measures that teach them all about various cybersecurity dangers. But what should the training process look like?

Let’s explore some areas of consideration for your training process. These suggestions have been put forth by SANS Security Awareness in its Security Awareness Deployment Guide that covers how to securely work from home. The SANS guide outlines the core cybersecurity risks that remote employees are most likely to face as they work from the comfort of their homes.

Risk No. 1: Social engineering attacks

Social engineering attacks are one of the most dangerous and frequent risks that remote workers face while on the job from home. In essence, social engineering risks refer to situations where remote workers face psychological attacks. In these instances, the social engineering perpetrator tricks remote workers into making mistakes.

The perpetrators do this by taking advantage of vulnerabilities that remote workers deal with during difficult times involving a lot of change. You can think of the COVID-19 pandemic as a prime example of a time when social engineering risks were very prominent.

However, rather than focusing strictly on phishing attacks via email, it is important that employers pay attention to other modes of social engineering attacks, such as via text, over the phone, on social media and through the spread of fake news.

Risk No. 2: Not having strong passwords

A main cause of global data breaches is none other than weak passwords. Though not the only contributing factor, weak passwords put remote workers at risk of having their information stolen or compromised. To counter the likelihood of your remote employees being subjected to data breaches, make sure you train them on the importance of strong passwords and how they can reduce password-related risks.

During the training period, consider addressing the following points:

  • Setting up extra security measures, such as passphrases.
  • Establishing unique passwords for every online account.
  • Utilizing password managers.
  • Enrolling in multifactor or two-factor authentication.

Risk No. 3: Using outdated systems instead of updating them

Something else to keep in mind is that out-of-date technologies are gold mines for cybercriminals who want to target remote workers. To combat this, take measures to ensure that the operating systems, online applications, mobile applications and other forms of technologies that are used by your remote employees are always updated.

Also, remote employees who use their own personal devices for work-related tasks should be advised about the importance of keeping their systems updated too. For example, remote workers can enable automatic updates, which is especially helpful if updating devices is something your remote workers put off or forget to manually do.

3 more cybersecurity topics to cover in training

For starters, you’ll want to let your employees know about the importance of identifying and addressing suspicious online activity. Let your employees know what suspicious activity looks like and how they can report any suspicious activity they see.

From there, let your employees know that if they work remotely outside their own homes, they are still in harm’s way given the public nature of their workplace. As such, make sure they consider the cybersecurity threats associated with their daily work routines.

Finally, inform your remote workers about the importance of keeping their work-related technology private. Relay the fact that they should not let unauthorized persons access their work-related technology, including family and friends.

Make it a point to offer cybersecurity training to all remote employees

Training new remote employees on all things cybersecurity during orientation is always a wise idea. For remote employees who have been with your company for a longer period of time, make sure you provide training periodically so that your long-term remote employees are educated on critical cybersecurity developments as they arise.

To ensure that the training you provide to your employees is accurate, up to date and thorough, consider hosting training sessions that are led by remote-work cybersecurity experts.

©2023

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HR Employment Law FMLA
HR Insight: 30 Years of FMLA 940 788 LaDonna Kearney

HR Insight: 30 Years of FMLA

FMLA Celebrates 30 Years of Providing Employees with Guaranteed Medical Leave. Here’s What You Need to Know.

Ever since it was put into action, the FMLA has made it possible for working Americans to receive a guaranteed 12 weeks of unpaid leave in the event they need to recover from an illness, care for a family member under specific circumstances or stay home with a newborn, all without fearing that they will lose their job as a result. However, keep in mind that employees are usually required to submit a request to take FMLA leave in advance of taking FMLA-related time off.

Which businesses qualify for FMLA-related time off?

Now, the stipulations of the Family Medical Leave Act apply only to businesses that employ more than 50 workers, meaning employees who work at very small businesses often don’t qualify for FMLA leave. If your company meets the size requirement, has employees who have worked within a 75-mile radius and said employees have worked for you for at least 20 workweeks over the course of the current or previous calendar year, then you will be recognized as an employer that can offer FMLA leave.

Requirements of the employees

Any requests made by employees for FMLA leave are expected to be made no fewer than 30 days in advance of the employee’s intended first day of leave. While a 30-day notice is the minimum, employees should notify their employers of their desire to take FMLA leave as soon as possible. After doing so, employees are also required to provide their employer with medical documentation relevant to the FMLA leave request within 15 days of the start of their leave.

Requirements of the employers

On the employer side of things, an employer has to notify the employee who is requesting FMLA leave about the status of their request within five business days. If the employer denies the employee’s request for FMLA leave, the employer must provide the employee with a valid reason as to why their request was not approved.

Employees who take FMLA leave are allowed to use the time all at once or in increments. Whether your FMLA leave is taken consecutively or intermittently will depend on the needs of the employer as well as the specifics of the need for FMLA leave. The FMLA allows employees to take their leave in either 12- or 26-week increments over the course of 12 months, but ultimately it’s up to the employers to decide what they prefer their employees do.

For a lot of employers, the FMLA is preferred to be enacted on a rolling basis to ensure their employees do not take 12 weeks of FMLA leave at the end of December followed by 12 more weeks at the beginning of January. And to clarify, even though FMLA leave is unpaid time that employees take off work, their jobs are protected and the employee will still be employed when the FMLA leave period comes to an end.

For some small businesses, their workforces fluctuate and have fewer than 50 workers at times. So what does this mean in terms of their ability to provide their employees with the option of FMLA leave? Essentially, these businesses still qualify for FMLA leave coverage as long as the business employed at least 50 workers for 20 weeks in either the current or previous year.  

Now, are part-time employees eligible for FMLA leave? Such employees can receive up to 12 weeks’ worth of unpaid leave for both family reasons and medical purposes as long as the employees have worked a minimum of 1,250 hours, though this does not include paid nor unpaid time that was taken in the previous 12 months.

In other words, part-time workers are eligible for FMLA leave if they work approximately 24 hours per week over the course of 52 weeks. Although FMLA leave is unpaid, businesses must maintain the existing group health care benefits that were in place prior to the employees’ FMLA leave. Likewise, employers must restore either the same position or an equivalent role for the employee once their leave is over.

According to Entrepreneur magazine, FMLA leave, like intermittent leave, can be taken in separate and multiple blocks of time. However, there are two main circumstances that must be present if FMLA leave is to be taken: The employee is requesting FMLA leave for a medical reason or to focus on a “serious condition.”

Back in 2009, new regulations were put in place in order to define what a serious condition meant in the context of FMLA leave. Since then, a serious condition is recognized as three consecutive days’ worth of incapacity in addition to two visits to a health care provider. These two visits are required to have taken place within 30 days of the incident that caused the serious condition.

The flip side

While FMLA leave is a highly appreciated option for many working Americans, the law still places workers who cannot afford to take unpaid time off work at a disadvantage. Countless other workers who either do not qualify for FMLA leave or cannot take unpaid leave for economic reasons do not yield many benefits from FMLA leave, if any at all. In fact, according to Fortune, upward of millions of employees refuse to take FMLA leave even if they want to simply because the leave is unpaid.

Please note that there are many states in the U.S. that offer paid family leave programs that allow employees to take time off from work for qualifying reasons. Keep in mind that state-regulated programs such as these are not controlled by the federal government nor are they part of the federal FMLA program.

Look into the options in your state and review the requirements to see whether paid family leave or paid medical leave is an option available to you. As always, protect yourself and ensure your options are in compliance with the FMLA by speaking with a legal adviser. Professionals can assist you in the process of mitigating any legal repercussions that may arise and can also help you understand how the FMLA may apply to your specific situation.

©2023

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mindful meditation HR Insight Wellness Stipends
HR Insight: An Overview of Wellness Stipends 940 788 LaDonna Kearney

HR Insight: An Overview of Wellness Stipends

HR Insight on Wellness Stipends – What You Need to Know.

The importance of health and wellness in the workplace is indisputable. In a 2021 survey, 79% of employees said their employer’s well-being programs helped them become as productive as possible. Additionally, 79% said these programs helped them avoid getting sick. Here is your HR Insight on Wellness Stipends.

Wellness/well-being programs often provide noncash benefits, such as smoking cessation, weight loss, stress management and health screening programs. They can also come in the form of wellness stipends.

A wellness stipend is an allowance given to employees to help pay for eligible physical and mental wellness expenses.

It should not be confused with a health stipend, which covers medical expenses like health insurance premiums and out-of-pocket health care costs.

Wellness stipends are limited to expenses for items that promote general wellness and well-being.

For example, wellness stipends may be used for:

  • Counseling to help employees cope with stress.
  • Weight loss program membership.
  • Ergonomic furniture to support a comfortable office work environment.
  • Gym membership or equipment.
  • Exercise/fitness classes.
  • Yoga classes.
  • Mobile apps for mindfulness/meditation.
  • Nutrition classes.
  • Diabetes education.
  • Chiropractic care.

A real-world example

According to a 2022 HR Dive article, Ernst & Young offers a comprehensive wellness stipend program. Employees can use their stipend to pay for:

  • Home office equipment
  • Fitness classes.
  • Workout equipment.
  • Meal delivery services.
  • Electric bikes and converter kits.
  • Blenders.
  • Juicers.
  • Air fryers.
  • Massages.
  • Tents and camping equipment.
  • Mattresses.
  • Airfare.
  • Hotels and other lodging.
  • Rental cars.

Per HR Dive, “EY has also expanded the fund to include a form of self-care that its chief well-being officer acknowledges as ‘controversial.’ Gaming consoles and chairs, headsets and ear buds, controllers, monitors, and webcams are all eligible for reimbursement by EY.” The same goes for the actual video games.

Of course, not every employer can afford to offer such an extensive list of items. Also, some employers might not see certain items as necessary and will prefer to stick to the essentials.

In the end, the stipend amount depends on what the employer can afford or wants to pay.

According to HR Dive, as of 2022, EY pays a generous 75% of the cost of eligible wellness expenses, up to a maximum stipend amount of $1,000 per year per employee. Other employers can choose to offer a different or smaller amount (e.g., $500 per year per employee) based on their own budgetary constraints.

Wellness stipends are distributed on a monthly, quarterly, semiannual or annual basis. For example, you can choose to offer your employees a $50-per-month wellness stipend.

A wellness stipend program can increase the quality and retention rates of employee talent.

But before offering such a program, try to make sure your employees will actually use the stipends. Keep in mind that wellness stipends are taxable to employees, and this may affect the program’s participation rates.

©2023

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HR insight noncompete agreements
HR Insight: Are Noncompete Agreements Enforceable? 940 788 LaDonna Kearney

HR Insight: Are Noncompete Agreements Enforceable?

HR Insight – Will My Noncompete Agreements Hold Water?

You may want to require employees to sign noncompete agreements to keep them from working for rival companies. Will these protect the business? The answer is … maybe. Over time, courts have become less willing to uphold strict provisions. Indeed, President Biden has issued an executive order for the Federal Trade Commission to examine abusive noncompete agreements. That order will have little direct impact, but it indicates which way the wind is blowing — toward a more employee-friendly approach. Although no current laws have changed, employers are likely to face more scrutiny.

One size does not fit all.

In many states, noncompete agreements are unenforceable. Period. In at least one jurisdiction, the District of Columbia, laws not only ban noncompete agreements but even grant people the right to work simultaneously for multiple employers.

Some states are also distinguishing between higher- and lower-paid staff, acknowledging that it may not be fair to curtail the job opportunities of rank-and-file employees such as those of upper management.

Where noncompetes are permissible, however, similar principles apply:

  • Is it necessary to protect an employer’s legitimate business interest?
  • Does it cause undue hardship for an employee? Courts do not want employees to be utterly blocked from finding new work.
  • Is a public interest involved? Certain industries such as medicine and education are so important that public policy supports them.
  • How long and how far does an agreement extend?

With a variety of industries and firms operating across the board, you must drill down into the provisions regarding each situation. The broader the time span and geographic area at stake, the less likely the agreement is to be enforceable. Reasonable duration and scope may differ greatly from one company to another. It may be excessive to demand national or global restrictions for a local, in-state business. Many noncompetes are typically drafted to remain in force for one or two years — indeed, judges tend to frown on lifelong prohibitions.

The crux is an employer’s legitimate interests. The object is to prevent employees from harming their employers by introducing their best customers to a competitor, sacrificing hard-earned goodwill or disseminating confidential knowledge and trade secrets. The former boss does not want their employees to start their own breakaway company or develop competing products, let alone recruit other former coworkers to a new rival venture.

Consider consideration

Contract law generally requires a quid pro quo to validate an agreement, and noncompetes are no exception. A legitimate contract requires something of value to which the other party is not already entitled.

Although a job offer may be contingent on a prospective employee signing a noncompete, how about those employees you are already employing? If you want them to sign new noncompetes, they need something extra now to count as consideration. That something can take diverse forms, from more money or new job responsibilities to a fancier title or increased benefits such as vacation time. It need not be very valuable, but it must be concrete.

A short checklist for business owners

Watch out for common pitfalls when you are structuring and maintaining your noncompete agreements.

  • Enforce your agreements evenhandedly and without exception across your workforce to avoid any discrimination charges.
  • If you operate in multiple states, be careful about conflicting state laws.
  • As a buyer or seller of a business, be sure to receive noncompetes from the other side for relevant employees.
  • In case your noncompetes eventually get struck down, use confidentiality agreements for additional backup.
  • Include noncompete language in employment contracts to cover fired employees.
  • Tactfully remind any departing employees about any noncompetes they may have signed.

The law of noncompete agreements depends on a host of specific conditions and circumstances. Be sure to consult with industry experts for advice in drafting or interpreting your agreements. Reach out to PeepTek Solutions for further HR Insight: noncompete agreements and other topics.

©2023

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Diversity, Equity and Inclusion
HR Insight: Diversity, Equity and Inclusion 1024 858 LaDonna Kearney

HR Insight: Diversity, Equity and Inclusion

Exactly What Is Diversity, Equity and Inclusion?

In the workplace, diversity, equity and inclusion, also known as DEI, refer to the qualities and experiences that make each person unique and how employers can use those attributes to support business goals.

To truly understand diversity, equity and inclusion, you’ll need to break down each term.

Diversity

Diversity refers to the similarities and differences among individuals. It takes all facets of personality and individual identity into account.

Examples of diversity include:

  • Race.
  • Ethnicity.
  • Nationality.
  • Age.
  • Disability.
  • Sex.
  • Gender Identity.
  • Language.
  • Generation.
  • Neurodiversity.
  • Sexual orientation.
  • Religious beliefs.
  • Veteran status.
  • Physical characteristics.
  • Family background.
  • Socioeconomic status.
  • Life experiences.

Equity

In the workplace, equity is about ensuring fair treatment of all employees when it comes to access, opportunity and advancement within the company. To achieve equity, employers must identify and work to remove obstacles to fair treatment, especially for underrepresented and disadvantaged populations. This requires a keen understanding of the inequities in societal systems and those present within the organization.

Inclusion

Inclusion refers to how welcomed, supported, valued and respected each person feels as an employee.

According to the Society for Human Resource Management, “Inclusion is a two-way accountability; each person must grant and accept inclusion from others. In such an environment, every employee tends to feel more engaged and is more likely to contribute to the organization’s business results.”

“Diversity and inclusion” has its own acronym (D&I) because they go hand in hand.

Diversity offers the potential for more creativity and innovation in the workplace. In other words, when people with different characteristics put their heads together, great things can happen. But diversity needs a vehicle to realize its potential — and this is where inclusion comes in. Per the SHRM, “Inclusion is what enables organizations to realize the business benefits of this potential.”

In short, an inclusive workplace leverages the strengths of individuals from diverse backgrounds to effectuate positive outcomes. 

DEI: Not a new concept

From a workplace perspective, DEI is a relatively new term. However, the practice of DEI has been around for decades. A report by AcademyHealth says DEI can be traced back to the civil rights movement in the 1960s.

From the 1960s to the mid-1970s, DEI focused “on tolerance, meaning the acceptance of the integration of workplaces, schools, and communities.” Then, from the mid-1970s to the 1990s, the focus switched to multiculturalism and awareness of accomplishments by different racial and ethnic minorities.

In more recent years, the emphasis shifted to inclusion and equity to reflect demographic changes. As a result, DEI has expanded to include identities such as gender, religion, sexual orientation and national origin.

In the workplace, DEI initiatives should be adopted strategically, with a strong commitment toward all three components. Otherwise, employers risk “going through the motions” — a recipe for inauthenticity and failure.

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