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Top 10 HR Challenges Growing Businesses Must Prepare For in 2020

HR practices and policies must evolve over time to reflect emerging best practices, changes to regulations, and shifting cultural values.

Throughout the last decade, our shared understanding of what the workplace looks and feels like has gone through significant alterations, and as we near 2020, it’s a logical time for organizations of all sizes and industries to reassess their HR policies and procedures.

With that said, many of HR’s biggest challenges are baked into the nature of the work, but new technologies and innovative approaches are turning those challenges into areas of new opportunity.

Moving forward, we’ll take a look at the biggest HR challenges that growing businesses must have on their radar as we prepare for the new year.

1.   Employee Performance

One of any HR department’s main responsibilities is creating a team and an environment in which people can do great work. No human resources department can operate at its highest level unless there’s a company-wide awareness of expectations and accountability. As a business, you can’t correct, reprimand, or discipline anybody with any real authority unless you’ve clearly articulated goals, KPIs, and an evaluation framework that everybody knows and cares about.

2.      Terminations

Getting termination right is just as important as getting hiring right. The way you separate from former employees affects your reputation in the talent marketplace and the morale of your remaining team.

If you don’t have a codified, iron-clad termination procedure that’s been vetted by your legal team, you could be leaving your organization open to potential lawsuits and fees. Regulations on termination practice vary from state to state, so it’s important to be aware of your local laws, especially if your organization has offices in various states.

3.   Employee Leave (FMLA, Parental, Personal, Other)

The dialogue around planned employee leave has changed tremendously in recent years. The aging population means that many professional age workers are medical or legal custodians of older family members, and shifts in parenting practices, mental health awareness, and beyond have an increasing number of employees requesting time away from the office.

As the employer, you must be prepared for every conceivable leave request and have policies in place that explain when and how much leave is permitted, what process employees must go through for approval, and how their return to the team will be arranged and executed. Any gap in your explicit policies is a potential legal liability.

4.   Harassment Prevention, Training, and Investigations

As we approach the fourth year of the #MeToo movement, public and individual awareness of harassment has never been higher. That means your prevention training procedures and reporting/investigation frameworks must be stronger and more comprehensive than ever in order to provide the best possible protection for you and your employees.

With that said, nothing is more important than follow-through. If you have great policies on the books but don’t honor them, you’re compromising your company vision and creating greater opportunity for your organization to be hurt by legal disputes. If there’s one area of your HR practice that you are targeting for improvement this year, make it your harassment prevention, training, and investigation policies.

5.   Training for Managers

Team- and department-level leadership has the capacity to build great engagement and motivation or send employees running for the door. The best way to ensure the former happens (and to avoid the latter) is to provide your management teams with consistent, explicit training on how to approach coaching, mentoring, feedback, discipline, staffing, etc.

Managers in even the best organizations – especially fast-growing ones – often have gaps in their knowledge of new employee management strategies and best practices. That’s because many of them were promoted into their positions for being all-star workers. While they still have the knowledge and perspective that they showed off in that role, they don’t have the same degree of experience and preparation regarding management responsibilities. By providing them with impactful training, you build your management team into more valuable leaders.

6.   PTO/Sick/Vacation Policies

One of the biggest mistakes organizations make is not clearly articulating how different absences from work should be planned, coded, and compensated. Depending on the state where your business is located, there may be specific definitions of “Paid Time Off” versus “Sick Time” versus “Vacation Time” that you must obey.

Policies must clearly establish a rate of PTO/sick day/vacation time accrual, procedures and appropriate contacts for approval, carry-over maximums, buy-back maximums, and so on. Remember, if you leave any of those considerations out in your official policies, you can be subject to a substantial legal penalty.

7.   Attendance

We’ve already discussed employee leave and PTO, but in addition to those policies, every organization should have clear expectations regarding employee attendance on record. Procedures should exist for maintaining appropriate communication about attendance and building dialogue around excessive absences with an eye towards creating a rich, clear documentation trail for future discipline, termination, etc.

Of course, your exact framework must be dictated by the way you track attendance. Policies must exist to explain expectations for both hourly workers who have a timecard as well as salaried employees, temporary workers, contractors, etc. The better a job you do articulating expectations, the better you can do holding people accountable, keeping them at their desks, and removing team members whose absenteeism affects overall team performance.

8.   Reimbursement Policies

Many states have recently added or changed legislation about reimbursement of business expenses. As 2020 approaches, it’s crucially important that you review your local regulations to double-check that your employee reimbursement policy is up to date.

Your policies need to explain which expenses are reimbursable, what documentation and forms are required for reimbursement application, how applications for reimbursement will be approved, and how reimbursement will be delivered to the employee. The entire program must be spelled out in specifics, or you risk noncompliance.

9.   Legalization of Marijuana

State laws surrounding the use of cannabis have shifted en masse over the last decade, and many jurisdictions now allow for legal medical and recreational use. With that said, marijuana is still illegal at the federal level, and as an employer, you need to understand how that could potentially affect your business and employees who use cannabis.

As state and federal marijuana policy continues to evolve and take shape, you must articulate a clear company policy for today and start proactive planning about what tomorrow’s policy might look like, depending on the results of elections and general direction of the culture.

10.  ADA Amendments Act (ADAA) Compliance

The Americans with Disabilities Act was a monumental piece of legislation when it was passed into law in 1990s, and its scope and complexity only grew with the ADA Amendments Act of 2008. As we near 2020 and our understanding of “disability” continues to evolve, it’s crucial that every corporate organization in America has a specific plan and support framework in place to ensure compliance.

Of course, compliance isn’t just about workplace accessibility; it’s about inclusion and providing team members with services to ensure their needs are met. If you don’t have official policies describing how employee needs will be assessed and met on a continuing basis, you’re only halfway there. At the same time, it’s important to remember how employee leave, absenteeism, and disability can all be interconnected, which means your disability policy must account for leave and vice versa.

Illinois Employers: Are You Ready For Legalized Recreational Cannabis Affecting Your Workplace?

If not, now is the time! Illinois just became the 11th state to permit recreational cannabis. Governor Pritzker signed this legislation, as promised, on June 25, 2019.  Beginning January 1, 2020, the Cannabis Regulation and Tax Act (“Act”), will allow adults (21+) in Illinois to possess and consume cannabis. While there is a lot “rolled” into the 600 plus page law (pun intended), there are significant employment pitfalls for employers with regard to enforcing drug free workplaces.  We are here to assist you in avoiding these pitfalls and give you some practice tips in preparation of the new law taking affect.

The good news is, the Act expressly permits employers to adopt and enforce “reasonable” and nondiscriminatory zero tolerance and drug free workplace policies, including policies on drug testing, smoking, consumption, storage, and use of cannabis in the workplace or while on-call – which is obviously good for employers.

However, on the flipside, the Act’s language indicates that employers are not allowed to take an adverse action against an applicant or employee for their marijuana usage outside the workplace. This is bad for employers since it makes it much more difficult for employers to identify and address use of marijuana by employees due to issues with marijuana testing not being like alcohol testing which calculates more accurately impairment at the time of testing.  In particular, the Act amends the Illinois Right to Privacy in the Workplace Act (“Right to Privacy Act”), which prohibits employers from restricting employees from using legal products outside of work.  Specifically, the Right to Privacy Act is amended to provide that “lawful products” means products that are legal under state law, indicating that recreational and medical marijuana are legal products that must be treated like alcohol and tobacco. Thus, employers may not discriminate against an employee or applicant who lawfully uses cannabis (recreationally or medically) off-premises during nonworking and non-on-call hours.  Again, a difficult task given a test for marijuana alone will not be enough since testing does not include current impairment.

Much like with the Illinois medical marijuana law, this Act changes the emphasis from whether an employee “used” marijuana while employed, to whether the employee was “impaired” or “under the influence” of marijuana while at work or working. As a result, drug testing without any other evidence of the employee actually being impaired at work or while working will open the door to legal challenges.  Specifically, refusing to hire, disciplining, terminating, refusing to return an employee to work or taking an adverse action against an employee or applicant who fails a pre-employment, random, or post-leave return to duty drug test for marijuana will arguably create a claim for the employee against an employer for a violation of Illinois law.

For example, an employee who undergoes a urine drug test (which shows use of marijuana within 30-45 days) following a workplace accident may argue that “recreational cannabis was lawfully used outside of work, and the accident/injury was unrelated to the employee’s legal use of cannabis outside of work.”  Without more than the drug test result, the employer would be in a vulnerable position to argue against or defend such a claim.  However, if the employer completed a post-accident report, which included a reasonable suspicion checklist, in which a trained supervisor observed and recorded symptoms/behaviors of drug use, the employer would be in a much better position to take an adverse action against the employee and dispute any such claim by an employee based on the observations and positive drug test.

With the changes to the Right to Privacy Act, it is important for employers to understand the potential exposure and damages. Under this Act, aggrieved employees can recover actual damages, costs, attorneys’ fees and fines. As such, employers should make sure their practices and procedures are practical in light of these changes, until and unless the legislature or a court provides further clarity.   

Interestingly, the Act neither diminishes nor enhances the protections afforded to registered patients under the medical cannabis and opioid pilot programs.  The catch here is that while cannabis use is not protected under federal law, the underlying medical condition for which the employee is using cannabis is likely an ADA and IHRA-covered disability!  Much like under the Illinois medical marijuana law, the Act appears to require employers to take an additional step before disciplining or terminating an employee based on a “good faith belief” that the employee was impaired or under the influence of cannabis while at work or performing their job.  After the employer has made a “good faith belief” determination and drug tested the employee – but before disciplining or terminating an employee – the employer must provide the employee with a reasonable opportunity to contest that determination.  Once the employee is provided a reasonable opportunity to explain, an employer may then make a final determination regarding its good faith belief that the employee was impaired or under the influence of cannabis while on the job or while working, and what, if any, adverse employment action it will take against the employee without violating the Act.  Requiring an employee to go through drug testing is still currently the best practice as a positive drug test will provide additional support for a supervisor’s reasonable suspicion determination.

Here Are Some Practice Tips to Protect ‎Your Workforce and Diminish Risk:

  1. Educate yourself and evaluate all Company policies and practices that touch on providing and ensuring a safe workplace, including job descriptions (especially those safety-sensitive positions).  Speak to legal counsel on an intimate basis. Assess workplace cannabis-tolerance and implement policies that can be enforced consistently amongst similarly situated employees.  Policies that should be reviewed (and that could be affected) include those addressing health and safety (including accident reporting, smoking, and distracted driving), equal employment opportunity policies, workplace search/privacy policies and drug testing policies.  You should also review with legal counsel, your drug testing vendor as well as your Medical Review Officer, the drug testing methodology being used to make sure that such is producing results that are useful, accurate and well vetted (e.g., using a test that determines cannabis use within the last 30 days is not as helpful as one that may test usage within 6-12 hours).
  2. Ensure managers and supervisors are well trained and capable of enforcing policies.  Remember – exceptions and favoritism lead to discrimination claims.  Conducting training, especially training on reasonable suspicion detection, will be necessary to avoid legal challenges to a supervisor’s reasonable suspicion determination.  Creating and/or updating forms for accident reporting (including witness statements), reasonable suspicion checklists, and established protocols for addressing suspected impairment in the workplace, is now more critical than ever.
  3. Clearly communicate management’s position and policies to employees, especially where there is a shift in current policy or practice.  Educate employees on the effect of lawful and unlawful drug use and the employer’s policies regarding marijuana.  Remember, marijuana is still illegal under federal law, and, thus, you may have a zero tolerance policy within your Company. We now just have to balance that right with Illinois’ newest law.
  4. If your Company does not have a process already, institute a reasonable accommodation process and policy for employees who are medicinal users of cannabis.  While a Company is not required to keep an employee who must use marijuana while on the job or report to work under the influence, you still have obligations of going thru the ADA process with the employee to determine if you can or cannot reasonably accommodate their disability so that they may perform the essential functions of their job while not being impaired.
  5. Engage competent legal counsel to assist you in this process and in addressing difficult situations before they lead to costly and time-consuming litigation.

Also important to note: more changes are coming to Illinois for employers on January 1, 2020!  On August 9, 2019, Governor Pritzker signed Senate Bill 75 – the Workplace Transparency Act – into law.  Effective January 1, 2020, major new changes will forever alter how Illinois employers manage harassment and discrimination issues as well as other workplace controversies.  This new law requires mandatory sexual harassment training for employees; reporting and disclosure requirements; restrictions on employment agreements and several other mandates related to sexual harassment in the workplace.  Be on the look out for an upcoming blog on these details so you are prepared for the new Illinois world of dealing with sexual harassment prevention.

About the Author

Heather A. Bailey, Esq., a partner with SmithAmundsen LLC, focuses her practice on labor and employment law issues for employers for the past 18 years.  Heather may be contacted directly at: Direct Dial: 312.894.3266, Email: hbailey@salawus.com.

Illinois Employers: What You Need to Know about the New Sexual Harassment Training Requirements

Illinois is seeing some big changes to anti-harassment training requirements for employers. Governor Pritzker signed Senate Bill 75, the Workplace Transparency Act, on August 9th, 2019. This bill amends the Illinois Human Rights Act to add sexual harassment training requirements, in addition to other changes to discrimination laws in the state.

The law is still being formalized by lawmakers, but this is a major accomplishment, as Illinois hasn’t seen laws quite like this ever before. This new bill comes after the Illinois Capitol in Springfield garnered scrutiny and criticism for sexual harassment and related “pervasive behavior,” as state senator Sue Rezin told the Chicago Tribune, particularly within Democratic House Speaker Michael Madigan’s office.

The law is also a response to the entire #MeToo movement that picked up in 2017. According to a report from the National Women’s Law Center, 15 states have now passed new protections, including approximately 200 bills, which are related to protections against workplace harassment.

As these new regulations are going through the approval process, you’re now tasked as an Illinois employer with following updates and understanding what it means for the way you run your business. Here’s everything you need to know about the new requirements, some of which are still being hashed out.

Annual Training Requirement

The bill outlines that employers must give mandatory annual trainings on the following topics, beginning January 1st, 2020. The comprehensive sexual harassment training program has to include the following information:

  • Description and clarification of what sexual harassment is
  • Examples of sexual harassment conduct
  • Information about government provisions, such as what remedies are available to sexual harassment victims
  • Information about the employer’s responsibility to prevent, investigate, and correct sexual harassment

Guidelines for the Service Industry

The bill also outlines requirements for employers in the bar, restaurant, hotel, and casino sectors. Hotels and casinos must offer employees a way to alert security or managers with a portable notification device if they need help, are being harassed, or witness an instance of assault.

Bars and restaurants now must have a policy around sexual harassment that gives employees guidelines on how they can report allegations or file a charge with the state Department of Human Rights. These employers also must offer annual harassment trainings, specific to the industry, in both Spanish and English.

Other Provisions

The law also states that employers cannot require their workers to sign nondisclosure agreements or arbitration agreements that are related to harassment, discrimination, or retaliation.

In addition to protections for regular company employees, independent contractors are also protected from harassment and discrimination under the new law. As the gig economy is picking up, this is important, since companies are working with contractors and consultants more now than ever before. An NPR poll last year showed that one in five jobs in America is held by a contract worker.

The bill also sets out requirements for employers and labor organizations to disclose administrative or judicial decisions that are adverse regarding harassment or discrimination in the previous year to the Illinois Department of Human Rights. July 1st, 2020 is the first date of required disclosures, and will be required every July 1 thereafter.

What happens if you fail to comply?

The bill outlines penalties for employers that fail to comply with the new requirements. These include civil penalties of:

  • $500 if the company has less than four employees
  • $1,000 if the company has more than four employees

Repeat violations could be as much as $5,000 for each instance.

Key Takeaways

The bottom line is that Illinois may pass legislation that all employers, regardless of their number of employees, must provide sexual harassment training to each and every employee.

Key points to remember about the proposed bill are:

  • If the bill is finalized, training programs must be implemented beginning January 1st, 2020.
  • There are specific guidelines you must follow as an employer when implementing the harassment trainings, such as disclosing information about what harassment is and steps victims can take to report it.
  • Employers that are bars, restaurants, hotels, and casinos have additional guidelines to follow regarding the safety of their employees.
  • Employers cannot require workers to sign nondisclosure agreements related to harassment, discrimination, or retaliation.
  • Independent contractors are also protected under this law.
  • Penalty fees may apply if employers fail to implement the sexual harassment trainings.

Launchways is your trusted resource, always keeping you informed of upcoming changes related to compliance. Once the sexual harassment training requirements are solidified, we will offer a strategic solution to the training requirement.

How to Make Your Workplace More LGBTQ Friendly (And Why You Should)

How to Make Your Workplace More LGBTQ Friendly (And Why You Should)

The LGBTQ community has yet to have full federal protection in the workplace against discrimination. In May 2019, the House of Representatives passed the Equality Act, which bans discrimination because of an employee’s sex, sexual orientation, or gender identity, but the bill is resting with the Senate, who may decide not to pass it.

Marriage equality is now a federal law, impacting all 50 states, yet there are still 31 states without discrimination protection for this community, according to the Human Rights Campaign Foundation’s report, A Workplace Divided.

In your workplace, diversity and inclusion should be two main priorities, and adequately addressing these matters means that you are both recognizing and encouraging the LGBTQ community to feel open, safe, and normal living and working as they are.

Here are key reasons why you should take action to create a more inclusive and diverse workforce, and the ways to do it.

Impacts on the LGBTQ community when they feel excluded

It’s easy to see why LGBTQ workers would continue to feel excluded in the workplace. They often don’t feel understood or acknowledged, and they may feel like they’re not able to participate in normal discussions or activities because of the fear of being judged or stereotyped.

Many people in this community feel overly sexualized. Essentially what this means is that when it becomes known that they have a certain “nontraditional” sexual orientation, they become their sexual identity, instead of coworkers seeing them for themselves and their work capabilities.

This feeling of exclusion leads to negative feelings and even lack of productivity at work: 25% of LGBTQ workers report feeling distracted from work, as the Human Rights Campaign report shows, 17% report feeling exhausted from having to hide their sexual orientation, and 31% report feeling unhappy or depressed at work.

Why encourage openness and acceptance?

According to the aforementioned report, 46% of workers who identify as LGBTQ remain closeted, and half of those surveyed said that there aren’t any employees at their organization who are open about it.

While it’s of course not always a great idea to have everyone discuss or admit to their sexual experiences in the workplace, the reasons behind staying closeted show how fearful a non-inclusive workplace can be for this community. The top reasons that they stay closeted are:
• The potential to be stereotyped by coworkers
• To avoid making others feel uncomfortable
• To avoid losing connections or relationships
• To avoid coworkers thinking they are attracted to them because they are LGBTQ

Make sure in your efforts to encourage openness that you aren’t forcing LGBTQ workers to disclose things they aren’t comfortable with; the key is to educate staff and have serious discussions about these topics. If they aren’t talked about, LGBTQ workers will feel like they have to remain closeted. And while some topics are “supposed to be” taboo at work, like sex or politics, the truth is, many employees talk about their lives outside of work on a daily basis with their coworkers.

Why educate employees?

It’s also important to keep all employees educated about policies and aware of how best to behave in the workplace. You aren’t telling them what to believe, just how to represent the company and treat others while they’re on your watch.

Many employees may just not be aware of these issues, and so they may not even recognize that their behavior is out of line or could be offensive to their coworkers. It’s your responsibility to thus educate them so that they are more thoughtful and deliberate about how they treat certain topics and talk to each other at work.

The Workplace Divided report revealed an additional alarming statistic in this area: 1 in 5 LGBTQ workers have experienced being told by a coworker that they should dress either more feminine of masculine; only 1 in 24 non-LGBTQ workers reported this having ever happened to them. Additionally, 36% of non-LGBTQ employees said that they would feel uncomfortable if an LGBTQ coworker started talking about their dating life.

So, there is clearly still a bias in place that needs to be addressed in each and every workplace. Part of ensuring you are fostering an inclusive and diverse office is educating everyone to get them thinking about their behavior and the way they treat others.

Benefits of inclusivity for your company

Your LGBTQ workers will not be the only ones who benefit from addressing these issues. Think about the benefits your organization will also experience:
• Less discrimination lawsuits and therefore less in legal fees
• Less turnover, as 1 in 4 LGBTQ workers said they stayed in a job because the workplace was accepting of LGBTQ people
• Health insurance costs may go down because the health of all employees is given more consideration
• Partnerships could increase as your company becomes known as a socially responsible organization

Another big reason to address discrimination and encourage inclusivity and diversity in the workplace is because a more diverse office is a more profitable office. A study from Boston Consulting Group last year found that companies with above-average diversity on management teams earn 19% more in revenue than companies with below-average diversity on these teams.

Why? Because diverse teams create diverse perspectives; gone are the days of the bureaucracy, where one team of older white men makes all the decisions for an organization. For any company to grow and succeed, diversity, and therefore greater inclusivity, are assets.

Additional strategies to foster inclusivity and diversity in the workplace

So where should you begin? Try implementing these strategies to foster inclusivity and better educate the workforce about discrimination and how to create accepting, inclusive workplaces:
• Talk about how detrimental stereotyping can be, in general and also related to someone’s gender or sexuality.
• Share statistics similar to those presented in this article to show employees how important these issues really are for a functioning workplace.
• Engage with learning materials that present workplace scenarios so that employees can learn how to approach certain topics and actually visualize how to behave to encourage inclusivity.
• Always stress the importance of diversity and make sure the executive team shares with the company about efforts they are taking in these areas (for example, those in charge should admit when they become aware of areas they could improve, such as diversifying the board of directors).
• Provide resources for LGBTQ workers if they experience harassment or discrimination from coworkers, or if they just need someone to talk to, like an HR representative or counselor.
• Implement actual company policies that protect workers against discrimination and harassment in the workplace. Make sure these policies are distributed to all employees and are available for reference.

Key takeaways

• Because discrimination rights based on sexuality continue to stall on a federal level, take action in your individual workplace
• If the LGBTQ community feels excluded in the workplace, they’re more likely to leave and are more likely to feel unhappy or depressed at work
• Encourage openness and acceptance at work so that LGBTQ workers don’t feel like they have to remain closeted to be liked
• Educate employees, especially non-LGBTQ workers, so that they are aware of these issues and are better aware of how to behave
• Recognize the financial and productivity benefits that an inclusive and diverse workplace provides
• Create support systems and company policies that address these issues

When you’re able to educate and encourage, and foster diversity and inclusivity—teaching your employees what they mean, why they’re important, and how they help the entire workplace—your company culture will shift toward being more socially aware and responsible.

Updates to What Employers Can Ask about Wage History in Illinois

The Illinois Equal Pay Act of 2003 has been amended, effective September 29, 2019, with updated guidelines on what employers can and cannot base hiring decisions on. Particularly, employers cannot make hiring decisions based on salary history of candidates. So, what does this mean, exactly, and what else did the amendment change?

No More Asking About Wage or Salary History

The amendment has prohibited Illinois employers from doing the following when going through the hiring process:
• They cannot screen candidates or applicants based on their prior wage or salary history, or their current compensation. This includes benefits. They cannot require this information to be disclosed or have minimum and maximum criteria for hiring.
• They cannot request wage or salary history as a condition for employment consideration while an applicant is being interviewed.
• They cannot seek out a candidate’s wage or salary history from their current or former employers. But, if this information is a matter of public record, or if the employee is currently working for the employer in a different job, this rule does not apply.
• They cannot have an employee sign a contract that prohibits the employee from disclosing their salary, wage, benefits, or other compensation.
• They cannot discharge an employee who fails to comply with an inquiry into wage or salary history.

It’s important to note that if an employee voluntarily discloses salary or wage information during the interview or hiring process, employers are not in violation of the new law. The employer is just not allowed to consider this disclosure when making a decision about whether to hire the candidate, the salary to offer them, or future compensation.

What are employers still allowed to do?

While there are several new things that employers cannot do under the amendment, they can still engage in the following activities:
• Ask the candidate about their compensation expectations, but without trying to get any information about the candidate’s current or previous salary
• Offer information about compensation for the position the candidate is interviewing for, but without trying to solicit information about the candidate’s compensation history

Equal Pay Claim Threshold Lowered

Another change the amendment is bringing is a lowering of the threshold for establishing an equal pay claim. This means that employers who have at least four employees are prohibited from paying unequal wages to men and women if they are:
• Doing the same or substantially similar work,
• Doing jobs requiring substantially similar skills, effort, and responsibility, and
• Doing work performed under similar working conditions.

This means that it may be easier for workers to make an equal pay claim.

The numbers: What are the penalties?

Under the new law, an individual can bring a civil action related to the above matters within five years of the occurrence and recover damages incurred and special damages up to $10,000, injunctive relief, and costs and attorney’s fees. Employers are now subject to civil penalties of up to $5,000 for each violation of the new law and each employee impacted by the violation.

How to Prepare

Because there could be serious consequences if employers go over the line with trying to solicit compensation information from candidates, they should take the following steps to revamp their hiring process:
• Go over current applications and ensure there are no past or current salary- or wage-related questions.
• Implement a training process so that employees are aware of these restrictions and they are trained on how to discuss compensation during the interview process.
• Review all employee documents, such as handbooks that list policies and procedures, to make sure they don’t forbid employees from taking about compensation with other employees.

Important Key Takeaways:


• Employers cannot ask or solicit information about a candidate’s previous or current wage or salary, including benefits and other compensation.
• Employers cannot prohibit employees from discussing their compensation with other employees.
• Hiring decisions cannot be made based on salary history.
• The threshold for individuals to make an equal pay claim has been lowered, so employers need to pay more attention to how they approach compensation decisions.

High-Deductible Plans Are Better Than Ever, Thanks to New IRS Rules

Amid legislation that pushes consumerism in healthcare while putting greater burdens on healthcare consumers, employers and employees alike have turned to high-deductible health plans (HDHPs) to minimize their healthcare costs. As premiums continue to rise, these plans offer an opportunity to keep upfront costs low for companies and their employees. At the same time, the IRS permits the creation of tax-exempt health savings accounts or HSAs for people with HDHPs to cover the costs of the higher deductibles when expenses do come up.

This system works great for everyone involved – so long as people stay healthy. Which makes preventive care an integral part of any successful HDHP based healthcare strategy. By allowing patients to head off health issues before they become significant expenses, preventive care keeps everyone’s expenses down and maximizes health outcomes for the insured. Recognizing this, the IRS has allowed insurance plans to cover preventive care such as check-ups, screenings, immunizations, and tobacco cessation or weight-loss programs with a low or non-existent deductible while keeping their HDHP status.

However, the IRS has not generally extended the same low-deductible permissions to treatments for existing illnesses or conditions. Since 2004, certain on-the-spot treatments for conditions discovered during screenings (such as removing polyps discovered during colonoscopies) and medications to prevent recurrence of heart attacks or to reduce cholesterol to prevent heart disease have fallen under the umbrella of preventive care, but that’s about it.

Which means that people with chronic conditions have generally been left out. They have had to choose between paying out high-deductibles for treatments that prevent their conditions from worsening, or giving up their HSAs and adopting high-premium plans. Until now, that is.

The IRS’ New Rule

On July 17, 2019, the IRS issued Notice 2019-45, which significantly broadened the definition of preventive care to extend it to many treatments for chronic conditions. To qualify as preventive care, the treatments must be likely to prevent the worsening of a chronic condition or the development of a secondary condition which would incur greater healthcare costs. It must also meet several other criteria, which we have outlined in this handy chart for easy reference:

The Impact for Companies and Their Employees

So what does this policy change mean for employers and employees? Simply put, it provides enormous opportunities for both to take greater control over their costs, minimizing their expenses while maximizing employee health and wellness. It makes the already appealing HDHP and HSA healthcare option a win for employees who want to increase their welfare and for employers who are looking to reduce their expenses.

The expanded definition of preventive care provides a new opportunity for employers to educate their employees so that they can become more intelligent consumers amid government policies which force consumerism in the healthcare market. Employees can use HDHPs to control their costs without fear of compromising their health, especially by neglecting chronic conditions to avoid paying high deductibles. Instead, they can get the treatment that they need at low costs while keeping their tax-exempt health savings.

Key Takeaways

We’ve thrown a lot of information your way in this article, so here are some key takeaways that you should remember:

• IRS Notice 2019-45 opened up serious opportunities for employers to cut their costs and for employees to reduce their expenses and maximize their healthcare outcomes
• Chronic conditions will no longer force consumers to take on significant healthcare costs to receive the treatment they need to maintain their health and avoid future expenses
• That means that high-deductible health plans, which already provided the best solution for consumers in the current healthcare market, are now better than ever

To make the most of the rule change as an employer, you should partner with a proactive benefits broker who will help you craft a healthcare strategy which maximizes the impact for your employees while minimizing your costs. Benefits are an important tool to attract, retain, and engage the talent that you need to grow your business. The well-being of your company and its employees ultimately depends on the effectiveness of your benefits strategy. So it is more important than ever to work with the right benefits broker.

Interested in making the switch to a broker who is invested in your growth and your employees’ well-being? Start the conversation today.