Chill the champagne and practice Auld Lange Syne—it’s time to prepare for 2016.
“Already?” you whine plaintively, your mind full of fourth quarter goals. Yep. If you want to avoid the HR avalanche that 2016 is bringing, it is time to prepare now.
What is creating the avalanche? Four major changes are having a landslide impact on the workplace:
ACA (Affordable Care Act)
|If you have||And you offer health coverage, then you need to||And you do not offer health coverage, then you need to|
|< 25 Employees||File an annual return in 2016 reporting information about employees and dependents IF you have a self-insured plan design.||Consider whether the tax benefits offered to small businesses who provide health coverage are beneficial to you and whether you might want to purchase coverage through the Small Business Health Options (SHOP) program.|
|25 – 50 Employees||File an annual return in 2016 reporting information about employees and dependents IF you have a self-insured plan design.||Consider whether the tax benefits offered to small businesses who provide health coverage are beneficial to you and whether you might want to purchase coverage through the Small Business Health Options (SHOP) program.|
|> 50 Employees||File an annual return in 2016 reporting
Follow Employer Shared Responsibility provisions.
FLSA (Fair Labor Standards Act) Reform
This act is the one that determines whether an employee is or is not subject to overtime requirements. Historically, that decision has been a combination of two basic tests—a salary test and a duties test. In other words, was the person paid a minimum salary each week no matter how many hours were worked, did that salary meet the requirements of the Act, and did the person perform the appropriate type and amount of duties to be exempted from overtime requirements?
The proposed change could increase the minimum salary requirement from $455 per week to $970 per week. That increase would mean that anyone paid below that amount would be entitled to overtime—regardless of duties performed.
The comment period closed September 4, 2015, and the final changes to the FLSA will be published in 2016. We currently do not know how long employers will be given to comply; however, the financial implications are significant for employers with a concentration of employees who are currently paid on a salaried-exempt basis but make less than $970 per week.
Legalization of Same-Sex Marriage and Transgender Awareness
With the landmark Supreme Court decision on June 26, 2015, employers who had not already embraced same-sex partners in their workplace and health plan policies are now required to do so. One immediate impact is the increase in the number of qualifying events (resulting from life changes such as marriage and divorce) that employers will be required to monitor relative to health plan eligibility.
Additionally, the decision may have fueled momentum behind another movement that takes workplaces into uncharted waters – the increasing acceptance and openness of transgender individuals (think Caitlyn Jenner). This movement makes even basic workplace situations (such as availability and use of restrooms) more complex.
Acceleration of Silver Tsunami
Just as these issues are heating up in the workplace, the rate at which experienced professionals and leaders are opting for a partial or complete exit through retirement or part time work is also increasing. This topic is a column (or 20!) on its own, but it is safe to say that exiting workers will leave gaps (particularly in leadership and senior technical experience roles) that employers will have to fill creatively.
How to respond:
There are going to be substantial costs associated with each of these items and as you are planning your 2016 and 2017 budgets, consider a wide variety of possible scenarios related to each of these areas and recognize that prior workforce cost ratios in these areas may need adjusting. Also you need to be weighing the pros and cons of challenging the basic assumptions relative to benefits, compensation structures, training programs, recruiting strategies and other “tried-and-true” HR components. And finally—have patience. Patience to wait for regulations to finalize. Patience to work through new compensation plans. Patience to teach and attend an increasing number of courses on diversity and changing workforces.