HR-to-Employee Metrics
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Deciding how many HR professionals an organization needs to operate effectively is a hotly debated topic. Some organizations rely on metrics to guide them in making this decision. One of the most common metrics organizations use when deciding whether to hire HR professionals is the HR-to-employee ratio. When properly analyzed, this ratio can aid employers in meeting their HR needs and benchmarking their organizations against others. It can help employers determine not only how to fill their HR staffing needs, but also analyze how well their HR professionals are delivering on organizational goals.
This article explains the HR-to-employee ratio, how organizations can use it and what employers should consider when deciding whether to hire HR professionals.
What Is the HR-to-Employee Ratio?
The HR-to-employee ratio measures how many HR professionals there are for each employee in an organization. It’s calculated by dividing the total number of full-time HR professionals by the total number of full-time employees in an organization and then multiplying that number by 100. For example, the HR-to-employee ratio for an organization with one full-time HR professional and 73 total full-time employees would be 1.37. As the total number of employees increases, the HR-to-employee ratio usually decreases, though this varies by organization.
The HR-to-employee ratio is a useful measurement for evaluating HR departments. It can guide an organization’s decisions regarding HR staffing, including whether its HR department needs additional support, is overstaffed or can delegate or outsource certain functions. It can also help determine an organization’s HR efficiency, as a higher ratio could indicate a lower efficiency in delivering HR services.
According to Bloomberg’s HR Department Benchmarks and Analysis report, annual survey results revealed the median HR-to-employee ratio is 1.4 full-time HR professionals per 100 employees. This ratio is currently at an all-time high, as it previously peaked in 2013 at 1.3 HR professionals per 100 employees. The recent increase in the HR-to-employee ratio is primarily the result of unprecedented workforce growth and employers’ need to address the increased HR burden on their organizations.
Smaller employers (organizations with fewer than 250 employees) generally have a significantly higher HR-to-employee ratio—averaging between 1.7 and 3.4—because of the minimum number of HR professionals required to perform core HR functions, such as recruiting and benefits administration. It’s not uncommon for smaller organizations in the early stages of growth needing to focus more on people management than more established organizations, resulting in a higher ratio. As organizations grow, the HR-to-employee ratio tends to decrease because of the cost advantages employers gain by increasing the size of their organizations.
Factors Impacting the HR-to-Employee Ratio
Determining how many HR professionals an organization requires is difficult and depends on the organization’s needs and growth strategy. While the HR-to-employee ratio can guide employers as they make HR staffing decisions, there are several factors that may influence this ratio. These factors include the following:
- Technology—Automating HR operations will reduce an organization’s need for HR professionals, lowering the HR-to-employee ratio. Organizations that invest in digital and self-service HR tools can improve overall accuracy and empower managers and employees to self-manage many HR functions, which can allow HR professionals to focus on higher-value work.
- HR involvement—The role of HR can influence the HR-to-employee ratio. For example, a highly operational HR department may require more HR professionals to perform a variety of functions, such as employee training and development, recruiting, onboarding, benefits and compliance.
- Budget—A larger budget allows an organization to staff more HR personnel, while a smaller budget can restrict the total number of employees the organization is able to hire, thus impacting the HR-to-employee ratio. Increasing the size of an HR department will often result in a higher HR-to-employee ratio; however, a high-functioning HR department can ideally help reduce costs elsewhere in an organization.
- Industry—The HR-to-employee ratio generally varies by industry, as some sectors require more HR involvement than others—resulting in a higher ratio. Industries such as consulting, insurance and finance typically have higher ratios than manufacturing, construction, retail and health care because sectors with highly skilled professionals tend to require more training and personal development to engage and retain staff compared to their lower-skilled counterparts.
Other factors that may impact an organization’s HR-to-employee ratio include whether the organization is centralized or decentralized, where employees are located (e.g., a single location versus multiple locations) and the level of employee sophistication. The HR-to-employee ratio only accounts for full-time HR professionals, so there may be a gap between the metric and actual organizational needs.
Does a Smaller Organization Need HR Professionals?
Regardless of an organization’s size, HR practices and processes play a role—whether completed by an owner or a formal HR professional—in the organization’s success. Small and midsized employers tend to implement more formal HR processes as they grow. This is because their compliance needs, cultural challenges and talent struggles become increasingly complex with more employees.
Small and midsized organizations generally have the following HR needs:
- Recruiting job candidates
- Onboarding new hires
- Providing training and development opportunities
- Handling compensation
- Managing benefits
- Setting up and overseeing payroll
- Reviewing timekeeping records
- Ensuring compliance
- Fostering employee relations
- Promoting health and safety
- Boosting organizational morale
Owners and executives of smaller organizations often take on HR responsibilities themselves rather than hiring new employees. According to industry research, owners and executives of smaller organizations can spend as much as 12 hours each week on HR administration. However, as organizations grow, small and midsized employers often need HR support because executives and owners often do not feel confident managing HR functions and processes or may have other areas that require their limited time and resources. Utilizing the HR-to-employee ratio can help theses employers decide when to hire HR staff.
Before deciding to hire an HR professional or adding additional HR staff, employers need to decide where their staffing needs are the greatest and how much value HR professionals could add to their organization versus an investment in other departments. They also need to consider the skills an HR professional brings to ensure organizational needs are met.
Summary
Understanding the HR-to-employee ratio and factors that affect it can help employers evaluate the role of HR in their organizations. When making HR staffing decisions, employers should consider their organizations’ specific needs and long-term goals. Using the HR-to-employee ratio can provide employers with insights regarding HR hiring practices and improving organizational efficiencies.
For more HR-related resources, contact RISQ Consulting today.
- Published in Blog
The RISQ RECAP:
December 12th – December 16th, 2022
Each week, you’ll find specially curated news articles to keep you up to date on the ever-evolving world of insurance and risk management. The articles are divided out between items relevant to Property & Casualty, Employee Benefits/Human Resources, and Compliance. We’ve included brief summaries of each item as well as a link to the original articles.
PROPERTY & CASUALTY
State Farm Will Start Hiking Auto Rates, Allstate CEO Predicts
“Allstate’s chief executive officer said his company will likely continue pushing for auto insurance rate hikes next year, and he expects the carrier’s largest mutual competitor—State Farm—to move in the same direction. Speaking at the Goldman Sachs 2022 U.S. Financial Services Conference on Dec. 6, Thomas Wilson, president and CEO of Allstate, was asked about the competitive dynamics between publicly traded stock companies and mutuals in the auto insurance market—in particular, whether he felt that large mutuals were slower to raise prices in response to rising loss costs and inflationary pressures, giving Allstate a competitive growth advantage in 2023.” Full Article
– Insurance Journal
EMPLOYEE BENEFITS, HUMAN RESOURCES, & COMPLIANCE
The EEOC is Bulldozing Its Way Through the Construction Industry “The U.S. Equal Employment Opportunity Commission (EEOC) has a new target—the construction industry. During a public hearing earlier this year, the EEOC accused the construction industry of perpetuating a culture of racism and sexual harassment.” Full Article – Venable LLP
Employer WARN-ing: Layoffs Could Trigger WARN Notice Requirements This Time Around “Studies show that as many as 98% of CEOs are anticipating a global recession in the next 12-18 months, which means that companies have already started focusing on cutting costs and redistributing resources to best position themselves to survive.” Full Article – Baker McKenzie LLP
Work Beyond Pay Grade Can Be Grounds for Constructive Termination, Court Rules “The federal court for the Northern District of California recently declined to dismiss a former Al Jazeera International employee’s constructive wrongful termination claim against the news outlet, finding that requiring an employee to perform tasks more advanced than their pay level, without promotion, could constitute “intolerable” working conditions.” Full Article – Proskauer Rose LLP
Federal Restrictions on NDAs for #MeToo Claims Expected to Become Law “The “Speak Out Act” (H.R 8827), a #MeToo-inspired bill prohibiting pre-dispute nondisclosure and nondisparagement clauses when sexual harassment or assault is alleged, has cleared Congress. Previously, President Biden issued a statement signaling that he strongly supports the bill and will sign. The bill will become effective upon his signature.” Full Article – Davis Wright Tremaine
Juries are More Likely to Find Retaliation than Discrimination “On October 25, 2022, a federal jury in Houston awarded a woman $365,000,000 in punitive damages and over $1,000,000 in compensatory damages, after finding that her employer had terminated her in retaliation for complaining about race discrimination. While this amount may not stand after appeal, the case and the sums at issue are notable.” Full Article – Vinson & Elkins LLP
Remote Work May Be A Reasonable Accommodation Where the Employee Has Been, Well, Working Remotely “In the context of the COVID-19 pandemic, many employees suddenly began working remotely and as we move into a new normal, many employees would like to continue telecommuting. However, from a legal standpoint, employers need not agree to continued remote work unless it is required as a reasonable accommodation under the American with Disabilities Act or analogous state laws. But when can an employer argue that continued remote work is unreasonable?” Full Article – Shawe Rosenthal LLP
STATE & INTERNATIONAL COMPLIANCE
In addition to the RISQ Review, RISQ Consulting also provides a resource that features changes and updates to State and International Compliance measures. We’ve included brief summaries of each item below, and also provided links to the original articles if you’d like to read further.
CALIFORNIA
Who is A “Designated Person?” Changes to California’s Medical Leave
“The Expansion of California Family Rights Act, AB 1041, was signed into law by Governor Newsom on September 29, 2022. AB 1041 expands the class of people for whom an employee may take leave to care for under the California Family Rights Act (“CFRA”) to include a “designated person.” Full Article
– Sheppard Mullin LLP
NEW YORK
New York Bars Discipline for Legally Protected Employee Absences
“On November 21, 2022, New York Governor Kathy Hochul signed a law clarifying that it is unlawful for an employer to penalize an employee for any absence protected under federal, state or local law. (S.1958/A.8092). The law goes into effect on February 19, 2023.” Full Article
– Jackson Lewis P.C.
COLORADO
New Guidance on Bonuses and Commissions May Cause Headaches for Employers
“Organizations commonly require employees to be employed on the date a commission or bonus is paid to receive the commission or bonus. The Colorado Department of Labor and Employment (CDLE), which interprets and administers Colorado’s Wage Act, recently indicated that practice is not permissible, which means employers will need to revisit their bonus agreements and commission plans sooner rather than later.” Full Article
– Holland & Hart LLP
ILLINOIS
Illinois Appellate Court Holds Businesses Must Implement Biometric Retention and Destruction Policies Before Collecting Biometric Data
“On November 30, 2022, the Illinois Second District Appellate Court reversed the trial court’s grant of summary judgment in Defendant’s favor in a case entitled Mora v. J&M Plating, Inc.” Full Article
– Seyfarth Shaw LLP
WASHINGTON
Washington State’s Pay Transparency Law Takes Effect January 1, 2023
“SB 5761 amends Washington’s Equal Pay and Opportunity Act (RCW 49.58) to require employers with 15 or more employees to include in each job posting the wage scale or salary range of the job and a general description of all of the benefits offered and to identify other compensation offered.” Full Article
– McDermott Will & Emery LLP
- Published in Blog
The RISQ RECAP:
December 5th – December 9th, 2022
Each week, you’ll find specially curated news articles to keep you up to date on the ever-evolving world of insurance and risk management. The articles are divided out between items relevant to Property & Casualty, Employee Benefits/Human Resources, and Compliance. We’ve included brief summaries of each item as well as a link to the original articles.
PROPERTY & CASUALTY
Professional Service Firms Facing Increased Cyber Risks
“The professional services sector has seen significant growth over the past few years, spurred by globalization. However, this growth is also accompanied by increased exposure to risks, especially those of a technological nature. Beazley’s latest Cyber Services Snapshot report revealed that professional service firms are increasingly being targeted by cyberattacks.” Full Article
– Business Insurance America
EMPLOYEE BENEFITS, HUMAN RESOURCES, & COMPLIANCE
Significant Parity Cases For Benefits Lawyers to Watch “Many expect the outcomes of these lawsuits to clarify the standards for a successful parity claim and what remedies plaintiffs can seek under the Parity Act.” Full Article – Hall Benefits Law
Plan Administrators May Not Adopt Rationales for Benefit Denials Not Raised During the Claims Review Process “The Ninth Circuit confirmed that a district court must decide whether the plan administrator’s decision to deny LTD benefits is supported by the record and cannot engage in a new determination of whether the claimant is disabled.” Full Article – The Wagner Law Group
HIPAA Compliance and Tracking Technologies for Apps and Webpages “The guidance generally provides that HIPAA covered entities and business associates: May not impermissibly disclose protected health information (PHI) to tracking technology vendors (TTV). Must ensure that they disclose PHI only as expressly permitted or required by the HIPAA Privacy Rule.” Full Article – Thomson Reuters Practical Law
SCOTUS Denies Review and Leaves Seattle’s ‘Play-or Play’ Ordinance Intact “The Supreme Court declined to review whether federal law preempts a Seattle Ordinance mandating that large hotels offer their employees health insurance coverage or increased pay. This left the Ninth Circuit’s ruling, which found that the particular ordinance was not preempted, as the last word on the issue (at least for now).” Full Article – Proskauer
Health Plans and Marijuana: What to Know Now “On November 16, the U.S. Senate passed Medical Marijuana and Cannabidiol Research Act [HR 8454], which was passed by the House of Representatives in July. News reports have predicted that Biden will sign the bill. The bill doesn’t specifically address health plan coverage of medical marijuana, but the processes it sets in motion could lead to greater clarity on the issue.” Full Article – International Foundation of Employee Benefits
I Want A New Drug… Prescription Drug Data Collection Reporting is Due December 27th “The Departments will not take enforcement action against the plan sponsor if the average monthly premium paid by employers and employees (Columns E and F) is not included on the D1 for the 2020 and 2021 reporting period, as long as the information is provided for 2022 and beyond. However, no such relief exists for reporting the premium equivalent (Column I).” Full Article – Holland & Hart LLP
STATE & INTERNATIONAL COMPLIANCE
In addition to the RISQ Review, RISQ Consulting also provides a resource that features changes and updates to State and International Compliance measures. We’ve included brief summaries of each item below, and also provided links to the original articles if you’d like to read further.
WASHINGTON D.C.
D.C. Voters Pass Initiative 82– Phasing Out Tipped Minimum Wage by 2027
“On November 8, 2022, Washington D.C. voters overwhelmingly passed Initiative 82 or the “District of Columbia Tip Credit Elimination Act.” As a result, the tip credit for D.C. tipped wage workers will be gradually phased out by 2027, at which time employers must pay their tipped employees the applicable D.C. minimum wage rate and eliminate the use of any tip credit.” Full Article
– Littler Mendelson
CALIFORNIA
2023 California Minimum Wage Update
“The start of the new year will bring many changes to California’s state and local minimum wage laws. California employers would be wise to take note of the following changes—set to take effect on January 1, 2023—that will impact both non-exempt and exempt employees.” Full Article
– Davis Wright Tremaine
MISSOURI
Missouri Voters Approve Legalization of Recreational Marijuana- What Employers Need to Know
“On November 8, 2022, citizens of Missouri voted to amend the Missouri Constitution, making the cultivation, sale and use of recreational marijuana legal under certain circumstances. The approval of Amendment 3 follows the passage of Amendment 2 in 2018, legalizing the production and sale of medical marijuana throughout Missouri.” Full Article
– Worklaw Network
MASSACHUSETTS
Massachusetts Department of Family and Medical Leave Publishes 2023 Workplace Poster, Workforce Notifications and Rate Sheets
“On November 15, 2022 the Massachusetts Department of Family and Medical Leave (the “Department”) published its 2023 Paid Family and Medical Leave (“PFML”) workforce notifications, including the poster, notices, and rate sheets, all available here.” Full Article
– Morgan, Brown and Joy
ILLINOIS
Labor–Friendly “Workers’ Rights Amendment’ Passes in Illinois
“The Illinois Constitution Amendment 1 (commonly referred to as the “Workers’ Rights Amendment”) has received enough votes to secure its passage. Citizens of Illinois voted on the Amendment on November 8, 2022, but delays in tabulating the votes resulted in a formal announcement on November 16, 2022 of the Amendment’s passage.” Full Article
– Benesch, Friedlander, Coplan & Aronoff
- Published in Blog
The RISQ RECAP:
November 28th – December 2th, 2022
Each week, you’ll find specially curated news articles to keep you up to date on the ever-evolving world of insurance and risk management. The articles are divided out between items relevant to Property & Casualty, Employee Benefits/Human Resources, and Compliance. We’ve included brief summaries of each item as well as a link to the original articles.
PROPERTY & CASUALTY
Hawaii Volcano Eruption Has Some on Alert, Draws Onlookers
“The first eruption in 38 years of the world’s largest active volcano is attracting onlookers to a national park for “spectacular” views of the event, and it’s also dredging up bad memories among some Hawaii residents who have been through harrowing volcanic experiences in the past. It was just four years ago that Nicole Skilling fled her home near a community where more than 700 residences were destroyed by lava. She relocated to the South Kona area, only to find herself packing her car with food and supplies this week after Mauna Loa erupted late Sunday.” Full Article
– Insurance Journal
EMPLOYEE BENEFITS, HUMAN RESOURCES, & COMPLIANCE
Employer’s Should Note Post-Midterms State Law Changes “As the final tally of ballots comes in for many electoral races across the country, the outcomes of the various state ballot measures that were also part of the Nov. 8 midterm elections could require changes to employers’ policies and procedures.” Full Article – Jackson Lewis
The Speak Out Act–New Law Implements Limits on Confidentiality and Non-disparagement Provisions “On Nov. 16, 2022, the House passed the “Speak Out Act,” which President Biden is expected to sign into law. The Act limits the enforceability of pre-dispute nondisclosure and non-disparagement provisions relating to disputes involving sexual assault and sexual harassment.” Full Article – Kramer, Levin, Naftails & Frankel
Bankruptcy Doesn’t Shield Employees From WARN Act Layoff Notice Requirements – Unless An Exception Applies “Layoffs often accompany corporate bankruptcy, and employers should be aware of the legal obligations that impact mass layoffs and plant closures. Most notably, the federal WARN Act requires employers to notify the workforce of a mass layoff, a temporary shutdown, or a closure of all or part of a business.” Full Article – Levenfeld Pearlstein
Keeping Up Your Guard: Employee Fraud Warning Signs and Steps to Protect the Business “While hybrid working offers many recognized benefits, it has also given rise to significant ongoing challenges for businesses. One of those, which we discussed at our Hybrid Working Confidential breakfast session earlier this week, is the enhanced risk of employee fraud and data security breaches as a result of a large number of staff working from home, pursuant to their employer’s hybrid working policy.” Full Article – Fox Williams
Quiet Quitting and Today’s Workforce Challenges “The American workforce is in crisis, buffeted by one challenge after another – some recent, and some, like demographic changes, that have been building for decades. At a recent employment law seminar – our first in-person employment program since 2019 – Pierce Atwood brought together clients from health care, higher education, accounting, the nonprofit sector, and other industries to discuss both short- and long-term solutions to these challenges.” Full Article – Pierce Atwood
An Employer’s Guide to the World Cup “Although professional soccer does not drive quite the same amount of interest among the U.S. populace as, say, football (Go Ravens!) or basketball, the World Cup is still one of the major sporting events in the world – and there are likely many employees who are following it rather closely. And unlike last time in 2018, the U.S. team has qualified for the tournament, so there may be some patriotism at play here. So we thought we might offer employers some guidance on World Cup issues in the workplace.” Full Article – Shawe Rosenthal
STATE & INTERNATIONAL COMPLIANCE
In addition to the RISQ Review, RISQ Consulting also provides a resource that features changes and updates to State and International Compliance measures. We’ve included brief summaries of each item below, and also provided links to the original articles if you’d like to read further.
WASHINGTON D.C.
D.C. Voters Pass Initiative 82– Phasing Out Tipped Minimum Wage by 2027
“On November 8, 2022, Washington D.C. voters overwhelmingly passed Initiative 82 or the “District of Columbia Tip Credit Elimination Act.” As a result, the tip credit for D.C. tipped wage workers will be gradually phased out by 2027, at which time employers must pay their tipped employees the applicable D.C. minimum wage rate and eliminate the use of any tip credit.” Full Article
– Littler Mendelson
CALIFORNIA
2023 California Minimum Wage Update
“The start of the new year will bring many changes to California’s state and local minimum wage laws. California employers would be wise to take note of the following changes—set to take effect on January 1, 2023—that will impact both non-exempt and exempt employees.” Full Article
– Davis Wright Tremaine
MISSOURI
Missouri Voters Approve Legalization of Recreational Marijuana- What Employers Need to Know
“On November 8, 2022, citizens of Missouri voted to amend the Missouri Constitution, making the cultivation, sale and use of recreational marijuana legal under certain circumstances. The approval of Amendment 3 follows the passage of Amendment 2 in 2018, legalizing the production and sale of medical marijuana throughout Missouri.” Full Article
– Worklaw Network
MASSACHUSETTS
Massachusetts Department of Family and Medical Leave Publishes 2023 Workplace Poster, Workforce Notifications and Rate Sheets
“On November 15, 2022 the Massachusetts Department of Family and Medical Leave (the “Department”) published its 2023 Paid Family and Medical Leave (“PFML”) workforce notifications, including the poster, notices, and rate sheets, all available here.” Full Article
– Morgan, Brown and Joy
ILLINOIS
Labor–Friendly “Workers’ Rights Amendment’ Passes in Illinois
“The Illinois Constitution Amendment 1 (commonly referred to as the “Workers’ Rights Amendment”) has received enough votes to secure its passage. Citizens of Illinois voted on the Amendment on November 8, 2022, but delays in tabulating the votes resulted in a formal announcement on November 16, 2022 of the Amendment’s passage.” Full Article
– Benesch, Friedlander, Coplan & Aronoff
- Published in Blog
The RISQ RECAP:
November 21st – November 25th, 2022
Each week, you’ll find specially curated news articles to keep you up to date on the ever-evolving world of insurance and risk management. The articles are divided out between items relevant to Property & Casualty, Employee Benefits/Human Resources, and Compliance. We’ve included brief summaries of each item as well as a link to the original articles.
PROPERTY & CASUALTY
What is business travel insurance and why is it important?
“Most companies rely on business travels to expand their global presence, which often entails going to distant and isolated locations. But the pandemic has forever reshaped the way people travel, forcing them to consider additional factors, including airline requirements, coronavirus regulations in transit and destination countries, and arrangements for their safe return.” Full Article
– Business Insurance America
EMPLOYEE BENEFITS, HUMAN RESOURCES, & COMPLIANCE
IRS Revises October 2022 Additional Election Change Guidance to Remove Non-Calendar-Year Plan Requirement “Under the revised guidance, cafeteria plans — regardless of plan year — can be amended to allow prospective midyear election changes from family coverage to employee-only coverage (or family coverage including one or more already-covered related individuals) under a group health plan that is not a health FSA and provides minimum essential coverage if certain conditions are satisfied.” Full Article – Thomson Reuters/ EBIA
Has Your Company Decided to Self-Fund its Medical Plan? Don’t Forget Privacy, Security and Reporting Requirements “In addition to drafting a new plan document and summary plan description, negotiating contracts with a claims administrator and other vendors, and purchasing stop-loss coverage to insure against the risk of catastrophic claims, employers must address privacy and security obligations under [HIPAA] and reporting requirements under the ACA.” Full Article – Dickinson Wright
2023 Premium Tax Credit Quick Reference Chart “[1] Locate line where estimated 2023 household income & household size intersect. [2] First column shows household percentage of Federal Poverty Line. [3] Second column shows percent of household income required as contribution towards purchase of second lowest cost Silver coverage in Marketplace. [4] ‘CSR AV’ column shows resulting Actuarial Value after Cost Sharing Reductions applied. [5] ‘Monthly contribution’ = contribution percent x household income, divided by 12.” Full Article – Kaufman & Canoles , P.C.
Final Rules Issues on Private Plans Under Colorado’s Paid Family and Medical Leave Insurance Act “FAMLI creates a state-administered insurance program that will pay employees for qualifying types of leave starting January 1, 2024, much like unemployment insurance. Employers and their employees are exempt from paying premiums if the employer provides a private plan for paid family and medical leave approved by the Division. The final rules provide employers a blueprint on how to obtain approval for such plans, whether the plan is self-insured by the employer or obtained through an insurer approved by the state.” Full Article – Husch Blackwell
December 27th is Deadline for Mandatory Rx Data Collection Reporting “The employer remains liable for noncompliance, even if it has an enforceable agreement with its vendor to ensure compliance, unless the plan is fully-insured and the agreement is with the insurer. There is no way for an employer to confirm on the HIOS module that a vendor uploaded the file(s) it agreed to upload. The employer should obtain written assurance from the plan’s vendor(s) and rely on contractual provisions for recourse if a vendor fails to fulfill its RxDC reporting service as agreed.” Full Article – Jackson Lewis P.C.
Federal District Court Certifies Transgender Discrimination Class Action Against Third-Party Administrator Under the ACA “The US District Court for the Western District of Washington certified a class of individuals who were denied gender-affirming care by a third-party administrator, Blue Cross Blue Shield of Illinois (BCBSIL). The class members have been, are, or will be [1] participants in an ERISA self-funded health plan, which is both administered by BCBSIL and contains a categorical exclusion for gender-affirming care and [2] denied preauthorization or coverage for excluded gender-affirming care because of BCBSIL’s administration of the exclusion.” Full Article – ArentFox Schiff LLP
STATE & INTERNATIONAL COMPLIANCE
In addition to the RISQ Review, RISQ Consulting also provides a resource that features changes and updates to State and International Compliance measures. We’ve included brief summaries of each item below, and also provided links to the original articles if you’d like to read further.
CALIFORNIA
California Court of Appeal Reverses Summary Judgment in Time-Rounding Case Involving Electronic Timekeeping System
“In Camp v. Home Depot, a Sixth Appellate District panel recently found against an employer that—although its electronic system recorded employee work-time to the minute—rounded daily totals to the nearest quarter-hour for determining wages.” Full Article
– Davis Wright Tremaine LLP
OHIO
Rolling the dice with independent contractors – employee misclassification can prove to be a risky and expensive game of roulette when an injury occurs!
“Let’s face it –employees are expensive. Labor costs are one of the biggest costs of doing business and go beyond just wages. They also include benefits, payroll, and associated taxes.” Full Article
– Graydon, Head & Ritchey LLP
MISSOURI
Missouri’s new marijuana law: What employers need to know
“The uncertified results for the November 8, 2022 election indicates Missouri voters have passed Amendment 3, legalizing marijuana for personal use (effective December 8, 2022). Assuming the unofficial results will be certified, what does this mean for Missouri employers?” Full Article
– Thompson Coburn LLP
DISTRICT OF COLOMBIA
D.C. Voters Approve Eliminating the Tip Credit System
“On Nov. 8, 2022, Washington, D.C., voters overwhelmingly approved “initiative 82,” which, once certified and implemented, will eliminate the tip-credit system in D.C. With this new law, D.C. joins the ranks of seven states with no tip credit: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington state.” Full Article
– McGuire Woods LLP
COLORADO
Colorado’s Required Notice for Separating Employees—New Form Released
“In May 2022, Colorado passed a new law requiring employers to provide a notice to all separating employees alerting them that unemployment compensation benefits may be available.” Full Article
– Brownstein Hyatt Farber Schreck LLP
- Published in Blog
The RISQ RECAP:
November 14th – November 18th, 2022
Each week, you’ll find specially curated news articles to keep you up to date on the ever-evolving world of insurance and risk management. The articles are divided out between items relevant to Property & Casualty, Employee Benefits/Human Resources, and Compliance. We’ve included brief summaries of each item as well as a link to the original articles.
PROPERTY & CASUALTY
Counting the Rising Cost of Climate Change With Top Most Costly Natural Disasters
“Climate change has raised the cost of natural disasters, as rising sea levels and drought increase the frequency and severity of flooding and wildfires, insurers and risk modeling experts say. The list of the 10 most expensive events of the last decade provided to Reuters by risk modeling firm RMS all took place over the past five years.” Full Article
– Insurance Journal
EMPLOYEE BENEFITS, HUMAN RESOURCES, & COMPLIANCE
More Pay Reporting and Disclosure Obligations on the Horizon for Employers “The pay equity landscape continues to be a priority for the federal government, states, and local jurisdictions. The recent push toward pay transparency has led to new and complex challenges for employers.” Full Article – Jones Day
Lessons from a Staffing Misappropriation and Non-Compete Trial “Cases don’t try very often. Doubly so in trade secret/non-compete litigation. So many of these disputes get resolved at the injunctive relief phase of the proceeding that, when one goes the distance, it is almost always worth peeking under the hood.” Full Article – Seyfarth Shaw LLP
Policing Politics In The Workplace – Keeping The Peace On Election Day And Beyond “With early voting and vote by mail, methods of voting have become easier and more flexible and convenient than ever before—but policing politics in the workplace can be trickier than interpreting a hanging Chad! Here’s what employers can do to ensure that a color war of red and blue does not ensue, after navigating through the patchwork of “time off” to vote and other voting leave laws.” Full Article – Akerman LLP
How Will the Supreme Court’s Review of Two Affirmative Action Cases Affect Employers? “On October 31, 2022, the Supreme Court of the United States (SCOTUS) heard oral arguments for two controversial affirmative action cases against Harvard University and the University of North Carolina (UNC). While the legal framework for affirmative action programs and diversity, equity, & inclusion (DEI) initiatives differ across academic and employment contexts, these high-profile decisions are bound to have implications for private employers and federal contractors.” Full Article – Littler Mendelson LLP
Inconsistent Explanations Dooms Employer’s Defense Against Race Discrimination Claim “In reversing a federal trial court’s decision in favor of the employer on an employee’s reverse race discrimination claim, the U.S. Court of Appeals for the Seventh Circuit noted that the employer “told two incompatible stories about both how and why” it made the promotion decision at issue.” Full Article – Shawe Rosenthal LLP
NLRB General Counsel Proposes Crackdown on Employers Who Monitor Employees “The National Labor Relations Board may soon be coming for employers who electronically monitor their employees. On October 31, the NLRB’s General Counsel Jennifer Abruzzo, who is the chief prosecutor for the Board, gave notice that she was intent on aggressively interpreting the National Labor Relations Act to deal with what she believes are employers’ use of intrusive or abusive electronic monitoring and algorithms that might interfere with employees’ Section 7 rights.” Full Article – Constangy, Brooks, Smith & Prophete LLP
STATE & INTERNATIONAL COMPLIANCE
In addition to the RISQ Review, RISQ Consulting also provides a resource that features changes and updates to State and International Compliance measures. We’ve included brief summaries of each item below, and also provided links to the original articles if you’d like to read further.
CALIFORNIA
California Court of Appeal Reverses Summary Judgment in Time-Rounding Case Involving Electronic Timekeeping System
“In Camp v. Home Depot, a Sixth Appellate District panel recently found against an employer that—although its electronic system recorded employee work-time to the minute—rounded daily totals to the nearest quarter-hour for determining wages.” Full Article
– Davis Wright Tremaine LLP
OHIO
Rolling the dice with independent contractors – employee misclassification can prove to be a risky and expensive game of roulette when an injury occurs!
“Let’s face it –employees are expensive. Labor costs are one of the biggest costs of doing business and go beyond just wages. They also include benefits, payroll, and associated taxes.” Full Article
– Graydon, Head & Ritchey LLP
MISSOURI
Missouri’s new marijuana law: What employers need to know
“The uncertified results for the November 8, 2022 election indicates Missouri voters have passed Amendment 3, legalizing marijuana for personal use (effective December 8, 2022). Assuming the unofficial results will be certified, what does this mean for Missouri employers?” Full Article
– Thompson Coburn LLP
DISTRICT OF COLOMBIA
D.C. Voters Approve Eliminating the Tip Credit System
“On Nov. 8, 2022, Washington, D.C., voters overwhelmingly approved “initiative 82,” which, once certified and implemented, will eliminate the tip-credit system in D.C. With this new law, D.C. joins the ranks of seven states with no tip credit: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington state.” Full Article
– McGuire Woods LLP
COLORADO
Colorado’s Required Notice for Separating Employees—New Form Released
“In May 2022, Colorado passed a new law requiring employers to provide a notice to all separating employees alerting them that unemployment compensation benefits may be available.” Full Article
– Brownstein Hyatt Farber Schreck LLP
- Published in Blog
Getting Smart About Your Risk
By Joshua Weinstein, Employee Benefits President
Without risk, life would be a drab. Without the opportunity to fail, success, and even life, loses its luster and meaning. For example, if a cliff dive ensured absolutely no harm, would it be quite as thrilling or appealing? If presenting in front of others had a 100% chance of going flawlessly, what significance would your preparation and “learning from mistakes” have? Life is not defined by the easy, but rather by slogging through some suffering. That being said, humanity can generally plan toward good outcomes by acknowledging and addressing life’s unseen, “slippery banana peels” as best as possible. Risk isn’t an inherent problem. It’s not unexpected. It’s quite manageable, and it can teach all of us boatloads. The best run businesses have figured out how to manage risks so they can focus on growth and not on threats.
RISQ Consulting will help you be smart about risks through our proprietary Business HealthIQ™ (BHIQ) process. The BHIQ is a collaborative journey that assesses and inventories your organizations risks across key areas, such as: workforce, compliance, technology, employee benefits, and general risk management. You will be working with a strategic consultant, and a plan will be constructed that encompasses the goals of your organization in conjunction with the most suitable approaches to address risk wisely.
Want to learn more? Try out a mini, self guided, version of the BHIQ to see how the planning begins. You’ll get a summary in a few minutes that provides some tangible next steps on how to be strategic with your risks.
Short samples:
We can mutually decide how best to prevent the unwanted things from happening, such as high rates of employee turnover.
We can mitigate risks such as data loss and errors by advising on consolidated technology platforms and tools that are right for your industry and mission.
We might choose to transfer risks, to a third-party, when doing so adds efficiencies, reduces exposures and costs, and improves your ability to focus on your business’ core mission
Sometimes, retaining or assuming risk is the smart play, even up to a specified amount. Keeping some liability on your financials can reduce premium costs and often improves leadership involvement in creating great outcomes for your business.
- Published in Blog