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Time to Really ‘Check Out!’

VacationNow that we are well into summer, many of us are lounging at the swimming pool, barbecuing, golfing, enjoying activities at the lake, attending garage sales, and numerous other outdoor activities.

But have you thought about really taking a vacation?

I know this question may sound a bit unusual, especially at the height of summertime. But below the surface, this question might have some validity. EVERYBODY takes a vacation from work, right? Well, apparently not.

According to a recent study by Accountemps, a staffing firm, who surveyed more than 1,000 U.S. workers, about one-third of surveyed professionals report they don’t have enough vacation time. Another 41 percent say they are not taking advantage of the paid time off that they have available at work – partly due to fear of the workload they will have when returning from vacation. Finally, 35 percent said they took fewer or no days off because others would need to handle their workload – maybe due to peer pressure or guilt.

For those who did get away on vacation, 41 percent admitted they checked in with the office at least once a week. Smartphones and other convenient electronic devices are wonderful tools to have, but they also serve as a reminder to access work emails and documents while on vacation. The Eagles rock band put it quite succinctly in their 1976 hit ‘Hotel California’: “You can check out anytime you like, but you can never leave!” Forty years later, we seem to be caught in the same quandary when we try to ‘check out’ and really ‘leave’ (relax).

Another report indicates that Americans forfeit over $61 billion annually to unused vacation time. In 2015 alone, 55 percent of Americans did not use their vacation allowance, which is the first time the majority of workers ignored time away from work. Americans left 658 million vacation days on the table, with about a third of this number (222 million days) not allowed to be rolled into the following year, or paid out or banked. This inactivity adversely affects the economy due to the ripple-effect of people not traveling, etc.

In our 2014 Iowa Employer Benefits Study©, 80 percent of Iowa employers with traditional leave programs offer paid vacation, while 88 percent of employers who offer Paid Time Off (PTO) programs include vacation as a paid benefit. Clearly, a vast majority of Iowa employers believe that vacation is important for employees to relax and return to work with renewed energy. Iowa employees we surveyed in 2007 reported that vacation is the second most important benefit to have at the workplace (only after Retirement).

To help avoid employee burnout, managers can demonstrate to others by actually taking vacations and checking in with the office less frequently. This can serve as a model to other employees, managers and colleagues to do the same and not feel guilty when taking time away from work. When doing this, employees will know that they can truly ‘check out’ from their professional responsibilities and temporarily ‘leave’ that work behind them.

Vacation is all about giving employees that “Peaceful Easy Feeling!”

To stay abreast of employee benefits and other tangential issues, we invite you to subscribe to this blog.

2016 Iowa Employer Benefits Study has Begun!

18th Annual StudyAnd, we’re off…

The 18th annual Iowa Employer Benefits Study© survey process has begun!

Our research partner, Data Point Research, recently began the process of contacting randomly-selected Iowa employers to become survey participants. Our desired goal this year is to survey 1,000 employers, which means that we will have surveyed over 13,000 Iowa organizations since 1999!

If your organization has been invited to participate in this year’s survey, I highly encourage and appreciate your involvement. By completing this survey and once our stats are tallied and released in early fall, you will receive a unique link via email allowing you to download a complementary electronic summary of the survey results – a $300 value!

Each year at this time, Iowa employers look forward to being selected to participate in this trustworthy and credible resource on employee benefits offered within our state. Many thanks in advance to those organizations who participate in our annual survey. Without your assistance, our survey would not be possible.

Please know that our firm is Rated A+ by the Better Business Bureau. Should you have any questions about the 2016 survey, or are unsure whether or not your organization has been selected to participate, please contact me directly.

To stay abreast of employee benefits and healthcare issues, we invite you to subscribe to our blog.

Overtime Pay Regulation Can Impact Employee Benefits

Cat and Mouse GameSir Isaac Newton’s third law of motion may apply to the latest final rule issued on May 18 by the Department of Labor (DOL) regarding overtime pay. The rule will significantly alter employee pay structures, which will consequently push employers to evaluate their ‘total awards’ approach to the workplace. Newton’s third law is simply:

For every action, there is an equal and opposite reaction.

This third law can also be analogous to a ‘cat and mouse game,’ whereby, the ‘cat,’ in this case, the DOL, is attempting to secure a definitive victory over the ‘mouse,’ played routinely (and reluctantly) by employers, both small and large. As the game is generally told, the cat attempts to catch the mouse, while the mouse runs away to avoid capture (and become a meal!). The mouse is usually unable to defeat the cat, but is able to find ways to ‘survive’ and live for another day. In fact, in most cases, the contest is never-ending – and often futile for both. Most everyone will acknowledge this game is a huge drain on energy and resources for both players. Nonetheless, the game is played.

The DOL’s intent to raise workers’ earnings will assuredly cause many employers to react differently than intended by the DOL. One logical ‘survival’ method for employers is to lower base salaries to help offset the potential cost of having to pay overtime to certain employees. Another reaction is to reclassify salaried workers to become hourly, or preclude newly nonexempt salaried employees from working over 40 hours per week to avoid paying overtime. The compensation system for white-collar employees may require a complete overhaul, with employees having to learn to record their time. Employers, like mice, look to find survival methods to escape the next regulatory ‘pounce.’

Are employee benefits immune from this new regulation? We are too early in the game to know for sure. However, we can surmise that previously-exempt employees who are converted to nonexempt status may possibly lose additional benefits that are only reserved for exempt employees. Eligibility for benefits such as medical, dental and vision, which typically flow through a Section 125 cafeteria plan, would most likely not affect employees who are nonexempt (hourly) or exempt (salaried), due largely to nondiscrimination rules. Qualified retirement plans also have stringent nondiscrimination testing requirements.

With other benefit offerings, however, it may get very interesting. Some organizations offer additional benefits to salaried and exempt employees, such as richer paid-time-off (PTO) days, including vacation. Under this scenario, it may be advisable to offer paid leave components on the basis of tenure and job level – rather than using exempt and nonexempt status. Seeking legal council is advisable.

As we have observed through our annual Iowa Employer Benefits Study©, certain budget-challenged industries (e.g. construction, hospitality and retail, etc.) may likely offer employer-paid group life and disability coverages only to salaried employees. Employees that lose salaried status could very well lose eligibility for these types of benefits. Another possibility is that such benefits may no longer be employer-paid, but rather, become completely voluntary benefits (employee pays all).

Similar to the mouse, employers must find new approaches to comply with the game dictated by the cat. Balancing the cost component of pay and benefits against reduced morale and high turnover is very delicate, and making this new transition will require newly-considered approaches with a different mindset.

What is your culture and how can it be leveraged in the future? In addition to avoiding the cat, watch out for any traps around the corner!

To stay abreast of employee benefits and other tangential issues, we invite you to subscribe to this blog.