At The Garden Center Group’s 2019 Fall Event, Jean Seawright of Seawright & Associates Management Consultants spoke with the attendees about her six biggest HR issues she anticipates horticulture businesses to have in 2020.
First, she covered the resurrection of the overtime rule.
Changes are happening to the “white-collar” exemptions that allow businesses to exempt certain employees from overtime. These exemptions are for employees in jobs classified as executive, administrative, professional, computer and outside sales. However, to qualify for an exemption, the employees must pass a variety of tests and meet the requirements described in the Department of Labor’s definition of each job type.
One constant in each of the exemptions is compensation level. Currently, to qualify for the exemption, an employee must be compensated at a rate of no less than $455 per week — an annual salary of $23,660. The new rule increases that level to $35,568.
The second major HR issue businesses should watch out for in 2020 is the proliferation of paid sick and parental leave. This is when an employee receives the same wages as if they worked. Currently, there is no federal sick leave law. However, 11 states and Washington, D.C. mandate paid sick leave. This is often paid through an employee-funded payroll tax.
“If you’re in one of these areas, adjust your policy accordingly,” Seawright says.
These state laws establish minimum requirements for paid sick leave, but an employer may provide sick leave through its own existing sick leave or paid time off plan. Businesses can establish different plans for different categories of workers. Each plan must satisfy the requirements of the new law.
The third issue to watch for in 2020 is salary history and criminal inquiry bans. More states and cities are legislating “ban-the-box” rules. In October, 13 states and 14 cities have a private employer criminal inquiry ban in place.
The "box" refers to the question on job applications that asks applicants whether or not they have ever been convicted of a crime. Ban-the-box laws require employers to remove this question — as well as any other queries about criminal history — from job applications.
These laws were designed to prevent discrimination against applicants with criminal records. Typically, employers are restricted from inquiring about criminal history until later in the hiring process. Some ban-the-box laws restrict how employers can use information obtained in a background check or when the checks can be done, but still, background checks are a must.
“I urge you to do [background checks] if you don’t,” Seawright says.
The fourth HR issue to watch in 2020 is the return of the Social Security no-match letter.
These letters are issued by the Social Security Administration indicating that information on a wage and tax statement (Form W-2) does not match SSA records. Horticulture businesses may remember these letters. They stopped in 2012, but the administration restarted the program in March 2019 for digital filers. In October 2019, SSA began issuing no-match letters for employers that filed paper W-2s.
While receipt of a no-match letter does not mean the employee is in the U.S. illegally and is unauthorized to work, Immigration and Customs Enforcement (ICE) routinely asks employers as part of the an I-9 audit whether they have received no-match letters. Failure to correct a discrepancy could result in violations or fines under immigration laws.
The mismatch could have nothing to do with the immigration status of the employee in question, Seawright says. Often, these no-match letters are the result of administrative or transcription errors.
“But in essence,” she says, “it puts you on notice that a person could be here illegally.”
However, employers cannot use the letter alone as the basis for taking adverse action against an employee.
The fifth HR issue to watch for in 2020 is minimum wage and market pressure. There has been a high-profile push to raise the federal minimum wage to $15/hour. This has created an expectation and prospective employees don’t care if the “industry average” is less than that. However, Seawright says that local market rates are what matter most. Employers who do not or cannot increase their wages to keep pace with local market rates will struggle to attract and retain workers.
“You’re competing with local companies,” she says. “There is a lot of pressure on small businesses to pay $15/hour. If you don’t, you’ll be considered a bad employer, not paying a living wage.”
Compensation rates do not exist in a vacuum. Companies feeling the pressure to increase starting rates for entry-level jobs must consider current workers in the same position or job family. Otherwise, they leave themselves open for morale problems, lost trust, discrimination complaints and a perception that their pay is not “fair.”
Seawright has several solutions for companies facing this pressure. First, obtain current local market compensation data from the Bureau of Labor Statistics or another reliable source. Next, adjust start rates for entry-level positions to align to market rates. Third, adjust rates of pay for current workers in the same position or job family, taking their length of service into account. She notes the importance of calling this a market adjustment and not a merit increase.
She suggests developing a formula to ensure employees with more longevity should earn more than new hires in the same job family. For example, employees with 1-2 years of experience could receive the market rate plus X%. Employees with 3-4 years of experience could earn the market rate plus Y%.
The final HR issue for companies in 2020 is the cannabis conundrum. The decriminalization and legalization of marijuana — whether medicinal or recreational — is changing the landscape for employers. Many states have strengthened workplace protections for medical marijuana users, so employers are unclear on how far they can or should go.
If your business is located where marijuana can legally be used for medical or recreational purposes, you could eliminate drug testing entirely or remove cannabis specifically from pre- or post-hire drug panels. That eliminates the risk of a discrimination or retaliation complaint but increases other risks.
Seawright recommends a balanced approach. Keep cannabis in all drug test panels. But in the event of a positive test, use the same procedure you would for other medical conditions. Require the employee to provide a doctor’s note confirming that he or she can safely perform his or her job duties and outlining any limitations. If the business would have to make accommodations, determine whether they are reasonable or would impose a hardship. If there is reasonable suspicion of impairment, you may be able to terminate the employee or take other disciplinary action.
“You have the right to take action if an employee comes to work impaired,” she says. “Train your managers to recognize signs of impairment.”