Every year in the U.S., new laws related to the workforce are created and existing laws are revised. Changes to workforce legislation create considerable risk to the ongoing fiscal health of your organization and increase its exposure to potentially catastrophic lawsuits, government fines, and reputational damage. To reduce risk, every HR professional needs to quickly and accurately assess how updates to employment laws will impact the workforce and discover how their organization can best adapt policies and programs to reduce liability. But given the complex and dynamic nature of workforce legislation, how can you hope to analyze the potential effects of changes quickly enough to mitigate risk? How can you rapidly uncover the areas where your organization is most exposed and decide on the best ways to address them? In this webinar, workforce intelligence expert Dave Weisbeck will discuss risks related to three areas of workforce legislation that are undergoing rapid change: The new overtime rules from the Department of Labor that go into effect December 1 The proposed pay equity reporting requirements that could begin as early as next year Ever-changing employee classification laws that limit which employees qualify as contractors

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Reducing
Risk:
How
to
Stay
Ahead
of
Fast
Changing
Workforce
Legisla6on
Dave
Weisbeck
Chief
Strategy
Officer
Visier

6. Reducing risk: How to stay ahead of fast-­‐changing
workforce legisla8on
Dave
Weisbeck,
CSO,
Visier
September
6,
2016

7. Maximize your business outcomes,
through your people
Analyze:
Go
from
data
to
insights
Align:
Go
from
insights
to
plans
Act:
Go
from
plans
to
outcomes

8. Where are our
recrui8ng
boBlenecks?
How can we retain
cri8cal employees?
What if?
How well did we plan?
How do our total workforce
costs breakdown in our plan?
Should I give my team
member a raise?
What are our total
workforce costs and
how are they changing?
How can we connect Total
Rewards to our boBom line?
How will turnover
impact our future
workforce?
Which workforce
scenario will best
meet our
business goals
and budget?
Where should we allocate
people to support the
business?
Which Cri8cal Talent is at
risk of resigning?
Who should I promote?
Workforce Analy8cs
Workforce Planning
Visier Workforce
Intelligence
Visier is about making both HR and the business beBer

9. Visier is how the best brands
achieve the best business
outcomes

10. Agenda
• The
new
overIme
rule
• Proposed
changes
to
pay
equity
reporIng
• The
risks
of
misclassifying
employees
as
contractors
• Technology
opIons
for
reducing
risk
from
workforce
legislaIon
changes

11. Department of Labor
Over8me Rule Changes

12. The new over8me rules
$23,6
60
[VAL
UE]
Threshold
now
ASer
Dec.
1
• Exempt
salary
threshold
doubles
on
Dec.
1,
2016
• Threshold
will
be
updated
every
three
years
• Full-­‐Ime
salaried
workers
who
earn
LESS
are
eligible
for
overIme
pay

13. What the DoL recommends
In
response
to
the
new
over6me
rule,
employers
can:
ü
Pay
Ime-­‐and-­‐a-­‐half
for
overIme
work
ü
Raise
workers’
salaries
above
the
new
threshold
ü
Limit
workers’
hours
to
40
per
week
ü
Some
combinaIon
of
the
above

14. How many workers are affected?
“The
updates
will
impact
4.2
million
workers
who
will
either
gain
new
overIme
protecIons
or
get
a
raise
to
the
new
salary
threshold.”1
U.S.
Department
of
Labor
1.
Who
Benefits
from
the
OverIme
Rule,
U.S.
Department
of
Labor
Blog

15. "This phased-­‐in approach will s2ll disrupt long-­‐
term wage planning for many organiza2ons, and
future annual updates based on unknown
increases will wreak even more havoc on
compensa2on planning for large businesses."
Patrick Brady, Manager of Public Policy, WorldatWork

16. The new rule could significantly
increase costs
1,000
newly
eligible
employees
could
cost
an
addi6onal
$3.5M
per
year
*Based
on
BLS
data
1.
Average
over6me
3.2
hours
per
week
2.
#
weeks
worked
48
weeks
per
year
3.
Average
increase
in
over6me
hours
153.6
hours
per
person
per
year
4.
Max.
hourly
rate
for
eligible
employees
$913
÷
40
=
$22.80
5.
Annual
cost
per
employee
153.6
×
$22.80
=
$3,505.92
6.
Cost
for
addi6onal
1,000
newly
eligible
employees
1000
×
$3,505.92
=
$3.5M
per
year

17. How will you assess how the new rules
impact your organiza8on?
Short-­‐term
How and where
are our over8me
costs/risks
changing?
Mid-­‐term
How can we
modify our comp
strategy and
workforce plan to
op8mize costs?
Long-­‐term
How can we
prepare for
future changes?

18. What you will need to answer
• How
many
employees
are
impacted?
• Should
we
raise
salaries
to
retain
exempt
status
for
those
on
the
cusp
of
the
new
salary
level?
• Should
we
reclassify
those
who
fall
under
the
new
threshold
and
change
their
pay
structure?
• Since
bonuses
and
commissions
are
included
in
the
calculaIon
of
salary
threshold,
should
we
change
pay
structure
to
move
workers
over
the
threshold?
• Can
we
avoid
reducIons
in
force
by
allowing
natural
ahriIon
of
newly
eligible
workers
to
occur?
• How
can
we
beher
track,
report,
and
manage
overIme?

19. Proposed Changes to
Pay Equity Repor8ng

20. The U.S. Equal Pay Act
Prohibits
sex-­‐based
wage
discriminaIon
between
men
and
women
in
same
establishment
who
perform
jobs
that
require
substanIally
equal
skill,
effort
and
responsibility
under
similar
working
condiIons
Pay
differenIals
are
permihed
if
based
on
seniority,
merit,
quanIty/quality
of
producIon,
or
factor
other
than
sex
It
is
employer's
burden
to
prove
pay
differenIal
is
valid

21. Pay discrimina8on: the risk to employers
19,724
charges
under
the
Equal
Pay
Act
since
1997
About
1,000
charges
per
year
Companies
face
reputa6onal
and
financial
risk
if
charged

22. Pay equity repor8ng changes proposed
for 2017 repor8ng year
• Every
year,
employers
with
100
or
more
employees
need
to
fill
in
EEO-­‐1
form
What
EEO-­‐1
form
asks
now:
What
the
proposed
change
adds:
• Employee
numbers
by
job
category,
sex,
race,
ethnicity
• 12
pay
bands
that
workers
fall
into
• New
pay
data
would
help
enforce
federal
pay
discriminaIon
laws

23. How will you assess the poten8al impact?
To
reduce
the
risk
to
your
organiza6on’s
reputa6on,
how
can
you:
• Ensure
you
aren’t
blind-­‐sided
by
the
results
the
first
Ime
you
fill
in
the
new
report?
• ConInuously
monitor
pay
equity
to
see
where
the
greatest
risks
are?
• Discover
whether
pay
dispariIes
exist
for
valid
reasons?
• Get
insights
for
how
to
address
the
risks?

24. Employee Misclassifica8on Risks

25. The Department of Labor takes
misclassifica8on seriously
“The misclassifica8on of employees
as independent contractors presents
one of the most serious problems
facing affected workers, employers
and the en8re economy.”
Wage and Hour Division,
U.S. Department of Labor

26. For employers, the risk is high
Back
wages
collected
“Studies
suggest
that
10
to
30
percent
of
employers
may
misclassify
their
employees
as
independent
contractors.”
U.S.
Department
of
Labor
[VALUE]M
[VALUE]M
[VALUE]M
[VALUE]M
[VALUE]M
[VALUE]M
[VALUE]M
2009
2010
2011
2012
2013
2014
2015
Nearly
$1.6
billion
in
back
wages
have
been
recovered
by
the
Department
of
Labor’s
Wage
and
Hour
Division
since
2009.

27. Employment rela8onship defini8ons
may grow even more strict
“Applying
the
economic
realiIes
test
in
view
of
the
expansive
definiIon
of
‘employ’
under
the
Act,
most
workers
are
employees
under
the
FLSA.”
Administrator’s
Interpreta8on
No.
2015-­‐1,
U.S.
Department
of
Labor

28. How will you assess the poten8al impact?
To
reduce
the
risk
of
fines,
lawsuits,
or
damage
to
your
organiza6on’s
reputa6on,
how
can
you:
• Get
a
grasp
of
what
the
cost
of
reclassifying
contractors
as
employees
would
be?
• See
the
reporIng
structure
of
your
conIngent
staff
in
context
with
your
full-­‐Ime
employees?
• Get
insights
for
how
to
address
the
risks?

29. Technology choices
for staying ahead of
workforce legisla8on risks

32. TRACK
ANALYZE &
PLAN
Employees
Hours
Wages
Commissions
Gender
OverIme
Absenteeism
Who
is
exempt?
How
much
risk
do
we
face?
What
will
it
cost
us?
What
alternaIves
do
we
have?
If
it
changes,
what
then?
How
are
ahriIon,
hiring,
engagement,
etc.
impacted?

33. The Technology Choices
Business
Intelligence
Embedded
“AnalyIcs”
Workforce
Intelligence
• Tools
that
allow
you
to
create
reports
and
dashboards
on
any
data
• Repor8ng
that
comes
with
your
HRIS,
ATS,
etc.
• Dedicated
workforce
analyIcs
and
planning

34. Business Intelligence

35. Business Intelligence
• Tools
that
allow
you
to
create
reports
and
dashboards
on
any
data
• Extremely
flexible
–
you
can
build
whatever
you
want
• Extremely
difficult
and
expensive
–
requires
very
technical
and
expensive
skills
• Slow
–
you
(or
IT)
have
to
build
it
all
yourself

36. BI challenges and risks
Complex
data
integraIon
Costly
data
warehouse
Time-­‐consuming
report
development
No
integrated
security

37. BI project costs: A TCO that keeps growing

38. Embedded HR analy8cs

39. Embedded HR analy8cs
• Repor8ng
that
comes
with
your
HRIS,
ATS,
etc.
• Bundled
into
an
HR
system
promises
fast
and
cheap
• Only
reporIng
–
not
analyIcs
• Not
integrated
&
connected

40. The problem: Answers to ques8ons about
workforce risk live in disparate systems

41. Extrac8ng answers from embedded
analy8cs requires extra cost and 8me
Data
integra6on
Extra
cost
and
6me
Historical
data
Extra
cost
and
6me
Future
changes
Extra
cost
and
6me

42. Workforce intelligence

43. Workforce intelligence quickly connects disparate
workforce data sources to answer ques8ons about risk
Workforce Intelligence

44. Use workforce intelligence to help you
avoid unnecessary over8me costs
• Eliminate
guesswork
and
error-­‐prone
spreadsheets
• IdenIfy
the
best,
most
cost-­‐opImized
workforce
plan
• Track
against
that
plan;
manage
overIme
with
confidence

45. Use workforce intelligence to discover
pay equity issues and address them
• ConInuously
measure
pay
equity
• Discover
where
the
greatest
risks
are

46. Use workforce intelligence to discover
pay equity issues and address them
• Adapt
programs
and
policies
to
achieve
pay
equity
• Use
data
to
support
validity
of
apparent
pay
dispariIes
• Confirm
valid
reasons
for
pay
differenIals—such
as
longer
tenure,
more
educaIon,
or
higher
performance

47. Use workforce intelligence to get a
comprehensive view of your workforce
• Understand
costs
and
effects
of
moving
to
more
or
less
conIngent
labor
• Reduce
risk
of
non-­‐compliance
by
understanding
roles
and
reporIng
structure
for
all
full-­‐Ime
and
conIngent
workers

48. Take the next step

50. Resources available at www.visier.com
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your
copy
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your
copy
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to
the
Workforce
Intelligence
Blog

51. Thank you
Dave Weisbeck
dave.weisbeck@visier.com

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