Author: Site Staff

Companies may start defining more workers as management–and ineligible for union representation–following a National Labor Relations Board decision announced Tuesday, October 3.

In a 3-2 ruling, the NLRB held that permanent charge nurses at Oakwood Heritage Hospital in Michigan should be designated as supervisors because they assigned tasks to other nurses, were responsible for their performance and exercised independent judgment.

In two related cases, however, the board found that nurses at Golden Crest Healthcare Center and lead workers at Croft Metals Inc. did not meet the Oakwood test.

“A lot of employers may make explicit in job descriptions the duties of lead people to qualify them as supervisors within the guidelines set forth in Oakwood,” says Michael Flaherty, a partner at the law firm Jackson Lewis in Chicago.

The NLRB used the three cases to respond to a 2001 Supreme Court ruling in NLRB v. Kentucky River Community Care Inc. In that action, the high court rejected the board’s reasoning when it upheld a union request to include six registered nurses in a bargaining unit. Supervisors are not allowed to join a union under the National Labor Relations Act.

In its October 3 decision, the board sought to clarify its interpretation of the latitude an employee must be granted to qualify as management.

The NLRB said that a nurse is a supervisor if he or she can place a colleague in a certain wing of the hospital, determine the time the person must arrive, authorize overtime and compel someone to come in from off-duty hours.

In addition, a nurse is a manager if he or she is accountable for the performance of other employees, evaluates them, influences their pay and exercises independent judgment beyond routine or clerical procedures.

“Employers should be satisfied because they have more clarity in what (responsibility) to give to individuals if they wish them to be a supervisor,” says James Redeker, chair of employment services at WolfBlock, a Philadelphia law firm.

But the NLRB may not have the final word on an issue that has been litigated for more than 20 years. Labor unions are likely to appeal the ruling in a circuit court.

AFL-CIO president John Sweeney said in a statement that the NLRB decision was the latest step by the Bush administration “to deny as many workers as possible their basic right to have a voice on the job and improve their living standards through their union.”

An Economic Policy Institute study asserts that as many as 8 million American workers may lose their bargaining rights.

Cheryl Johnson, president of United American Nurses, says that 843,000 nurses could be reclassified as supervisors. She maintains that the title is inaccurate because charge nurses cannot hire, fire or discipline their colleagues.

“Do you think for a minute that hospitals would have that many supervisors?” she asked at a September discussion at the Center for American Progress in Washington, D.C. “Hospitals know the difference. Only the NLRB seems to be confused.”

The NLRB ruling might also mean that computer scientists, engineers and other skilled employees could be defined as supervisors in today’s collaborative offices.

“It’s all about pushing authority down to frontline workers,” says Sarah Fox, a lawyer and former NLRB member. “It’s all about teamwork.”

—Mark Schoeff Jr.

Employers received a wakeup call last month regarding how much they need to know about the fees being charged to participants in their 401(k) plans.

In September, the St. Louis-based law firm of Schlichter Bogard & Denton filed lawsuits against nine companies alleging that they violated pension laws by allowing their 401(k) participants to be overcharged by the managers of the plans.

The suits, which were filed in U.S. district courts in Illinois, California, Connecticut and Missouri, name Northrop Grumman, Lockheed Martin, Boeing, General Dynamics, United Technologies, Bechtel Group, Caterpillar, Excelon and International Paper as defendants.

If successful, the suits could cause employers to shy away from higher-cost investment options for their 401(k) plans, but that’s not necessarily the right course of action to take, experts say.

In some cases, a fund with a higher management fee may still be a more sound investment because it has better performance than lower-cost funds over an extended period of time,” says Michael Maryn, a partner in the Washington, D.C., office of Sonnenschein Nath & Rosenthal.

Plan sponsors need to determine whether the fees being charged are reasonable. That requires more analysis than many companies do today, says Don Stone, president of Plan Sponsor Advisors, a Chicago-based consulting firm.

“First they need to look at what other plans of their size are paying,” he says.

Record keepers and fund companies often will provide this information.

Beyond that, employers need to make sure that the costs of their 401(k)s and investment options “pass the reasonableness test,” Stone says.

“If you are paying for an actively managed fund and not getting the value of it, that’s a problem,” he says.

Determining whether fees are reasonable can be challenging, particularly with products like managed accounts, which are supposed to be customized to the needs of the investor, says Kyle Brown, a consultant at Watson Wyatt Worldwide.

Managed accounts often charge 25 basis points on top of the expenses of the underlying investments because they are customized to the needs of the investor, and thus are supposed to perform better than an average mutual fund. The providers of these options usually ask participants for information about themselves to customize the portfolio accordingly.

But what if an employer automatically enrolls employees into a managed account program–are those participants really getting all the benefits that the option is supposed to provide? Brown asks. “If the employee doesn’t fill out any forms, then the provider only knows their income, age and contribution amount,” he says. “If they don’t have more information to work off of, it might be difficult to demonstrate that the fees are reasonable.”

To address this issue, employers need to justify the decisions they make in choosing their investment options, says Martha Tejera, president of Tejera & Associates, a Bainbridge Island, Washington-based retirement consulting firm.

“If companies are choosing between providers, and one provider has higher fees, they need to ask why,” she says.

Some employers may decide to offer higher-fee investment options and just absorb the added expenses rather than pass them on to plan participants, says Maryn at Sonnenschein Nath & Rosenthal.

“Companies may reduce their fiduciary exposure by paying the expenses themselves,” he says. The result of that might be, however, that companies cut in other places, like their 401(k) match or other compensation or benefits.

No matter what happens with these lawsuits, employers should be prepared to deal with the issues involving understanding 401(k) expenses, Brown warns.

“Even if these suits don’t go through, the Department of Labor has projects in the works regarding understanding 401(k) expenses,” he says. “This is going to be an issue all employers need to pay attention to.”

—Jessica Marquez

iVantage^® Helps Engineer and Structure HR

S

aturn Electronics & Engineering, Inc. (Saturn) is a global supplier to original equipment manufacturers and their suppliers. Saturn’s highly innovative products are designed, engineered and manufactured worldwide for the automotive, appliance and communications industries. Headquartered in Auburn Hills, Michigan, Saturn operates 9 locations in Michigan, Texas, Mexico, China and Philippines. It has 1,300 full-time and 700 temporary employees.

Saturn works closely with its customers to provide integrated solutions that address complex design, engineering and manufacturing problems. Similarly, SPECTRUM has worked closely with Saturn to tailor iVantage® to meet their HR needs. “SPECTRUM does a phenomenal job supporting their clients and making them feel that they are number one. They are not happy until you are. Having worked with many SPECTRUM people over the years, they are consistently pleasant and truly dedicated to an exceptional product,” says Pam Glowacz, Saturn’s Human Resource Manager.

Interface or Integrate

Before iVantage, Saturn had an HR system through their payroll vendor. The system was never implemented because it did not transmit data over their wide area network (WAN) and it was difficult to integrate payroll and HR data. Even though they had integration issues, they initially wanted a new system that was fully integrated with one vendor.

SPECTRUM showed Saturn that it is possible to have a cohesive HR and payroll system with two different specialized vendors using an interface. Expert sourcing and best of breed are the philosophies behind interfacing an HR system with other needed applications. As a best of breed HR system vendor, SPECTRUM’s HR expertise is apparent in iVantage’s features and functionality. iVantage provides the essential tools HR departments need to track, filter and report employee data from application through retirement. It captures personal information, such as address, emergency contacts, background, and employment information, such as position, status, job history and compensation. Glowacz comments that, “iVantage is truly designed for HR professionals.”

Understanding that communication between Saturn’s HR data and payroll was imperative, SPECTRUM introduced iVantage Link™. Link impressed Saturn with its ability to take information stored within iVantage and share it with a multitude of systems — payroll, time and attendance, accounting and benefit carriers.

“iVantage Link has allowed us to streamline our processes and become the control center,” said Glowacz. She likes that all of Saturn’s employee data is housed and controlled in iVantage so that data integrity is maintained.

A Timely Installation

SPECTRUM’s Client Services team worked quickly and thoroughly with Saturn to have iVantage functional three months after the initial installation. This included the conversion of basic data, benefit plan set-up and implementing iVantage Link to communicate with Saturn’s payroll vendor. In addition, areas were tailored to meet the unique needs of their business. Five years later Glowacz remarks that iVantage is “truly the best system I have worked with, it has everything we need.”

Manager Self-Service

Since 2001, Saturn’s demands from their HR system have grown and SPECTRUM has provided the solutions. In the first half of 2006, they will implement the Manager Self-Service portion of iVantage for performance and salary review. Saturn’s current process is paper intensive and time consuming. HR sends forms and worksheets electronically to supervisors, who return hard copies of the completed paperwork. HR then keys the performance review scores and salary plans into the system. “Once Manager Self-Service is running, supervisors will key information themselves, which should be a wash on time for them. HR will benefit from the time saved by not re-keying all the data. The supervisors will also have so much more information at their fingertips,” said Glowacz.

Employee Self-Service

Looking forward, Saturn plans to add Employee Self-Service capabilities to streamline the benefit open enrollment process. Glowacz sees future opportunities with time tracking and time-off requests.

Lean Manufacturing — Lean HR

Saturn Electronics & Engineering continues to grow and adapt to the dynamic electronics, engineering and manufacturing markets. They have embraced a manufacturing concept, TPS, which simplistically means all activities add value or waste. The goal of TPS is to maximize value by eliminating waste. Glowacz feels that, “Administratively, HR has much to eliminate and iVantage, along with our partnership with SPECTRUM, will be the key to accomplishing that goal within our department.”

To learn more about SPECTRUM and how its fully functional HRIS, iVantage, can help meet your HR goals, please call 800.477.3287 or visit www.spectrumhr.com and sign-up for a free web-seminar.

Workforce Management will launch an online job board in early October that caters to the human resources market, offering news and information for recruiters and job seekers in addition to searchable help-wanted listings.

The site, which Workforce Management publisher Todd Johnson estimates will have 1,000 listings initially, will let job seekers search by title, keyword and salary range, among other criteria. Visitors will be able to navigate to the job board from Workforce.com, which already has 416,000 unique users, or go directly to it at WorkforceHRjobs.com.

The job board comes in response to consumer demand, Johnson says. In the past year, the No. 1 search term used at Workforce.com has been “jobs,” he notes, and the most frequently asked customer service questions have been about where users can post their résumés.

WorkforceHRjobs.com also reflects a trend that has emerged as the job-board market has matured. Recruiters increasingly rely on niche sites, whose listings target a specific audience. Ninety percent of the 40,000 job sites specialize in some way, estimates Peter Weddle, former CEO of Job Bank USA and publisher of a series of guides to job sites.

“Employers and hiring managers in particular are increasingly looking for specialization in individual skill sets, so job boards are becoming more niched and focusing on narrow cohorts of the workforce,” Weddle says.

Online recruitment advertising almost tripled in 2005, growing to $3.5 billion from $1.3 billion, according to Borrell Associates, a Virginia-based firm that tracks Internet advertising. Borrell attributes much of that growth to niche job boards.

There’s Dice.com, for example. The tech-focused site had 92,226 jobs posted on September 1, up from 75,097 on September 1, 2005, and 27,914 on September 1, 2003.

In its annual report on online recruitment advertising, Borrell notes that media companies have the advantage of offering access to online and offline candidates. Workforce Management will publish some job listings, particularly those for senior-level executives that are posted on WorkforceHRjobs.com.

Niche boards seem to be pleasing cost-conscious companies, too. Employers listed niche job boards as one of the top four best returns on their investment for recruitment efforts, according to a survey of 73 leading employers conducted by consulting firm Booz Allen & Hamilton for DirectEmployers Association, a consortium of more than 200 employers.

Because of its news and discussion forums, Workforce Management’s online listings will attract job hunters and passive prospects, Johnson says. “They may not be in the market right now for a job, so they wouldn’t necessarily be headed to a specific job board, but they may find something that appeals to them,” he says. “That’s really what companies are looking for: people who are happy where they are but are willing to move.”

Focusing on the human resources market allows the site to offer tools that simplify the process, such as drop-down menus of relevant certifications, Johnson says. To aid screening, employers will be able to ask applicants five questions. The site also will offer templates of typical questions for HR candidates. “All of that targeting,” Johnson says, “makes it pretty efficient in terms of information flow between the two parties.”

—Todd Henneman

The U.S. Labor Department’s top employee benefits official will leave next month to return to the private sector, the agency has announced.

Assistant Secretary of Labor Ann Combs joined the Labor Department as head of the Employee Benefits Security Administration in May 2001, making her the longest-serving head of EBSA, which regulates more than 6 million employee benefit plans covered by the Employee Retirement Income Security Act.

Combs was involved on behalf of the Bush administration in the negotiations that led to last month’s passage of comprehensive pension funding reform legislation, as well as the recovery of more than $220 million for Enron Corp. pension plan participants.

More recently, Combs guided the development of proposed regulations to help shield employers from liability for offering automatic enrollment in their 401(k) and other participant-directed defined-contribution plans.

Prior to joining the Labor Department, Combs was a vice president and chief counsel for pensions and retirement at the American Council of Life Insurers and a principal at William M. Mercer Inc.

President Bush has not announced a successor for Combs, who will depart October 27. The position is subject to Senate confirmation.

—Jerry Geisel
Geisel is a reporter for Workforce Management sister publication Business Insurance, where this article first appeared.

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