Hot Topics in Total Rewards

May 27, 2020  Posted by Dominique Fluker

It’s no surprise that COVID-19 has altered the way we work and interact with each other in and outside of the workplace. Many organizations have shifted to remote work for safety reasons. Still, as we journey deeper into being sheltered in place, many employees are wondering when we’ll be returning to the workplace. Due to COVID-19, several companies like Twitter and Facebook recently made the tough decision to transition their organizations to remote work permanently, adapting the work from home model. 

“There’s no one-size-fits-all model for employers preparing to re-open their offices. While many workers are eager to return to the office, employers considering re-opening offices should clearly communicate that the workplace is going to look very different and keep employees informed on what that means for them. Now more than ever, employers must closely monitor local guidelines and listen to their employees to ensure they are meeting the needs of the people that fuel their business.” – Glassdoor Chief People Officer, Carina Cortez

A new survey from Glassdoor conducted by The Harris Poll revealed that 45% of employees expect to return to their company’s office this summer, and nearly 3 in 4 employees are eager to return.

The new survey found that of U.S. employees who are exclusively working from home due to COVID-19:

Employees Are Ready to Get Back to the Office

Eagerness to Return: 72% say they are eager to return to their company’s office, and among those:

• • Men (79%) are more likely than women (61%) to say they are eager to return to their company’s office.
  • Nearly half (45%) expect to return to working in their company’s office in some capacity in Summer 2020.

Top Factors: Socializing with coworkers (52%) and in-person work collaboration (46%) top the list of reasons employees are eager to return to their office.

Trust in Sr. Leaders: 83% trust their company’s senior leaders to make an informed decision about when to re-open their office.

Employees’ Expectations for Health and Safety at Work

U.S. employees who are exclusively working from home due to COVID-19 expect their employer to do the following when their company’s office re-opens:

• • More than 3 in 4 (79%) expect their employer to provide disinfectant/hand sanitizer.
  • Over half (54%) expect their employer to mandate employees to wear masks/gloves in the office.
  • 45% expect their employer to space out workstations at least six feetfrom other co-workers.
  • 38% expect their employer to check employees’ temperatures upon arriving at work.

COVID-19’s Impact on the Future of Work

More Flexible Work Options: 65% would work from home full-time after COVID-19 restrictions are lifted if given the option.

Consider Remote Openings: 60% would be more likely to apply to a position that is entirely remote if they were looking for a new job.

This survey was conducted online within the United States by The Harris Poll on behalf of Glassdoor from April 29 – May 1, 2020, among 1,188 U.S. employed adults ages 18 and older, 472 of whom are exclusively working from home due to COVID-19 and were surveyed on their expectations for re-entering the workplace amid COVID-19.

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Source: Glassdoor

https://www.glassdoor.com/blog/new-survey-return-to-the-office/

Lisa Burden | May 29, 2020

Dive Brief:

• An employee's "unabated absenteeism" rendered her unqualified for her job and Americans with Disabilities Act (ADA) protections, the 7th U.S. Circuit Court of Appeals ruled (Moens v. City of Chicago, No. 19-1913 (7th Cir. May 19, 2020)).
• The city of Chicago granted Elizabeth Moens schedule adjustments to accommodate impairments, but she continued to miss work, according to court documents; Moens was absent 50 times in one year. She was suspended twice and eventually fired. She sued, alleging, among other things, that the employer failed to accommodate her, in violation of the ADA. The employer argued that Moens' absenteeism rendered her unqualified for her job — a prerequisite for ADA coverage. A federal district court agreed, noting that an employee whose disability prevents her from coming to work regularly cannot perform the essential functions of her job. 
• On appeal, the 7th Circuit agreed, stating that "[a]fter the City offered Moens numerous accommodations — including extended leave, a shortened workday, and delayed start times — she still missed work hours over 50 times in her last year at the City. With that record of unabated absenteeism, a reasonable jury could not conclude that Moens was a qualified individual with a disability."

Dive Insight:

The ADA protects applicants and workers with disabilities who, "with or without reasonable accommodation, can perform the essential functions" of the job, the Moens court noted. While the ADA requires that employers accommodate workers with disabilities, essential functions don’t have to be removed.

The question of whether in-person attendance is an essential function of a job can differ depending on the job and many courts have answered this question in fact-specific ways. The 9th Circuit held that regular attendance can be an essential function for supervisors. The 8th Circuit decided that a worker at an Iowa meat and processing facility who was absent 195 days was not qualified for ADA protection. And the 6th Circuit ruled last year that an employee who was absent nearly 60% of the time was unqualified under ADA and that allowing her to arrive late or leave early would not have "come close to solving her attendance problem."

Of course, full-time attendance isn’t always required; the 6th Circuit ruled that full-time presence might not be essential for an HR generalist, for example.

Courts often examine job descriptions to determine the essential functions of a job, if they are up-to-date and accurately reflect an employee's duties. According to guidance from the U.S. Equal Employment Opportunity Commission (EEOC), "a written job description prepared before advertising or interviewing for a job will be considered by EEOC as evidence of essential functions."

Because courts often rely on employer determinations of essential functions, written, up-to-date job descriptions that spell out what is essential and what is not essential can be important in litigation. Experts recommend that HR conduct job description reviews at the same time as annual performance reviews and have employees sign off on them at that time.

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Source: HR Dive

https://www.hrdive.com/news/employees-unabated-absenteeism-ruled-out-ada-protection/578680/

By: Kathryn Mayer | May 26, 2020

Many of the rewards are a way to thank employees—and keep them working—during the COVID-19 outbreak.

The majority of retailers are turning to bonuses, more pay and enhanced benefits to keep employees working during the coronavirus, according to new data.

A new survey of more than 50 major U.S. retailers by consulting firm Korn Ferry finds that 43% of essential retailer respondents to its May 6 survey say they have increased hourly pay, while 17% say they are offering a bonus to be paid into the future, and 22% say they are offering both increased hourly pay and a bonus. Only 17% say they are not offering premium pay, or “hero pay.” The largest percentage (43%) say they are paying store employees an extra $2 an hour on average.

Meanwhile, a third (33%) of essential retailers say they are also offering additional paid time off to store workers, 14% are offering an increased employee discount and 5% are offering increased overtime pay.

One reason employers are turning to these rewards is due to “recognizing that these employees were being asked to work in the public while much of the rest of America was asked to stay at home to limit their risk of catching the virus,” says Craig Rowley, senior client partner and retail expert at Korn Ferry.

Additionally, he says, most retailers have provided furloughed employees with health insurance and some paid the premiums. “This was recognizing that employees need healthcare more than ever during this pandemic and companies didn’t want employees to forgo it due to cost,” he says.

Korn Ferry’s research is backed up by a number of recent employer moves.

Last week, Walmart said it will hand out another round of cash bonuses to thank its employees for working during the coronavirus pandemic. The retailer says it will pay a bonus of $300 to full-time hourly associates and $150 to part-time hourly and temporary associates—totaling more than $390 million. Rewards will be given to hourly associates in stores, clubs, supply chain and offices, and drivers and assistant managers in stores and clubs. This will be the company’s second cash bonus in response to the coronavirus pandemic. In early April, it handed out the same amount—$300 for full-time hourly associates and $150 for part-time hourly associates, amounting to $365 million.

McDonald’s also said it’s awarding bonuses to every worker at its company-owned stores—equivalent to 10% of the workers’ pay earned in May. Other retailers, including Kroger, Levi Strauss & Co. and Target, have expanded paid leave benefits for workers.

Korn Ferry’s report follows another report by Willis Towers Watson, which also looked at the benefits changes employers at large are making in response to the pandemic. Nearly half of employers surveyed by Willis Towers Watson say they’re enhancing healthcare benefits and broadening wellbeing programs as a result of the current environment. More yet are turning to leave programs and other offerings as employees report significant challenges during the pandemic.

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Source: Human Resource Executive

https://hrexecutive.com/retailers-turn-to-bonuses-benefits-to-aid-workers-during-pandemic/

Nico Grant and Ian King, Bloomberg News | May 21, 2020

Dell Technologies Inc. has suspended some employee benefits, signaling that the computer hardware giant is cutting costs to contend with the weakening global economy.

The company will discontinue contributions to employees’ 401(k) retirement plans under a matching program, beginning June 1 and continuing at least until the end of the fiscal year, Dell Chief Operating Officer Jeff Clarke wrote to employees in a recent memo, citing the contracting economy and estimates of shrinking spending on information technology.

Dell has also frozen external hiring, internal promotions and raises for the rest of the fiscal year, a person familiar with the matter said. The company suspended an incentive program with so-called “inspire points,” which let employees translate commendations from managers and colleagues into prizes that included gift cards, grills and toys, said the person, who was not authorized to speak publicly. Dell hasn’t yet conducted mass layoffs or cut the salaries of rank-and-file employees.

“While it’s difficult to predict the shape of the slowdown and a recovery, our job is to prudently manage our business so that we’re in a strong position on the other side of this situation,” Clarke wrote in the memo. “Given the economic uncertainty that continues, we’ve made another tough decision to maintain the strength of our team and future of our company.”

Round Rock, Texas-based Dell has 165,000 employees around the world. The maker of personal computers, servers and software entered the COVID-19 pandemic with some existing challenges, including falling demand for data-center hardware, computer component shortages and a massive pile of debt stemming from its acquisition of EMC Corp. Chief Executive Officer Michael Dell has agreed to take a pay cut during the coronavirus crisis, temporarily forgoing most of his salary as a gesture of solidarity with his employees.

“Like all companies right now, we’re constantly evaluating our business to plan for resiliency in the current environment and to support our team members, customers, and community in a way that sets us all up for success on the other side of this pandemic,” a Dell spokesman wrote in an emailed statement.

Dell hasn’t reported results since February, so it’s unclear how high a toll the pandemic has taken on the hardware maker. Software maker VMware Inc., which Dell owns more than 80 per cent of, also reportedly cut salaries, executive pay and 401(k) matches in response to the faltering global economy.

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Sounrce: Bloomberg News

https://www.bnnbloomberg.ca/dell-slashes-employee-benefits-to-preserve-cash-during-pandemic-1.1439564

AUTHOR: Katie Clarey | PUBLISHED May 21, 2020

Dive Brief:

• The Sherwin-Williams Company will pay $3,650,000 to settle claims brought by its managers and associates that it failed to pay proper overtime and provide all meal periods, among other violations of California law (Anderson v. The Sherwin-Williams Company No. 5:17-cv-02459 (C.D. Calif. May 12, 2020)).
• Workers’ allegations also included claims that the paint store failed to authorize, permit and compensate all rest periods, and that it failed to fully reimburse work expenses.
• The settlement class includes about 5,700 Sherwin-Williams workers, court documents stated. The company did not respond to request for comment by publication time.

Dive Insight:

Sherwin-Williams workers brought their claims under California law, but the federal Fair Labor Standards Act (FLSA) is often invoked for these types of allegations, which are common and frequently result in large settlements like this one.

Meal breaks have been responsible for many wage and hour-related claims, especially when they involve automatic deductions. Workers at an Alabama nursing home, for example, filed suit alleging their employer automatically deducted 30-minute meal breaks from their pay without ensuring they stopped working during that time.

The FLSA does not expressly prohibit such deductions, but it does require employers to pay employees for all hours worked and to keep accurate records of the hours worked. "While auto-deducting meal breaks is not a per se violation of the Fair Labor Standards Act (FLSA), employers could face exposure to 'off the clock' wage and hour lawsuits if employees are actually working during meal breaks and not being paid," Freeborn & Peters Partner Erin McAdams Franzblau previously told HR Dive. "Auto-deducting meal breaks can also expose employers to claims that they are skirting the overtime wage requirements of state and federal law."

Alleged overtime violations make up another source of claims invoking the FLSA. The law obligates employers to pay non-exempt workers time and one-half for all hours worked beyond 40 in a workweek. Steak 'n Shake paid more than $7.7 million to workers it misclassified as managers and denied overtime pay.

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Source: HR Dive

https://www.hrdive.com/news/sherwin-williams-wage-and-hour-claims/578368/

Ben Penn, Reporter | May 20, 2020, 6:03 AM

• DOL final rule clarifies fluctuating workweek method
• Use of alternate overtime method projected to rise

The Labor Department has finalized a regulation to give employers more flexibility and legal clarity by allowing them to incorporate bonuses when using an alternate overtime pay calculation for workers with irregular schedules.

When it takes effect in 60 days, the final rule will give companies more protection from wage lawsuits, but it also could lead employers to abuse their newfound regulatory freedom by reducing salaries—a concern worker advocates have raised. The DOL framed the regulation, which revives a George W. Bush administration initiative that was quashed by the Obama DOL, as a “final rule to expand American workers’ access to bonuses.”

The rule updates “fluctuating workweek” overtime calculations, an option available for employers under the Fair Labor Standards Act. The method allows businesses to pay certain workers whose hours vary widely each week at half their regular rate, instead of at one-and-a-half times, for any hours worked over 40 each week.

The rule states that bonuses, premium payments, hazard pay, and other incentives are compatible with the regular-rate calculation, rescinding language from the Obama-era rule.

That 2011 regulation blocked employers from including bonuses and other forms of premium payments when calculating the regular hourly rate of pay, which is then cut in half for overtime calculations. The Obama rule was meant to stop employers from reducing salaries by shifting large portions of compensation models to reflect performance and other incentives.

Sparking a Trend?

The fluctuating method isn’t utilized often, but the new rule could lead more companies to consider adopting it as a way to control payroll costs for workers whose hours vary significantly from week to week, while paying them on a partially incentive-based structure.

Fearing a lawsuit, some employers have played it safe by not using the fluctuating workweek method at all, or using it without including bonuses, management attorneys have said.

The rule, after being proposed last year, was the subject of critical comments from Democratic state attorneys general, the National Employment Law Project, and the plaintiffs’ bar. The criticism echoed the Obama DOL’s justification in 2011 for killing the Bush initiative, which had been proposed in 2008.

“The proposed regulation could have had the unintended effect of permitting employers to pay a greatly reduced fixed salary and shift a large portion of employees’ compensation into bonus and premium payments, potentially resulting in wide disparities in employees’ weekly pay depending on the particular hours worked,” the Obama DOL said in justifying the 2011 decision not to finalize the proposal.

That 2008 version was issued too late in Bush’s second term for the administration to complete it. While the Trump administration’s effort also comes in an election year, it stands a greater chance of longevity because it’s finalized and scheduled to take effect in July. That would make it tougher and more time-consuming for a potential new president to reverse course next year.

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Source: Bloomberg Law

https://news.bloomberglaw.com/daily-labor-report/new-fluctuating-overtime-rule-shields-employers-from-litigation

Caroline Humer, Timothy Aeppel | MAY 15, 2020 / 4:21 AM

NEW YORK (Reuters) - U.S. employers have cooled to the idea of testing workers for possible immunity to the coronavirus as they prepare to reopen factories and other workplaces.

Blood tests that check for antibodies to the new coronavirus have been touted by governments and some disease experts as a way to identify people who are less likely to fall ill or infect others. Italian automaker Ferrari NV has made antibody testing central to its “Back on Track” project to restarting factories.

But many U.S. companies are not planning to use them, relying on face masks, temperature checks, social distancing, and diagnostic tests for those with symptoms, employers and healthcare experts told Reuters.

Mercer, which advises companies on healthcare benefits, has surveyed more than 700 U.S. employers in industries from high tech to retail to energy, and found 8% of companies said they would include antibody tests in plans to screen employees.

Interest in antibody tests from employers has fallen in recent weeks as reports have suggested that it is too early to conclude that antibodies to the new coronavirus translate into immunity. The American Medical Association cautioned on Thursday that these tests do not determine an individual’s immunity.

“Many employers ... are realizing that antibody testing isn’t going to be a silver bullet and really isn’t going to bring them any value,” said David Zieg, a lead consultant on clinical services at Mercer.

Other employers worry about their liability if they administer and interpret such tests, or are concerned about test costs and availability. Some were spooked by a flood of tests that hit the market before being reviewed by regulators for accuracy, which has contributed to confusion over results.

A new antibody test from Roche Holding AG that has shown itself to be highly accurate could potentially help answer questions about antibodies and immunity and change corporate demand, but it has not done so yet, consultants and companies said. 

Governments, however, are interested in antibody tests, particularly if they are accurate. Britain on Thursday said it is in talks with Roche over buying tests that it could use to create a certificate of immunity once there is a better understanding of the science.

Collective Health, a healthcare technology company that has built back-to-work strategies for large companies, is advising employers to use diagnostic tests, not antibody tests.

“There has been a proliferation of low-quality antibody tests and the antibody tests themselves don’t necessarily answer any questions about immunity,” said Rajaie Batniji, Collective Health’s chief health officer.

GETTING BACK TO WORK

When General Motors Co, Ford Motor Co and Fiat Chrysler Automobiles NV reopen production next week, they intend to offer diagnostic tests to workers, not antibody tests. Officials at the Detroit carmakers said it was because it was not clear what the antibody tests show.

Amazon.com Inc’s on-site testing plan, now in development, does not include antibody testing. Those views were echoed in interviews with a handful of smaller U.S. manufacturers.

Shawn Kitchell, chief executive of Florida-based plastics manufacturer Madico Inc, is not planning to use antibody tests for his 250 employees. He questions their costs, accuracy, and the fact that the timing of tests can lead to different results, requiring multiple tries.

“How frequently would we need to test to make it safer for our co-workers?” Kitchell said.

Employers are also wary of an unregulated U.S. market for antibody tests. Since March, the U.S. Food and Drug Administration (FDA) has allowed more than 200 tests into the market without regulatory review to make them available quickly, opening the door to questionable vendors and inaccurate tests, Reuters found.

Last week, the agency set a deadline for all vendors to prove to the FDA that their tests work or remove them from the market. It has also authorized two highly-accurate tests from Roche and Abbott Laboratories, which are able to supply millions of tests per week.

One of the biggest U.S. testing providers, LabCorp, on Thursday said it was rolling out a program to make diagnostic tests and antibody tests available at workplaces.

LabCorp’s chief medical officer, Brian Caveney, said interest in antibody testing is coming from companies in coronavirus hotspots, such as New York, while other areas with fewer COVID-19 cases see diagnostic testing as more important.

As the new FDA process shows which tests work and which don’t, that will help advance research on how many people recovering from COVID-19 develop antibodies and at what level, and show if they are truly immune to infection, said Howard Koh, a professor at the Harvard T.H. Chan School of Public Health.

“Until we go through those steps, I don’t see how we can translate this for the typical person who wants to go back to work,” Koh said.

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Source: Reuters

https://www.reuters.com/article/us-health-coronavirus-employers-testing/u-s-employers-wary-of-coronavirus-immunity-tests-as-they-move-to-reopen-idUSKBN22R1O9

• by Mary Driscoll and Michael D. Watkins | May 18, 2020

Imagine that you have a new supply-chain leader starting next week. You hired her to do supply-chain transformation before the crisis took hold. But now she is joining remotely and inheriting a remote team, and her short-term, urgent priorities are very different from what they appeared to be before the pandemic. As her manager, how can you make her onboarding experience a productive one? What can you do to support her so that she’ll hit the ground running?

Earlier this month we polled leaders about their companies’ current onboarding practices. Of the 125 who responded, 75% said that their organizations were still onboarding leaders, albeit many (45%) at a lower rate than before the crisis. However, only 17% indicated that their organizations had developed systems for onboarding new leaders into remote-work environments. That’s a big gap, given that most onboarding is happening virtually now and that the stakes in quickly getting new talent up to speed have rarely been higher.

The good news is that it’s quite possible to onboard new leaders effectively into a remote-working environment. The biggest barrier is probably mindset. We are all being tested to adapt to new ways of working, and it’s no different with virtual onboarding. Here are some principles to guide you.

1. Be crystal clear about short-term objectives.

Like every leader in transition, your new hire needs to quickly figure out how to create value, and that’s even more important during a crisis. If you hired someone specifically to help with crisis management — for example, with workforce downsizing — their role and goals should be clear from the outset. But if you hired someone before the crisis, as in the case of the new supply-chain leader, they need to understand their role at a greatly accelerated pace. Continuing the example, you should clearly outline what aspects of the original supply-chain transformation role still are a priority and what has changed because of the need to deal with immediate disruptions — ideally before the new leader starts.

2. Provide a structured learning process.

To accelerate learning in a virtual context, you need to provide information in a more structured manner. Doing so requires paying much more attention to what you include in the upfront “document dump”: organizational charts, financial reports, strategy and project documentation, and the current crisis response plan. In a recent Savannah Group study of 200 senior interim executives, 95% said access to that information made them more effective in their first few weeks, especially if the organization asked them ahead of time what would be most valuable. Beyond that, you need to help your new hires get a broader and deeper view of the organization and their role in it. For the new supply-chain leader, you could schedule virtual briefings on critical issues related to the existing system and associated challenges along with ones on culture, planning, and decision-making processes.

3. Build a (more) robust stakeholder engagement plan.

Your next priority is to help your new hires identify, understand, and build relationships with key stakeholders. When onboarding is virtual, it’s essential to be even more detailed and structured here, too. Start by building a consensus internally about who the new leader’s key stakeholders are and, critically, the order in which the new leader should meet them; these things are often not apparent to new hires themselves. For the new supply-chain leader, there may be people one level down in finance and operations whose support will be crucial. Once you have identified the key stakeholders, reach out and align them on the objectives you have set for your new leader; that will maximize the value of their meetings.

4. Assign a virtual-onboarding buddy.

Quite a few companies built buddy systems into their pre-crisis onboarding processes (Microsoft is one example). And for new managers coming into remote-working organizations, a buddy is essential. Good buddies play four key roles: (1) They help orient new hires to the business and its context (2) They facilitate connections to people whose support is necessary or helpful (3) They assist with navigation of processes and systems, and (4) They accelerate acculturation by providing insight into “how things get done here.” Of course, you must take care to choose buddies who have the time, ability, and inclination to help, and you need to brief them on how they can be of most assistance. Typically, they should not be in the new leader’s chain of command; they should be peers or others with the “big picture” understanding necessary to be of real help. For the new supply-chain leader, a peer in operations could be a good choice.

5. Facilitate virtual team-building.

Helpful in face-to-face situations, a new-leader assimilation process is essential when onboarding happens remotely. This is a structured process for creating alignment and connection between a leader and their inherited team. A facilitator asks the leader and team members questions to uncover what they would most like to share with and learn about one another. The facilitator summarizes the resulting insights and uses them to guide a conversation between the leader and the team. The good news is that this process can be done effectively through video conferencing.

6. Consider hiring a coach.

Well before the crisis, research had established that transition-acceleration coaching halves the time required for new executives to become fully effective in their roles. Given that you, your team, and your new leader’s team are all dealing with the stresses of responding to the crisis, transition coaches can be especially impactful now. They are particularly helpful when they understand the organization, the company culture, and the stakeholder environment. Buddies and coaches play complementary roles in advising new leaders on the challenges they are facing and providing a safe space within which to discuss them.

As you apply these guidelines, keep in mind that effective virtual onboarding doesn’t just mean helping external hires. Employees making internal moves at a remote-working organization can face challenges that are as tough as — if not tougher than —  those confronted by new leaders coming from the outside. And in the midst of a crisis, it’s just as important to get them up to speed fast. So you should use the same approach to accelerate every new leader joining your team.

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Source: Harvard Business Review

https://hbr.org/2020/05/onboarding-a-new-leader-remotely?utm_medium=email&utm_source=newsletter_daily&utm_campaign=dailyalert_not_activesubs&referral=00563&deliveryName=DM80802

Patrick Temple-West | 17 May 2020

Like most high street retailers, UK jewellers H Samuel and Ernest Jones have been hammered by the coronavirus. Amid slumping sales, Signet, which owns the UK store chains as well as US counterpart Kay, has halved salaries and delayed handing out shares to top executives.

Meanwhile Alan Joyce, chief executive of Australian airline Qantas, will not take a salary this year, while Philip Jansen, head of BT — who has himself recovered from coronavirus — has said that half his annual salary would go to the UK’s NHS.

But fortunes are notably different at big pharmaceutical and healthcare companies that continue to pay executives millions of dollars. Boston biotech firm Moderna, which is working on a vaccine for Covid-19, paid its chief medical officer Tal Zaks a $1m retention bonus in March.

The dichotomy underscores the consequences of the pandemic for corporate leaders accustomed to multimillion-dollar pay packages. The remuneration of executives leading healthcare, biotech and life sciences businesses has mostly been maintained, while some peers in hospitality, travel and discretionary consumer products such as jewellery have seen cuts.

The sacrifice may also be limited for those executives taking pay cuts in gestures of solidarity with employees. Many companies had already awarded shares and bonuses to executives in January and February, before the pandemic set in.

In a US survey conducted from March 27 to April 7, Semler Brossy Consulting Group found that 84 per cent of businesses have taken no action on executive pay. Two-thirds of companies had already made equity grants to executives this year and 94 per cent do not plan on making changes to these awards, it reported.

Equity is usually a bigger portion of total compensation than cash salaries, says Amit Batish, a manager at Equilar, a remuneration data provider that has tracked the impact of coronavirus on executive pay.

“[Equity is] what makes executives their big bucks,” he says, adding that those remuneration packages may now be under review. For example, Equilar found that amusement park company Six Flags is determining new performance goals for bonuses that are usually paid at the beginning of a new year. With its rollercoasters parked and concerts silenced, Six Flags has cut workers’ pay by 25 per cent.

Companies that have taken government bailouts, notably in the airline industry, have been forced to slash executive pay. Budget carrier Southwest Airlines has indicated that it will limit executive pay until March 2022. Businesses that used the US government’s pay cheque protection programme are unable to cut pay for workers making under $100,000. MannKind Corporation, a California-based biopharmaceutical company that received government aid, has said it will reduce salaries only for employees making more than $100,000.

Other company executives have responded with their own pay cuts to avoid embarrassing headlines.

“There is a big reputational risk if you are furloughing people or making drastic salary cuts to rank-and-file workers and the executives are getting big pay packages,” points out Alexandra Denniston, a partner at law firm Goodwin Procter in Boston.

Reputational worry over pay stems back to the 2008-2009 financial crisis, when insurer AIG paid $165m in bonuses to executives after losses that forced a $170bn taxpayer-funded rescue. The bonuses infuriated members of Congress and the House of Representatives in March 2009 raced to pass a bill to impose a 90 per cent tax on bonuses to employees of bailed-out businesses whose gross income exceeded $250,000.

The legislation ultimately failed to advance but the 2010 Dodd-Frank Act Wall Street reforms imposed several executive pay requirements. These included a mandate that companies disclose the ratio between a chief executive’s pay and the median annual total compensation for all employees.

Some business leaders are acting now in an attempt to ward off bad publicity. Chief executives at companies that may need to reduce headcount or employees’ pay, “are going to the board or the compensation committee saying ‘cut my pay’,” says Lynda Galligan, a Silicon Valley-based partner at Goodwin Procter.

But those cuts are in pay. Executives are not handing back bonuses paid earlier this year for their work in 2019, says Marc Hodak, a partner at Farient Advisors, an executive remuneration consulting firm.

“No, we are not seeing many executives — I don’t know of any — saying ‘I got this award in February I am going to give back some of it now’. That is not happening,” he adds.

The next pay decision for companies is what to do about bonuses for 2020. Equity bonuses scheduled to be paid in early 2021 are still in flux. Most companies “are waiting to see what happens. A lot of people are bracing themselves for bonuses being pretty poor or possibly nonexistent” for early 2021, says Mr Hodak. “A lot of the boards are saying ‘let’s just see what it looks like’.”

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Source: The Financial Times 

https://www.ft.com/content/b8a29cfc-8ac1-11ea-a109-483c62d17528

Benefits providers report surge of requests for caregiving services

By Stephen Miller, CEBS | May 13, 2020

In 2019, more employers began offering caregiving benefits and resources to help employees take care of young children, elderly parents, ailing spouses or partners, or friends. Now the COVID-19 pandemic is showing the vital role these benefits can play in employees' lives, which may push employers that haven't offered caregiving services to consider doing so.

"To safely reopen the country, healthy people need to be able to go to work, and sick people need to be able to stay home," wrote Melinda Gates, co-chair of the Bill & Melinda Gates Foundation. "We know that will require scaling up testing and contact tracing. We overlook that it will require scaling up caregiving solutions, too."

She added, "It's also hard to get back to work when you're responsible for children or older adults but have nowhere to turn for safe, affordable care."

Employers Step Up

"The challenges for employee caregivers have increased exponentially as a result of the risk for COVID-19 among older and vulnerable people, social distancing requirements, and 24/7 child care responsibilities," said Candice Sherman, CEO of the Northeast Business Group on Health (NEBGH), an employer-led coalition. "Employers are trying to increase support for caregiving employees by providing more backup help, flexible working hours and access to expert resources, and some are providing relief funds to help with expenses."

In late 2019 and early 2020, NEBGH and AARP surveyed benefit managers at 119 mostly large U.S. employers. The survey, a follow-up to one conducted in 2017, found that more employers now provide paid leave specifically for caregiving—23 percent of respondents do so, up from 11 percent in 2017.

But while 61 percent of benefit managers said caregiving is a top priority for them, and 45 percent believe they are on par with similar organizations in developing caregiving-friendly benefits, almost a quarter (22 percent) see themselves as below or well below average, "a clear sign there is much room for improvement," Sherman said. 

Employees Seek Help

As employees continue to deal with the challenges of COVID-19, whether they're still at home or returning to the worksite, "employers may want to consider offering benefits tailored to employees who are providing care for their loved ones" if they are not already addressing these needs, said Kathy Barber, vice president for benefits and compensation at Saratoga Springs, N.Y.-based Ayco, a provider of financial well-being programs.

"The coronavirus has compelled some organizations to implement relevant crisis plans, but having [caregiving] offerings in place from the get-go is also important," Barber said. Doing so "sends the message that a company is taking into account the stressful circumstances its employees might be facing in their personal lives."

Adam Goldberg, founder and CEO at Boston-based Torchlight, a caregiver-benefits digital platform company, noted, "With the vast majority of Americans staying at home during the pandemic, many are not only struggling with health concerns and high stress, they are also grappling with elder care concerns, distance learning, working at home, sudden job losses/furloughs, and the death of loved ones." Torchlight has posted the free Caregiving in Times of Crisis Toolkit, with advice and information for businesses and caregivers.

Given the coronavirus crisis, it's no surprise that providers of caregiving benefits have seen a drastic uptick in service requests since the pandemic hit the U.S. in March. "During normal periods, we generally see a wide range of requests, from help with hospital bills for older adults to navigating the proper care services for children with atypical development," said Lindsay Jurist-Rosner, founder and CEO of Wellthy, a New York City-based provider of employee caregiver support services. "But in recent weeks, we've seen a dramatic shift in the priorities and needs of families."

These are the most common needs for which families have been seeking help:

• Securing home delivery for medications and groceries.
  

• Arranging telehealth appointments.
  

• Finding mental health resources for heightened anxiety.
  

• Keeping aging family members safe and helping them stay engaged while in isolation.

The biggest changes in families' needs during the pandemic, Jurist-Rosner noted, include the need for support as part of COVID-19 recovery. "We're seeing some challenges with limited rehab options and skilled nursing facilities not accepting new patients," she said. The firm has increasingly been asked to give assistance with making funeral arrangements, as well.

The Dependent Care FSA Option

Shadiah Sigala, CEO and co-founder of Kinside, a child care benefits provider in Los Angeles, encouraged employers to provide—and fund—dependent care flexible spending accounts (FSAs). Generally, the IRS limits pretax contributions (from employer and employee combined) to $5,000 per year.

"Between pay cuts and furloughs, many parents will need more affordable care" when they return to work, she wrote in a recent Employee Benefit Adviser commentary.

Additionally, parents may need to hire at-home caregivers, as many day care centers have gone out of business because of financial losses related to the pandemic. (Sigala expects a 20 percent decline in total available spots when the economy reopens.)

Funding dependent care FSAs "is an investment in your company's reboot," she wrote. "You need people working, and you want to make sure the expense of child care doesn't get in the way of that."

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Source: Society for Human Resource Management (SHRM)

https://www.shrm.org/ResourcesAndTools/hr-topics/benefits/Pages/coronavirus-pandemic-reveals-the-value-of-caregiving-benefits.aspx