The SESCO Report – April 2015
U.S. Department of Labor Publishes Enforcement Statistics
The Wage and Hour Division has published their enforcement statistics for FY 2014. As one can imagine, 2014 was again a "banner" year for the Wage-Hour Division in terms of back wages collected. Key statistics for review are as follows:
All Acts: WHD Enforcement Statistics
Back Wages: $240,831,606
Employees Receiving Back Wages: 270,570
Complaints Registered: 22,557
Enforcement Hours: 1,188,531
Average Days to Resolve Complaint: 18
Concluded Cases: 29,483
Violation Cases: 11,042
Back Wages: $36,732,407
% of FLSA Back Wages: 21%
Violation Cases: 11,238
Back Wages: $136,239,001
% of FLSA Back Wages: 79%
Low-Wage Industries Statistics
Back Wages: $4,502,976
Back Wages: $1,875,156
Back Wages: $34,451,990
Back Wages: $3,095,832
Back Wages: $5,659,936
Back Wages: $17,703,092
Hotels and Motels
Back Wages: $4,040,376
Back Wages: $3,902,434
Back Wages: $3,915,498
Total Low-Wage Industries
Back Wages: $79,147,290
Family Enforcement Statistics
• Number of Complaint Cases: 1,502
• Refusal to GrantFMLA Leave: 299
• Refusal to Restore to Equivalent Position: 176
• Termination: 634
• Failure to Maintain Health Benefits: 26
• Discrimination: 367
As we have reported, Wage-Hour liability/back wages collected continues to be the number one financial employment law violation affecting employers in all professions and industries. EEOC/discrimination fines and settlements come in second.
Regarding the Wage and Hour Division's enforcement efforts, the DOL website proudly articulates the following: "The Wage and Hour Division takes a vigorous, strategic approach to enforcement. We focus our efforts on those industries where the evidence shows violation rates are high and we find vulnerable low wage workers who are often reluctant to assert their rights and raise their voices."
"These efforts succeed and WHD sees results everyday — 1.5 million workers helped by Wage and Hour since 2009, $1.3 billion in back wages recovered for workers by WHD since 2009." They further state in bold print, "Putting wages into the hard working hands of those who have earned them..." The website appears to be not a factual and informative website, but a marketing/promotional website.
Additional Wage and Hour statistics include:
• 23% increase in agency-initiated investigations (random/industry targeted investigations)
• 20% increase in establishments found in violation
• 78% violation rate in agency-initiated investigations. Note: This is up from 65% in FY 2009.
Industries that have been targeted as noted by the Department of Labor include:
• Restaurant/Fast Food
• Grocery/Convenience Stores
• Maintenance to include janitorial, landscaping and groundskeeper
• Financial Institutions
• Automotive Repair/Automotive Retail Sales including truck and agricultural equipment
If your organization is not included in one of the above identified targeted industries, the liability is still high in that most all investigations, over 75%, are complaint driven via employee complaints to the DOL.
SESCO staff recommendations to avoid significant back wage liability as well as time, consulting and/or legal costs are as follows:
Be proactive, be aware of your compliance posture and potential liability.
Do not rely on employment liability insurance; most all insurance policies do not cover Wage and Hour/FLSA liability.
Conduct an annual audit of all positions to determine their exempt/nonexempt status.
Compliance is attainable and affordable, and there are optional pay plans that are available.
SESCO retainer/service agreement clients receive an annual compliance audit. If you are a current SESCO client and wish to schedule an audit, please contact our corporate office at 423-764-4127. If you are not a current retainer client, please contact us and we will provide options to establish a relationship.
Note: SESCO was founded in 1945 by an ex-Department of Labor, Wage and Hour Investigator, Dr. J.W.R. Lawson, Sr. As such, our heritage in understanding, complying with and representing clients before the Department of Labor is extensive and nationally-recognized.
2015 OFCCP Auditing Plans (Affirmative Action Program Compliance)
Another agency that is extremely aggressive in their auditing practices is the Office of Federal Contract Compliance Program. With the significant regulatory changes in OFCCP/Affirmative Action Program Compliance in 2014, it is no surprise that 2015 is already proven to be a "banner" year for the OFCCP. These new regulatory changes include:
• Protected Veteran (PV)
• Individuals With Disabilities (IWD)
Both of these are new regulations as of 2014 and must be addressed in plan year 2015.
In addition, federal contractors/sub-contractors who must comply with Affirmative Action Program requirements must expect the concept of "steering" during audits as a focus of the OFCCP. The OFCCP defines steering as an organization placing applicants or employees in certain groupings, which results in common areas of concentration of minorities and women to certain jobs. In essence, the OFCCP is looking to challenge organizations who have hired certain groups of employees such as men, for select positions.
Another emerging OFCCP audit trend is the evaluation of outreach efforts made to minority, female, PV and IWD sources. Previously, the OFCCP simply requested proof of job postings — meaning a copy or email of confirmation that open jobs were posted online to various outreach sites. Now the OFCCP is requiring contractors to show how they are actually tracking these good-faith efforts and evaluating their effectiveness. This adds a tremendous layer of responsibility and compliance to federal contractors.
Federal contractors must also track activities such as job fairs, onsite recruitment events and outreach letters. These employers must track the source of such sites, the date attended and evaluate each of the activities to include noting how many individuals applied, or interviewed, the attendance of the event, etc.
Finally, there is new increased scrutiny of contractors' compensation. Under the new auditing process, contractors are required to submit a roster of their workforce as of the date of the Affirmative Action Program, which includes each employee's actual total compensation earned in the 12 months prior to the AAP roster date. This shift to a focus on individual compensation requires a significant amount of work for contractors as they are also required to submit additional compensation categories such as bonuses, commissions, locality pay and merit increases.
Because of the aggressive nature of the OFCCP and a potential loss of federal or subcontract work, it behooves all of those who are required to complete and maintain an Affirmative Action Program to ensure compliance. We at SESCO are extremely proud of our track record in developing Affirmative Action Programs and especially the fact that 100% of our Affirmative Action Plans have passed the scrutiny of OFCCP audits.
For those current clients who utilize SESCO for developing their Affirmative Action Program, we will ensure that your plan complies with these new regulations and we will also provide recommendations to address outreach assessments and compensation submittal practices.
For those who are not utilizing SESCO, we certainly welcome the opportunity to provide a competitive quotation.
New SESCO Client Communications Program
In addition to The SESCO Report and email blasts regarding important federal employment law changes, SESCO has implemented a weekly client update. This client update focuses on specific state law updates, results of federal and state investigations and industry news. If you are not receiving these weekly updates, simply call SESCO and provide to us the email(s) that should receiving these updates. Additionally, any feedback for improving our client communications is always appreciated.
SESCO Product of the Month — DiSC Personal Profile
The DiSC Personal Profile presents a plan to help you understand self and others in a specific environment. You are the central focus as you heighten understanding of your behavioral profile and identify the environment most conducive to your success. At the same time, you learn about the differences of others and the environment they require for maximum productivity and teamwork in the organization.
Based on the conclusion that the most effective people are those who know themselves, recognize the demands of the situation, and adapt strategies to meet those needs. The Personal Profile enables you to identify your behavioral profile; capitalize on your behavioral strengths; increase your appreciation of different profiles; and, anticipate and minimize potential conflicts with others.
Estimated completion time for the DiSC instrument is 10 minutes. The assessment is comprised of descriptive words in which you select which are most and least like you in a particular environment.
To request a DiSC Profile, simply e-mail to SESCO the first and last name of the person who will be completing the assessment along with the e-mail address you would like the access link sent. You may either choose to have the link e-mailed to the candidate's personal e-mail address or to your company e-mail address for them to complete at your location.
Once the DiSC is completed, SESCO will e-mail the report to you or the person you designate to receive. We do not e-mail reports to the candidates unless you specifically request us to do so.
• General Characteristics — $55.00 per profile
• General Characteristics with Sales focus — $65.00 per profile
• General Characteristics with Management focus — $65.00 per profile
• General Characteristics with Sales and Management focuses — $75.00 per profile
Special Thanks to New SESCO Clients!
Farris Motor Company
Jefferson City, TN
Dempster Tire Pros
Kelly Auto Group, Inc.
Bluepoint Medical Associates
The Urology Clinic
Johnson City, TN
Royal Brass and Hose
Fred Jenkins Funeral Home
Dent K. Burk Associates, P.C.
Thrive At Home
Bluefield Transport, LLC
SESCO Client Feedback
"We have several new leadership team members so the DiSC training was very relevant. Joel is always helpful, responsive and knowledgeable. I have a high opinion of SESCO. They are a strong HR partner for me and our organization." ~ Karen Freeman, Director of Human Resources — Birmingham Green
"Joel was very easy to work with and very accommodating. My overall opinion of SESCO is excellent." ~ Carolyn Ferrell, Human Resources Director — The Robinette Company
"All the information was extremely informative. Jamie did an excellent job in describing the process as well as outcome. Jamie is outstanding and we all enjoy working with her. We look forward to future opportunities. SESCO is a great company! But like any company, it is only as great as the staff. Jamie is A+!" ~ Rene Cabral-Daniels, CEO — Community Care Network of Virginia
SESCO Client Inquiry — Staff Response
Question: When do the information reporting requirements of the Affordable Care Act go into effect?
Answer: The information reporting requirements under section 6056 are first effective for coverage offered (or not offered) in 2015.
An Applicable Large Employer member must file information returns with the IRS and furnish statements to employees beginning in 2016, to report information about its offers of health coverage to its full-time employees for calendar year 2015.