Because of the size of the business and the expense involved, it is often difficult for small businesses to offer retirement plans. Fortunately, however, pending legislation may make this process easier.
Small Businesses and Pension Plans
With the current rules for pensions and the burden imposed on small business owners, it comes as no surprise that few provide retirement plans to employees. The numbers, however, show just how widespread the problem has become:
- A survey released by in November, 2011, by Nationwide Financial, found that only 19 percent of small businesses offer any self-funded retirement plan to their employees.
- 75 percent of those surveyed felt that most Americans are not prepared financially for retirement.
- Among businesses that have seven employees or more, 37 percent of the owners stated that their employees were pressuring them for a retirement plan and 78 percent stated that a retirement plan would help bring in qualified workers.
Anne Arvia, senior vice president of retirement plans for Nationwide Financial, stated that, “Our survey found that nearly half (46 percent) of small business owners were not aware or were unsure that an employee self-funded retirement plan could be offered without having to match employee contributions.”
Change on the Horizon
Despite these currentbleak figures, Anne Arvia believes that, “The provisions in the Small Businesses Add Value for Employees (SAVE) Act before Congress will remove many of the barriers that have kept small businesses from offering their employees a retirement plan.”
The SAVE Act will encourage small business owners to work together so they can offer Multiple Small Employer Plans. This is less expensive than offering a single employer plan and administration costs are also reduced. The SAVE Act also allows for converting over to a traditional 401(k) plan as the business grows.
HR professionals in small business need to be aware of this pending legislation and how it can offer retirement security to many employees. By working together with other small business and pooling resources, small companies will have more flexibility in the type of retirement plan the offer their employees.
According to a February 2012 article in USA Today, U.S. workers in the United States are, on the whole, very concerned about their retirement prospects. In fact, workers are so worried about not having enough money in retirement that approximately 55 percent of workers indicate they would be willing to give up some portion of future increases in pay in order to instead have more guaranteed retirement income. Another 50 percent of the workers surveyed indicated they’d be willing to give up a portion of their wages in exchange for guaranteed health benefits.
These figures likely reflect the uncertainty of the stock market over the last several years, as well as fears about rising healthcare coverage and a threat of lost benefits in the future. Surprisingly, it is the younger workers who are most worried, as shown by a 70 percent increase in the number of workers under 40 who would be willing to trade pay for retirement benefits.
Considering Your Compensation Plan
The fact that so many workers place such a high premium on retirement and are so concerned about the future may be important information to have as you structure compensation packages. It may be worthwhile to look into the economics of providing workers with the opportunity for additional retirement benefits rather than pay raises over the time they work for your company.
Not only may this be a more cost effective option in certain cases, but it may also help you to retain workers over the long-haul as they value the security you provide and want to stay at the job as they get closer to the retirement age.
New 401K Plans
The Treasury Department is also considering taking steps to address the concerns of workers by making investing 401K money in an annuity a possibility. Employers need to be aware of any potential changes to the rules regarding employee 401K benefits and need to educate employees about changes that could potentially provide them with more peace of mind.
By keeping abreast of the concerns of workers and responding to address those concerns, you can help to boost employee morale, reduce turnover and attract top talent in the field. Today, those concerns are retirement concerns, and looking for ways to act to improve employee retirement security may be a wise investment of time.
The Family Medical Leave Act (FMLA) gives workers employed by covered employers the right to take up to 12 weeks of unpaid leave. As an HR professional, you know that you must grant FMLA leave in accordance with the law or be subject to penalties and possible litigation. However, FMLA leave can also cause a disruption to your workflow and create challenges in finding temporary workers and managing employees on leave.
In order to make sure that people take FMLA leave only in legitimate cases and that FMLA leave is not abused, consider the following tips:
- Establish a clear FMLA policy. Your policy should specify what 12-month time period is to be used, and should establish clear rules for intermittent leave (leave taken over time instead of in large blocks or chunks). Employees should be apprised of both the medical documentation requirements as well as of the notice requirements for taking leave.
- Document all leave carefully and track employee leave time. Employees should be asked to make clear when days off or time away from work is part of their FMLA leave, and all days off and the reasons for the leave should be carefully documented.
- Require medical certification. This ensure that employees who take leave really have a legitimate need. If you suspect that documentation is not accurate, is being falsified or submitted under fraudulent means, you may also wish to request a second or third opinion from the employee.
- Train managers about FMLA rules. Managers need to be able to spot abuses and document absences, since they are the ones interacting with employees every day. A well-trained manager can report any possible signs of FMLA problems or abuse to HR professionals early so that action can be taken quickly in the event of problems or abuse.
By following these simple tips, you can help to make sure your workplace is free from FMLA abuses and that only employees with a legitimate need take protected time off.
In today’s day and age, having a baby doesn’t have to mean giving up a career. In fact, many women have children and continue to thrive in an office environment. Unfortunately, despite the fact that working women are now a major part of the workforce, many employers still fail to provide accommodations that could make their work-life easier and that, by definition, could also help to increase employee satisfaction and productivity.
Day-Care at Work
According to the Sacramento Bee, a recent Care.com survey revealed that 58 percent of working mothers want to move up the career ladder, and an even larger percentage of the mommy population (78 percent) indicated that they enjoyed being a working mother.
Although partners and spouses help out more than ever before, with 77 percent of women indicating that their significant others assist in raising their kids, these working mothers still have to shoulder a lot of the burden of taking care of their offspring. Unfortunately, companies don’t help them to meet this burden. In fact, 73 percent of companies who employ working moms do not offer any child care benefits at all. This helps to explain why 39 percent of working mothers reported having to miss work due to a child-care issue.
As such, while 78 percent also believe that they have not been passed over due to a perceived lack of commitment due to their kids, it is still clear that there is some room for improvement when it comes to helping working moms thrive in the professional world.
This doesn’t have to mean offering on-site daycare either, although this is the dream of many moms. Your company can become a Mecca for working parents by simply taking some basic steps such as of offering flex time, flexible spending to help parents meet care costs, emergency back-up child care, or subsidized child care of some other type.
A recent Infographic published at Mindflash demonstrates a major problem at American companies: a lack of maternity leave. Based on the Infographic, the U.S. is lagging behind the majority of other countries in the benefits offered to new moms and dads. In fact, of the 190 countries surveyed, America is one of the only three that does not provide any guarantee of paid benefits to moms. Needless to say, America also doesn’t offer paid time off for new dad’s either- although 50 out of the 190 countries who responded to the survey do.
Maternity Benefits in America
New parents are guaranteed some leave if their employers are covered under the Family and Medical Leave Act (FMLA) and if the employee meets FMLA requirements such as having worked for a sufficient length of time. This means that, at a minimum, employees can take off up to 12 weeks for the birth of a baby without risk of losing their jobs. However, the FMLA only applies to private employers with 50 or more employees, meaning that other companies aren’t obligated to provide benefits at all. FMLA leave is also unpaid so many parents cannot afford to take it.
Despite the fact that you aren’t required to offer paid maternity leave, providing only the minimum FMLA leave (or no leave at all) may not be in the best interests of your employees or your company. Offering no paid leave can be a major disservice to mothers, not only by making it more difficult for them to balance work and family but also by increasing the likelihood of postpartum depression according to data collected by the National Bureau of Economic Research. Failing to offer paid benefits to moms can also affect your ability to hire and retain female workers who may be concerned with the lack of options available to them if they have a baby.
Mindflash also argues that there are other benefits to companies for offering paid maternity leaves to moms, besides just improving employee well-being and making it easier for women to stay on the career track after having kids. Among the benefits they cite is the fact that offering leave allows you to get a better idea of how competent other workers are.
According to data provided on the infographic by Mindflash, only 16 percent of companies in the U.S. offer paid maternity leave. By offering such leave, you can become more competitive in hiring and you can help employees to be happier and healthier- and thus more loyal and productive to your company. This can have a major payoff in the end as you enjoy less turnover and more dedicated and effective workers.
If your company administers a 401K account, it is important to be aware of changes going into effect in 2012. Compliance with the new requirements set in place by the U.S. Department of Labor will officially required beginning begin on April 1, 2012. Different requirements are phased in, with the second change required to occur no later than May 12, 2012.
The purpose of the new disclosure requirements is to ensure that participants in a 401K plan are fully aware of all investment fees. As such, the requirements center around increasing awareness.
Under the new requirements:
- Providers must supply a service agreement fully disclosing all fees to employers. Employers who sponsor the plan have a fiduciary duty to exercise due diligence investigate fees for reasonableness.
- Providers must fully disclose on an investor’s quarterly statement any explicit fees paid by that investor
- Providers must highlight all fees associated with the account in an annual disclosure.
The first requirement regarding that goes into effect in April 2012 is the requirement that plan sponsors are provided with the service agreement. It is not until May 31, 2012 that the first set of fees must be disclosed to participants.
For many employers and employees, this will be the first time that plan participants are actually informed of the fees associated with their accounts. As an HR Professional, it is important to ensure you comply with these new Department of Labor requirements and that you are prepared to answer any questions employees have once they are provided with the new information.
During economic slowdowns and times of economic uncertainty,tensions can run high at businesses. As an employer, you may be reluctant tobring on new employees or offer bonuses, while your employees may feel tenseand nervous about losing their jobs. Amid this climate, it is important to findways to engage and inspire employees, especially if you can’t offer them araise. ABC News San Francisco has recently addressed some unique ways in whichBay Area companies are solving this problem and helping employees stay happywith innovative employee perks.
Innovative EmployeePerks and Employee Satisfaction
Some examples of the types of unique employee perksmentioned by ABC news include:
- Bring your dog to work day, which allows you to bring yourfurry family member into the office with you. Many companies have embraced thisidea, at least in part because employees are able to work longer hours andfocus more on work when they aren’t worried about getting home to their dogs orwhat a bored, lonely dog is doing to their house.
- Free meals are another perk, and one company- Zynga- alsooffers blue bottle coffee drips and free breakfast, lunch and dinner. Theirmeal plan is overseen by a culinary officer who believes food is integral tocompany success, especially since employees don’t have to leave the building toeat and can eat together.
- Hiring housekeepers for employees. One company, Akraya,hired cleaners for 31 staff members so they could be more productive at work.
These are just a few examples of some of the perks offeredto employees that can help make them feel engaged and appreciated. Otheroptions include a gym or personal trainer on site, incentives for purchasingfuel-efficient vehicles, or on-sight chiropractic care and haircuts.
In all of these examples, the key is finding a simple way togive back, make an employees life easier and make the employee feel like the companycares.