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Sunday, June 30, 2013

How To Administer Benefits to Same-Sex and Cohabitating Partners

This week the Supreme Court struck down a key provision in the Defense of Marriage Act, essentially clearing the way for same-sex marriages in states where those are allowed.  For Group Benefits Administrators in plans that only cover spouses in traditional marriages this presents a complex set of problems.

Consider for a moment that only 13 states recognize same-sex marriages while the rest do not.  Add to that some states, such as Illinois, that don't allow same-sex marriage but do recognize domestic partnerships.  If an employer covers employees in multiple states but still only covers "spouses" under the traditional definition the complexity and potential for legal challenge is huge.

Now add to that the growing phenomenon, especially among younger workers, of cohabitating opposite-sex couples with or without children.  While it may be practical administratively to draw the line at the marriage license ("we cover married couples but not unmarried ones"), the end result works against the purpose of a group benefits plan: to attract and retain good talent.  Having similarly situated employees working side-by-side but extending insurance coverage to this one, but not that one, introduces unfairness and resentment into the workplace.

There is a simple and elegant two-part solution to this problem:

1. Extend benefits to Domestic partners, married or not.
2. Use a "Declaration of Common Law Marriage" form to document eligibility for any non-married partner.

I first came across the "Declaration" form in El Paso, Texas in the 1990's. State law there requires that common law spouses and the children of common law marriages be eligible for employer benefits.  Now remember, this is Texas, not a bastion of liberal thinking and one of the more religious states in our nation.  This methodology has been in use there over 30 years and the world didn't end. You can also find a similar form on the Web commonly used in Canada.

Now I can hear the protests:

  1. "This promotes gay/lesbian/shacking-up behavior!"
  2. "This increases businesses cost of employee benefits!"
  3. "This is another step on the slipper slope!"
To this I would simply respond that those are social and religious arguments and complaints about where society is heading.  That is not the purpose of this post. If you are an HR and/or Benefits professional you have to go into the office Monday and figure out how to legally and defensibly offer benefits that attract and retain top talent.  Use what is written above to do that: I leave the rest to the politicians and culture warriors. 

Sunday, June 16, 2013

Are You Saving Enough to Retire?

I have written before on the subject of retirement savings estimates.  So many of the calculators put out by investment firms are scare tactics designed to help market their products.  Today via a New York Times article I came across the non-profit Employee Benefits Research Institute and their calculator.  I recommend it highly.  Similar instruments from investment houses tell me I have 19 - 20% of what I need for retirement already saved.  This calculator shows 47%, and this with 20 years left before my intended retirement date.

I don't recommend this calculator because it is telling me something I want to hear: I am recommending it because the organization behind it is not trying to sell us anything.  That gives it great credibility in my eyes.

Of course no calculator can take into account other non-investment events or strategies you can use to prepare.  Moving to a smaller house, moving to a smaller town with a less-expensive real estate market, inheritance from parents, appreciation of the value of your tangible assets such as your home, etc... You should consider all such options when making your plan.The main message, as in prior posts, is to clearly see your "gap" between current assets and what you'll need; then put together a practical plan to close that gap.

We will be the first generation in modern history to try and retire without a defined pension plans, as 401(k) plans did not exist before the mid 1970's and companies did not do away with their pensions in large numbers until the early 1980's.  You need to recognize the need and make a plan, but not throw up your hands and give up because some investment company calculator said you needed to save $2million in the next 20 years.

Wednesday, June 12, 2013

How to Legally Use Criminal Background Checks

This week the EEOC filed suit against Nashville's own Dollar General as well as BMW over the use of criminal background checks.  The comments I have read on-line about this move test the bounds of ignorance even for on-line comments.  What the EEOC wants employers to do is what departments I run have done for years.  It really isn't that complicated.

The EEOC is concerned with an overreach and/or misapplication of background screens to the point that they exclude non-white minorities at a disproportionate rate. This is a valid concern, as non-whites are arrested and convicted at a higher frequency than whites.  The EEOC's complaints primarily center around using arrest records rather than convictions, going back too many years, and having a blanket policy that excludes criminal histories that have no bearing on the job sought by the applicant.

In April the EEOC issued guidance on how to legally apply background checks.  In case you don't want to wade through all this I can give it to you in a few simple steps.

1.  Do not have a policy that any criminal history disqualifies a candidate.  Now before you think me permissive (that is not my reputation at all), think about this.  Some offenses are minor in nature, or completely unrelated to work performance such as offenses arising from domestic disputes.  I once had an applicant who as a 20 year old found out that her boyfriend was actually married and had not told her.  She got liquored-up and used her car to mow-down his white picket fence and mailbox so as to announce their affair to his wife.  The fence was valuable enough to be a felony destruction of property and the mailbox was, you guessed it, a federal offense.  Under many companies' policies she would have been unemployable and that is ridiculous.

2.  Set your hiring criteria as "Management Discretion." Use all information gathered to inform your discretion, but have no disqualifiers unless state law requires it (think health care and Office of Inspector General Disqualified Persons checks as such as exception).

3. Use grace and discretion.  Was the offense last year or 10 years ago?  Was the individual grown at the time, or in college or otherwise immature?  An offense committed the same number of years ago but  by a 17 year old or a 37 year old makes a difference.

4.  Consider the job.  If an Accountant has a DUI history but a desk job they are probably okay to hire. If a truck driver or Nursing Home Van Driver has the same history they should be disqualified.

5.  Give the applicant and chance to respond.  One of the EEO complaints against Dollar General was that they allegedly had an applicant disqualified because of erroneous criminal background history.  Many people have the same name, and background checks are not an exact science.  First make sure that the applicant confirms that the criminal history does indeed belong to them.  If not you can re-run the check. If they do admit that it is theirs you have taken a verification step that argues against a theory of discrimination.

My guidelines were always that theft and violence were disqualifiers unless the offense happened a very long time ago. That applied doubly for violence against women.  I could never bring myself to hire someone who was a threat to the assets or workforce.  Short of that I am open to hearing the applicant's side of the story while always mindful to protect the legitimate interests of my employer.

That is what the EEOC wants employers to do.  I have done it for years as have departments I have led.  It isn't that hard, it is perfectly legal, and it also morally the right thing to do.  A mistake made due to youth, alcohol or impetuosity should not keep good people from making a living.