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                     ...from the HR Perspective
New MFYCO
Human Resource Update

April 2016 


Where Are They?

At a meeting of company presidents and other upper management I recently attended, several discussion topics regarding overall business operations were floated. One interesting topic was "name the three biggest challenges you face in the next three years". Surprisingly, many mentioned the need to find capable recruits.
 
Now "capable" is one of those words like the infamous "what the meaning of 'is' is". It can have different meanings depending not only on context but on the view of the speaker. In this venue it had a few meanings. At first, the frequent attributes mentioned were what you might expect: proper education, experience, computer skills, and training. But after a while more interesting qualities came to the fore: work ethic, presentation, manners, interpersonal skills, desire, and an entrepreneurial drive. It was generally agreed that these qualities were not only as important as the initial attributes, but might just be more important. 
 
When developing a recruiting piece, it is easy to outline what I will call the "hard skills" or the first attributes on which the executives focused. Those are also the easiest ones to grade when culling a pile of resumes. The second set of qualities discussed, what I will call "personal skills" are harder to describe in a recruiting piece. They can be just as difficult to measure as they are to describe. Of course, a resume populated with college clubs or sports played might help, but what about the applicant who had to work to get him/herself through college and had no time for such activities? Could that person be the better choice? How do you measure these? A personal interview will help, but will it tell the whole story?

An interesting aside here, while all understood that there are many individuals looking for positions, finding those the executives want to hire is still difficult. Someone, not from this group, had told me that it was hard to find capable people, and hard to find reliable people, but nearly impossible to find those who are both capable and reliable.
 
The conversation took a bend and touched on ways to try out candidates before the actual hiring decision was made. You have to remember that these were presidents and other very senior executives and not directly involved with HR. Developing a good intern program with duties and responsibilities similar to those which an actual new employee was one answer. Peer interviews was another idea. Interviews by department heads other than the one the prospect would work for was another. Hiring a person for a period of six months was another idea (similar to a probationary period but potentially without the same difficulty of separation if things don't work out). Having dinner with the prospect or having the prospect attend a social function were two more.
 
Once these ideas and others had been discussed, one of the executives got to the core of the topic: Let's assume we can measure all of these things. Where do we find these recruits? A general feeling of anguish permeated the room as the majority of the executives felt that colleges do not teach or promote these personal skills. It was also felt that the graduates themselves seem to devalue the personal skills that companies value.
 
Concluding the meeting, overall it was felt that doing the best that can be done to find capable recruits is the first part of the answer - and the second part is developing a corporate culture that highlights and demonstrably appreciates the personal skills so needed for a company's future. People tend to become like others around them. Developing this culture may be the key!
 
We would be pleased to help you tweak your corporate culture, let us know if we may offer assistance.
    
Sincerely,   
    
Michael F. Yates
President 
 

If you find value in this newsletter please let us know. Feel free to call me with a comment and/or ask a question at any time (908-689-4200) or send me an email (myates@mfyco.com). We offer this timely information as another benefit of your relationship with our company. If you feel a friend or colleague would benefit from receiving our newsletter, please feel free to forward a copy. 


You can view all of our newsletters by clicking the 'newsletter archives' link at our company website www.mfyco.com.

 
In This Issue
Driving May Not Be Essential Job Function of Traveling Salesperson
MFYCO Facebook
From the IRS...Mid-year Amendments to Safe Harbor 401(k) Plans and Notices
Protecting Workplace Advancement and Opportunity Act (H.R. 4773)
eLaws Quick Link
2016 Retirement Plan Limits
Track Government Spending
Terms of Use

Driving May Not Be Essential Job Function of Traveling Salesperson

trucks_cars_traffic.jpg   
Driving is not necessarily an essential function of a sales position requiring extensive travel, according to the 4th U.S. Circuit Court of Appeals.

Traveling pharmaceutical sales representative Whitney Stephenson worked for Pfizer Inc. for nearly 30 years and was one of the company's top sales representatives. Stephenson's job required her to travel to and from doctors' offices to sell pharmaceutical products, but her job description did not list driving as an essential function. Pfizer provided Stephenson with a company car to drive to and from sales meetings.

Stephenson developed an eye condition that caused her vision to deteriorate. She was eventually unable to drive and requested that Pfizer provide her a driver to take her to and from sales meetings. Pfizer denied Stephenson's request for a driver, stating that the ability to drive an automobile was an essential function of the job of a salesperson and that hiring a driver was "inherently unreasonable."

Stephenson sued Pfizer, alleging that the company violated the Americans with Disabilities Act (ADA) by failing to accommodate her disability. The district court granted summary judgment, finding that the ability to drive an automobile was an essential function of Stephenson's job as a salesperson. Because Stephenson could not drive a car with any accommodation, the court held that Pfizer did not violate the ADA (and did not fail to accommodate Stephenson's disability) when it denied Stephenson's request for a driver.

On appeal, the 4th Circuit reversed the district court's decision, noting that it was not clear whether the ability to drive was an essential function of Stephenson's sales position. The court emphasized that Stephenson's job description said nothing about driving or even possessing a driver's license. Thus, while there was some evidence that being able to drive was essential for a salesperson, there was also some evidence that a salesperson only needed to be able to travel.

The court sent the case back to the district court to determine whether driving or traveling was an essential function of Stephenson's job. If driving was an essential function, then Pfizer did not violate the ADA because Stephenson could not drive with any accommodation. If only the ability to travel was required, however, then Pfizer may have had an obligation to offer Stephenson a driver or some other accommodation.

Job descriptions are an essential part of hiring and managing your employees! The process of writing a job description requires having a clear understanding of the job's duties and responsibilities. Employers should be cautious in drafting them, ensuring that all essential functions are listed and precisely worded. Please contact MFYCO if we can be of any assistance in helping you complete this important task.

Stephenson v. Pfizer, Inc., 4th Cir., No. 14-2079 (March 2, 2016)


 
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From the IRS
Mid-year Amendments to Safe Harbor 401(k) Plans and Notices

New guidance helps plan sponsors comply with the safe harbor plan and notice rules when making mid-year plan changes (Notice 2016-16). The new guidance provides that a mid-year change to a safe harbor plan or to a plan's safe harbor notice doesn't violate the safe harbor rules merely because it's a mid-year change if:
  • the plan satisfies the notice and election opportunity conditions, if applicable, and
  • the change is not a prohibited mid-year change listed in Notice 2016-16.
Background
401(k) or 401(m) retirement plans can satisfy the nondiscrimination rules through a safe harbor structure that includes required, fully vested contributions, either as specified matching or non-elective employer contributions. Safe harbors also include limits on mid-year changes and a requirement to provide notice to plan participants explaining the safe harbor feature at least 30 days before the next plan year. Under prior guidance, once plan sponsors provided this notice, they couldn't amend their safe harbor 401(k) plan mid-year, unless the employer was either operating at an economic loss or previously provided a notice of intent to reduce or suspend safe harbor employer contributions.

New Guidance

Notice rules for mid-year changes
If the mid-year change is to a plan's required safe harbor notice content, the plan sponsor must:
  • provide an updated safe harbor notice that describes the mid-year change and its effective date 30-90 days before the effective date of the change to each employee that must otherwise receive a safe harbor notice.
  • give each notified employee a reasonable period of time to change their cash or deferral election after receipt and before the effective date of the change.
Examples of permissible mid-year changes
If they satisfy the notice rules, if applicable, safe harbor 401(k) plans sponsors may mid-year:
  1. Increase future safe harbor non-elective contributions from 3% to 4% for all eligible employees.
  2. Add an age 59 ½ in-service withdrawal feature.
  3. Change the plan's default investment fund provider.
  4. Alter the plan rules on arbitration of disputes.
  5. Shift the plan entry date for employees who meet the plan's minimum age and service eligibility requirements from monthly to quarterly.
  6. Adopt mid-year amendments required by applicable law (for example, statutory law changes or court decisions).
Examples of impermissible mid-year changes
Safe harbor 401(k) plan sponsors can't mid-year:
  1. Increase an employee's required number of completed years of service to have a nonforfeitable right to the employee's account balance attributable to safe harbor contributions under a qualified automatic contribution arrangement (QACA).
  2. Reduce the number (or otherwise narrow) the group of employees eligible to receive safe harbor contributions. This prohibition doesn't apply to an otherwise permissible change under either eligibility service crediting or entry date rules made for employees who aren't already eligible (as of either the effective or adopted date of the change) to receive safe harbor contributions under the plan.
  3. Change the type of safe harbor plan, for example, from a traditional safe harbor plan to a QACA 401(k) safe harbor plan.
  4. Modify (or add) a formula for determining matching contributions (or the plan's definition of compensation used to determine matching contributions) if the change increases the amount of matching contributions. However, a plan may make a mid-year change to allow discretionary matching contributions if:
    • the change is adopted at least 3 months before the end of the plan year,
    • made retroactive for the entire plan year, and
    • the plan sponsor gives an updated safe harbor notice and election opportunities to all participants.
Page Last Reviewed or Updated by IRS: 16-Feb-2016
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Protecting Workplace Advancement and Opportunity Act (H.R. 4773)

On March 16 Congress introduced legislation to nullify the proposed Department of Labor overtime rule. Currently the rule would set the salary threshold for exempt employees at $50,440 annually, up from the current $23,660. Please see our June 2015 newsletter for additional information about the proposed ruling detail.

  • Nullify the proposed rule.
  • Require the DOL to first conduct a comprehensive economic analysis on the impact of mandatory overtime expansion to small businesses, nonprofit organizations and public employers.
  • Prohibit automatic increases in the salary threshold.
  • Require that any future changes to the duties test must be subject to notice and comment.
 


 What would you like to see in a future issue?

Contact our office with your suggestions.

  email: info@mfyco.com
 

 
 
   
2016 Retirement Plan Limits
All limits are based on the calendar year.  
   
 
2016
2015
2014
Maximum Annual Defined Benefit
$210,000
$210,000
$210,000
Maximum DC Annual Addition ($$)
$ 53,000
$ 53,000
$ 52,000
Maximum 401(k) Deferrals
$ 18,000
$ 18,000
$ 17,500
Older EE Catch-Up Contribution
$   6,000
$   6,000
$   5,500
Maximum Plan Compensation
$265,000
$265,000
$260,000
Highly Compensated Threshold
$120,000
$120,000
$115,000
Key Employee in a Top-Heavy Plan
$170,000
$170,000
$170,000
Income Subject to Social Security Tax
$118,500
$118,500
$117,000
PBGC Maximum Monthly Guarantee*
$5,011.33
$5,011.33
$4,943.18
Maximum DC Annual Addition (%)
100%
100%
100%
Social Security Tax - Employee
6.2%
6.2%
6.2%
Social Security Tax - Employer
6.2%
6.2%
6.2%
Medicare Tax**
1.45%
1.45%
1.45%
DC Plan Deduction Limit
25%
25%
25%
Definition of Compensation for DC   Plan Deduction Limit
Includes
Deferrals
Includes
Deferrals
Includes Deferrals
*Life Annuity at age 65
** Individuals with earned income over $200,000 pay an additional 0.9% in Medicare taxes
 
 
 
 
If you have not received our business card with these numbers printed on it and would like one, please let us know! We would be happy to mail you one (or a few to share!)
   

 
about MFYCO ... 

  • Michael F. Yates & Company, Inc. can help you with a variety of services ranging from retirement plans to providing results-oriented survey instruments, training and development programs for your employees. Our products and services are intended to help you maximize the effectiveness of your Human Resources function.
     
  • These products and services incorporate our years of experience so that you receive rapid results and exceptional value. From onsite consulting, to strategic business integration, to Web enablement, we understand how Human Resources can be applied to solve your problems and achieve your goals. As a result, we can help you get the most out of your investment and turn your most precious resource into a competitive advantage.
     
  • We offer Consulting, Retirement Planning, Pension and 401(K) both qualified and non qualified Plans, Welfare Plans, Communications, Computer Systems, Executive Plans, Compensation, Mergers, Acquisitions, Divestitures and Other Services. 
     
  • We offer a true and honest, Client Partnership.
     

Take the Michael F. Yates & Company, Inc. challenge!

Call us today ... 908-689-4200 

 

 
mh group
 How to Track Government Recovery Spending

 

"The Board shall establish and maintain...a user-friendly, public-facing website to foster greater accountability and transparency in the use of covered funds. The website...shall be a portal or gateway to key information relating to the Act and provide connections to other government websites with related information." 

 
 
Michael F. Yates & Company, Inc. 
_________________
 
 
101 Belvidere Avenue
P.O. Box 7
Washington, NJ 07882-0007 
 
908-689-4200

fax: 908-689-6300
 
email: info@mfyco.com

 

 

 
Our staff and firm are proud members
of the following professional organizations:

Society of Actuaries
 
American Society of Pension Professionals & Actuaries

Society for Human Resource Management
  
GAPS (Global Association Pension Services)

WorldatWork

 American Management Association

 

National Federation of Independent Business

Better Business Bureau

 

 

  
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COP
  
The site ("from the HR perspective" hence herein referred to as MFYCO.com) is made available by Michael F. Yates & Company Incorporated. All content, information and software provided on and through 'from the HR perspective' and MFYCO.com ("Content") may be used solely under the following terms and conditions ("Terms of Use".) 
 
 
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 MFYCO PRIVACY POLICY

 
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Concluding Note

As always, any statements regarding federal tax law contained herein are not intended or written to be used, and cannot be used, for the purposes of avoiding penalties that may be imposed under federal tax law or to market any entity, investment plan or arrangement.