Over the past few years, the pre-employment screening process for job applicants has taken some unconventional turns. Gone are the days of relying solely on the traditional interview process followed by reference checks and a possible background check. More and more employers, including credit unions, are relying heavily on the Internet—particularly social media sites—to screen job applicants. There is no question that there are benefits to utilizing these resources.
Most candidates do a great job of presenting themselves in an interview and telling you what you want to hear. However, digging into the things they post via social media sites may paint a very different picture of the applicant and the type of person you might be hiring.
However, there are also risks associated with this approach. Online searches often lend themselves to learning protected information about a candidate, which could then lead to making an illegal hiring decision.
For example, let’s say before or after an interview, you decide to view an applicant’s Facebook page. Upon doing so, you view posts and pictures which disclose the applicant’s age, race, and sexual orientation, or a recent announcement that she is pregnant. You now have information that should have absolutely no bearing on your decision to hire this person.
And if you decide to hire someone else who is more qualified for the position, how do you defend yourself when the applicant you didn’t hire sues your credit union for discrimination?
The fact of the matter is that there are ways for applicants to see who has viewed their personal social media pages. If a pregnant applicant finds out you viewed her Facebook page before selecting another candidate, she may have a legitimate pregnancy discrimination claim, forcing you to defend why you went a different direction with your hiring decision. If you can’t paint a clear and objective picture outlining why the chosen candidate was a better choice regardless of the competitive applicant’s pregnancy status, you may lose the case.
So does this mean we should all stop using the Internet as part of our applicant screening process? Well, there is certainly an argument that can be made (regardless of the associated risks) that employers have been doing a fine job of making sound hiring decisions without the Internet for decades.
However, if you plan to continue utilizing the Internet as part of your applicant screening process, there are ways you can minimize the risk.
The easiest and safest way is to not allow hiring managers to conduct this type of screening at all. Instead, appoint another person within the organization who has no influence in the hiring decisions to conduct online screenings. Provide specific instructions to the designee regarding the types of information you are seeking. That person can then report back (through documentation) to the hiring manager or HR with the requested information, without disclosing any further information they may have learned in the process.
This is not a perfect solution, as there is no way to guarantee that the designated screener does not verbally disclose any protected information; however, it is certainly better than allowing a hiring manager to do online screening on his/her own.
Additionally, whether online screening is considered a true background check has been a recent topic of debate among employment law and HR professionals. If it truly is a background check, it is important to remember that the Fair Credit Reporting Act applies. This means obtaining the applicant’s consent to conduct this type of background check and providing them with the related disclosures before (and possibly after) the background check is completed.
Finally, check with your employment practices liability insurance carrier or legal counsel to ensure your background check and hiring policies/processes are legal, and to mitigate as much risk and liability as possible.
Christopher A. Pajak is a management/HR consultant for the Credit Union Association of New York. Contact him at email@example.com. Reprinted with permission from Connection, the publication of the Credit Union Association of New York (www.cuany.org).
“To Global Employees,
I am pleased to announce that we are changing our performance review program to better align with the goals of our One Microsoft strategy. The changes we are making are important and necessary as we work to deliver innovation and value to customers through more connected engagement across the company.
This is a fundamentally new approach to performance and development designed to promote new levels of teamwork and agility for breakthrough business impact. We have taken feedback from thousands of employees over the past few years, we have reviewed numerous external programs and practices, and have sought to determine the best way to make sure our feedback mechanisms support our company goals and objectives. This change is an important step in continuing to create the best possible environment for our world-class talent to take on the toughest challenges and do world-changing work.
Here are the key elements:
More emphasis on teamwork and collaboration. We’re getting more specific about how we think about successful performance and are focusing on three elements—not just the work you do on your own, but also how you leverage input and ideas from others, and what you contribute to others’ success—and how they add up to greater business impact.
More emphasis on employee growth and development. Through a process called “Connects” we are optimizing for more timely feedback and meaningful discussions to help employees learn in the moment, grow and drive great results. These will be timed based on the rhythm of each part of our business, introducing more flexibility in how and when we discuss performance and development rather than following one timeline for the whole company. Our business cycles have accelerated and our teams operate on different schedules, and the new approach will accommodate that.
No more curve. We will continue to invest in a generous rewards budget, but there will no longer be a pre-determined targeted distribution. Managers and leaders will have flexibility to allocate rewards in the manner that best reflects the performance of their teams and individuals, as long as they stay within their compensation budget.
No more ratingsThis will let us focus on what matters—having a deeper understanding of the impact we’ve made and our opportunities to grow and improve.
We will continue to align our rewards to the fiscal year, so there will be no change in timing for your rewards conversation with your manager, or when rewards are paid. And we will continue to ensure that our employees who make the most impact to the business will receive truly great compensation.
Just like any other company with a defined budget for compensation, we will continue to need to make decisions about how to allocate annual rewards. Our new approach will make it easier for managers and leaders to allocate rewards in a manner that reflects the unique contributions of their employees and teams.
I look forward to sharing more detail with you at the Town Hall, and to bringing the new approach to life with leaders across the company. We will transition starting today, and you will hear from your leadership in the coming days about next steps for how the transition will look in your business. We are also briefing managers and will continue to provide them with resources to answer questions and support you as we transition to this approach.
I’m excited about this new approach that’s supported by the Senior Leadership Team and my HR Leadership Team, and I hope you are too. Coming together in this way will reaffirm Microsoft as one of the greatest places to work in the world.
There is nothing we cannot accomplish when we work together as One Microsoft.”
Kris Dunn is chief human resources officer for Kinetix, an RPO firm for growth companies. Reprinted with permission from his blog www.hrcapitalist.com
After a long, tough slog through the most challenging economy in recent memory, a second straight year of positive hiring and compensation trends among credit unions reflects cautious optimism in the overall business climate.
Those trends also indicate a strategic emphasis on rewarding and retaining top performers in an increasingly competitive labor market.
“There’s still some uncertainty about the economic recovery and whether or not it’s sustainable for the long term, but these statistics are encouraging,” says Beth Soltis, CUNA’s senior research analyst, about the findings of the 2013-2014 CUNA Staff Salary Report.
Most credit unions (81%) gave pay increases to nonmanagement staff in 2012. And 75% of credit unions gave pay increases to CEOs and managers in 2012. Those numbers look similar for 2013.
Looking ahead to 2014, credit unions project pay raises of approximately 2.3%.
Meanwhile, wage freezes, which became commonplace during the recession, continue to recede. Just less than 30% of credit unions intend to initiate wage freezes for at least some employees—down from 45% in back-to-back years at the height of the recession, but still well above the 15-year historical average preceding the recession.
In all, the report shows credit unions’ continuing shift from defensive to offensive compensation strategies.
Hiring and retention
One-third of credit unions intend to hire full- or part-time staff this year. One-quarter plan to add both—up from 20% in 2011 and 2012. Those figures rise dramatically with asset size, from 5% of credit unions with less than $20 million in assets to 80% of credit unions with more than $500 million in assets.
Only 5% of credit unions plan to reduce staff this year.
“The hiring trend is positive, and I think it’s going to continue that way for a while,” says Chris Cardwell, principal of Cardwell Consulting, which advises a variety of organizations about compensation and rewards strategies.
But credit unions aren’t immune to employee departures. Despite a respectable 10% turnover rate in recent years, stagnant wages and heavier workloads have lowered employee job-satisfaction and engagement levels, Soltis says. And older employees will be exiting the workforce in greater numbers after putting off retirement during the recession.
The number of jobs available nationally has been hovering around 3.8 million this year— nearly double the number of available jobs during the depths of the recession, according to the U.S. Bureau of Labor Statistics. With more options available to them, employees are more likely to voluntarily leave their jobs to pursue greener pastures.
“Credit unions should definitely have their antennae up on turnover and retirement trends,” says Cardwell.
(Read the full article at CreditUnionMagazine.com.)
The federal Family and Medical Leave Act (FMLA) imposes a number of written notice requirements upon an employer. Failure to comply with them could expose an employer to claims that the employer violated the FMLA, interfered with an employee’s FMLA rights or retaliated against an employee. Thus, it is good for HR professionals to review their company’s FMLA practices from time-to-time to ensure they are complying fully with the FMLA notice mandates. Here (below) is a summary of the mandates. They are explained in more detail in the United States Department of Labor (DOL) regulations, found here: http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&sid=d178a2522c85f1f401ed3f3740984fed&rgn=div5&view=text&node=29:220.127.116.11.54&idno=29#29:18.104.22.168.54.3.489.1.
The FMLA requires employers to post a notice (a poster) explaining an employee’s FMLA rights. A copy of the DOL required notice can be found here: http://www.dol.gov/whd/regs/compliance/posters/fmlaen.pdf. An employer that has a written handbook or leave policy must include the general FMLA notice information in the same. Such notices must be given to all employees at least once during employment, typically at the time of hiring. It is probably not a bad idea to give them to an employee again when a leave issue arises. This information can be posted electronically if it is made accessible to all employees and applicants. The paper poster must be posted in a central place, however, if not all employees have access to the electronic notices.
Eligibility and Rights/Responsibilities Notices
Once an employee requests FMLA leave, or an employer becomes aware that an employee’s leave may be covered by the FMLA, the employee must first be told whether or not he/she is eligible for FMLA leave. Absent extenuating circumstances, this must be done within five days. The DOL has provided a form (see below) for employers to use. Giving written eligibility notice is best because it documents the employer’s compliance with the law. An employer must notify the employee of any changes in eligibility status within five days of the change. At the same time the eligibility notice is given, the employer also must notify the employee in writing of his/her rights and responsibilities under the FMLA. DOL’s model eligibility form (see below) includes these requirements. This rights and responsibilities notice must state that the leave may be designated and counted against FMLA entitlement and must identify the 12-month period (e.g. rolling, fixed calendar, etc.) the employer uses for determining the amount of leave available. The employee must also be told at this time what it must pay in premiums to pay for insurance and whether health care provider certification is required to justify the leave (DOL also provides model health care provider certification forms (see below).
Within five days of when it receives sufficient information to determine if a leave is FMLA-qualifying (which is typically—but not always—after receiving back the employee’s health care provider certification form), the employer must give written notice designating the leave as FMLA leave or denying designation. The designation notice must specifically state the amount of leave time that will be designated as FMLA leave and whether the employee will be required to use accrued paid leave at the same time. If leave duration is unknown (or intermittent), this designation should be given every thirty days. The designation notice also must tell the employee if a return to work (RTW) certification is required and if so, must provide a list of essential job duties if the employer requires the RTW note to address the employee’s ability to perform essential job functions. If the leave is not deemed as FMLA-qualifying, the employee must still be given a designation notice and told why. The employer must tell the employee of any changes in the designation within five days. Again, DOL has provided a helpful model designation form (see below).
The United States Department of Labor (DOL) has issued FMLA forms said to be good for use through February of 2015. The forms prompt you to provide all the required information explained above. Here are the forms and where you can find them online:
WH-380-E Certification of Health Care Provider for Employee’s Serious Health Condition at: http://www.dol.gov/whd/forms/WH-380-E.pdf WH-380-F Certification of Health Care Provider for Family Member’s Serious Health Condition at: http://www.dol.gov/whd/forms/WH-380-F.pdf WH-381 Notice of Eligibility and Rights & Responsibilities at http://www.dol.gov/whd/forms/WH-381.pdf WH-382 Designation Notice at: http://www.dol.gov/whd/forms/WH-382.pdf WH-384 Certification of Qualifying Exigency For Military Family Leave at http://www.dol.gov/whd/forms/WH-384.pdf WH-385 Certification for Serious Injury or Illness of Covered Service Member for Military Family Leave at: http://www.dol.gov/whd/forms/WH-385.pdf
Michael Patrick O'Brien is an employment attorney with Utah law firm of Jones Waldo Holbrook & McDonough (www.joneswaldo.com). He also serves as the Legal and Legislative Director for Utah’s Society for Human Resource Management chapter. Contact him at 801-534-7315 or firstname.lastname@example.org.
Here’s a summary of the most recent NCUA board meeting, courtesy of CUNA’s Regulatory Advocacy Department.
NCUA BOARD MEETING TODAY
November 21, 2013
Today, the NCUA Board approved a slightly revised CUSO final rule. In addition, the Board approved a 2014 operating budget that represents an increase of 6.7% from 2013, to $268.3 million.
The Board announced that it expects there to be no 2014 assessment for the Corporate Stabilization Fund and estimates the 2014 National Credit Union Share Insurance Fund premium will be from zero to five basis points.
Also, the Board approved an increase of the Overhead Transfer Rate to 69.2% for 2014. Lastly, the Board approved a decrease in the natural person federal credit union operating fee rate for 2014 by 18.4%.
NCUA Estimates 2014 NCUSIF Assessment of Zero to Five Basis Points & Expects No 2014 Assessment for the Corporate Stabilization Fund
NCUA will not charge a Temporary Corporate Credit Union Stabilization Fund assessment in 2014. Also, the agency estimates the National Credit Union Share Insurance Fund (NCUSIF) assessment for 2014 to be between zero and five basis points.
Credit unions have paid $4.8 billion in Stabilization Fund assessments since the fund was established. The projected net remaining assessments over the life of the Stabilization Fund, based on estimates from the second quarter of 2013, now range from -$0.2 billion to $1.6 billion. The NCUA also will receive $1.4 billion through a settlement with JP Morgan announced this week. The settlement funds “will greatly benefit credit unions” and “will enable NCUA to greatly reduce the assessments that all credit unions have to pay,” according to NCUA Chairman Debbie Matz.
CUNA Chief Economist Bill Hampel has noted that factoring the net proceeds from the JP Morgan settlement, the remaining assessment range falls to around minus $1 billion to plus $500 million.
Final Rule – Credit Union Service Organizations
The Board adopted a final CUSO rule today. Although there were some revisions from the proposed rule, we continue to have concerns about the authority for the rule and are reviewing the agency’s estimates of the regulatory burdens the rule will impose.
The final rule expands certain requirements that previously only applied to federally chartered credit unions to federally-insured state chartered credit unions (FISCUs). These requirements address accounting, financial statements, and audits. They also expand CUSO reporting requirements and limit the ability of “less than adequately capitalized” FISCUs to recapitalize their CUSOs. All CUSOs will be required to annually provide profile information to NCUA and, for FISCUs, the appropriate state regulator.
The final rule requires CUSOs that engage in what NCUA considers “complex or high-risk” activities to report more detailed information including audited financial statements and general customer information. The final rule also requires all subsidiary CUSOs to follow applicable laws and regulations and applies all of the regulation’s requirements to subsidiary CUSOs.
NCUA details what it considered complex or high risk activities along with special requirements that appear to apply to lending CUSOs.
Complex or high risk activities include:
Credit and lending: business loan origination; consumer mortgage loan origination; loan support services, including servicing; student loan origination; and credit card loan origination. Information technology: electronic transaction services; record retention, security, and disaster recovery services; and payroll processing services. Custody, safekeeping, and investment management services for credit unions.
The special requirements for a credit union investing in, lending to, or receiving services from the CUSO include:
Services provided to each credit union; The investment amount, loan amount, or level of activity of each credit union; and The CUSO’s most recent year-end audited financial statements.
In addition, CUSOs engaging in credit and lending services will be required to report the following activity by loan type:
The total dollar amount of loans outstanding; The total number of loans outstanding; The total dollar amount of loans granted year-to-date; and The total number of loans granted year-to-date.
NCUA acknowledged that all federally-insured credit unions with loans to or investments in CUSOs will be required under the final rule to make changes in the agreements they currently have with their CUSOs. Accordingly, the effective date of the final rule is June 30, 2014. Additionally, CUSOs will begin submitting reports to NCUA under new section 712.3(d)(4) when the agency’s reporting system is fully operational, which will be by December 31, 2015.
2014 Operating Budget
The NCUA Board approved a 2014 budget of $268,290,296, which is an increase of $16.9 million from the 2013 budget. The 6.7% increase in the 2014 budget exceeds the 6.1% budget increase from 2012 to 2013. The 2014 budget increase is attributable primarily to an $11 million, or 6%, increase in employee pay and benefits. Of the 6% increase, 4.1% relates to merit and locality pay increases associated primarily with NCUA’s current collective bargaining agreement. “With the federal pay freeze lifted in 2014, NCUA employees who have received no base salary increase for the past two or three years will receive an average merit increase of 4% based on performance,” as noted in the budget material.
While NCUA’s staffing level remains the same at 1,262.5 full time equivalents, the budget reflects the following:
It realigns NCUA’s regional supervision of FISCUs in nine states to balance workload and staffing, as well as respond to changes in the industry. This action creates more geographically compact regions designed to improve efficiency. It establishes the Office of Continuity and Security Management (OCSM). NCUA is creating this office to aggregate all security-related functions now being performed in disparate offices. The functions being consolidated include continuity of operations planning, physical security, and personnel security. In addition, a security function is added to the organization to address national security issues affecting the financial industry. It realigns the Equal Opportunity Programs office, currently in the Office of Executive Director (OED), to the Office of Minority and Women Inclusion.
The 2014 budget also reflects an increase in the agency’s contracted services of $3.1 million, or 14.8%, over the 2013 budget. The most significant increase relates to NCUA’s effort to strengthen cybersecurity, a high-priority effort to ensure the agency is in compliance with the Federal Information Systems Management Act. The new OCSM also accounts for growth in this line item, to improve agency security and comply with federal standards and regulations. Finally, funds are requested for continued contractor assistance as an alternative to new hires, to develop compliance guides that address 11 new financial services regulations issued by the CFPB and other federal regulators.
2014 Overhead Transfer Rate
The NCUA Board modified the Overhead Transfer Rate (OTR) from the current 59.1% to 69.2% for 2014. Under the Federal Credit Union Act, NCUA may transfer funds from the NCUSIF to fund its administrative and other expenses related to federal share insurance. NCUA uses the OTR to allocate those expenses.
According to the agency, the modification in the OTR is primarily due to the results of the Examination Time Survey for 2013. Examiners reported spending 88% of their examination and supervision time on insurance related procedures for the time survey ending in 2013, compared to 67% in the previous survey cycle.
We urge NCUA to continue to refine its methodology related to the OTR to provide additional clarity.
2014 Operating Fee Scale
The NCUA Board approved a decrease in the natural person federal credit union operating fee rate for 2014 by 18.4% and a 5.1% increase in the asset dividing point for the 2014 operating fee scale that the agency uses to determine the fee assessed to federal credit unions. In addition, federal credit unions with assets less than $1 million will not be assessed an operating fee for 2014. The operating fees for federal credit unions, which will be assessed based on assets as of December 31, 2013, will be due to NCUA no later than April 15, 2014.
According to NCUA, a number of factors resulted in the operating fee rate decrease, including the increased OTR, increased asset growth, as well as the July Board action to reduce the 2013-operating budget by $2.6 million.
We commend the decision for the operating fee to remain at no more than one month’s expenses of the agency.
Mary Dunn, CUNA Deputy General Counsel