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Tuesday, May 31, 2016

Overtime history

Last week there was a lot of news about the Department of Labor raising the salary threshold. Here’s a brief history of overtime pay.

Overtime or time and a half began with the Fair Labor and Standards Act of 1938. The FLSA established the eight hour a day/forty hours a week work standard, a national minimum wage, restricted employment of minors, and guaranteed time and a half pay for work over forty hours. Overtime pay was initially looked upon as a fine for employers and not a bonus for workers. 

Salaried or white collar workers (executive, administrative, professional) have been neglected overtime more so than hourly workers as employers can designate who is exempt from overtime by assigning “managerial” titles or paying a salary slightly above the established threshold. Since 1940, the Department of Labor regulations have required three tests to establish exemption from overtime under the FLSA- (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the work performed (2) the salary paid must meet a minimum specified amount (3) the employee’s job duties must primarily involve executive, administrative, or professional duties. Any employee below the salary threshold and not meeting the test requirements is eligible to be paid overtime.

The current standard for eligibility dates to the 1950’s. If an employee’s job duties or salary fell below the standard then they were eligible for overtime. The Department of Labor has the power to define who is eligible through the FLSA. Since the passing of the FLSA, the Department of Labor has changed the definition six times. The minimum salary threshold for overtime by salaried workers was last changed by the Department of Labor in 2004 when it was raised to $23,660 annually. The previous adjustment was 1975.

On May 18, 2016, the Department of Labor announced new overtime rules and threshold that will take effect December 1, 2016. The new rule focuses on updating salary compensation for employees designated executive, administrative and professional. The threshold for overtime pay was raised to $47,476 annually or $913 per week.

Tuesday, May 17, 2016

Workplace monitoring

 The messaging software company Slack is working on software that will install manager bots to monitor employee production. The bots will be plugged into company networks to monitor an employee’s work. The bots will ask for updates, check employees work status, and even ask what tasks are currently being worked. Managers won’t have to roam the cube farms to keep everyone on point. The bots will do it.

Does this help or hurt employee morale and productivity? Do companies that are constantly looking over employee shoulders getting the results they want?

Many in the workforce have been exposed to a micro manager. Constantly overlooking every detail of an employee’s work. Workers usually respond with frustration or task-to-task completion without innovation. Doing only what has to be done to satisfy the manager, waiting to be told what to do next. The last decade has seen the use of technology to replace that micro manager.

Long before the idea of manager bots technology enabled companies to monitor almost every aspect of a worker’s day. Most, if not all, companies that have computer networks monitor employee email traffic and Internet use. Some even capture keystrokes and keyboard activity, such as how long a keyboard has been inactive. Software enables managers to monitor telecommuters-are they actively working or just logged in to the network? Companies that utilize vehicles track employees through GPS, recording location and length of stay. Hospitals track nurses through the use of sensors embedded to monitor their location and patient visits. And let’s not forget about cameras. With or without using a computer, workers are constantly tracked. How the use of monitoring occurs and is communicated to workers can have varied results.

Hawthorne Effect

Workers who are knowingly being observed tend to be more productive due to what has been called the Hawthorne effect. The Hawthorne effect is used to describe the tendency of observed employees to work harder due to the attention they are receiving from researchers rather than because of individual work habits.

The Hawthorne Effect is named for the location where worker productivity experiments took place in the 1920’s and 1930’s, Western Electric’s Hawthorne Works near Hawthorne, Illinois. The electric company had commissioned research to determine if there was a relationship between productivity and the work environment. The focus of the studies was to determine if increasing or decreasing the amount of light that workers received would have an effect on worker productivity. Employee productivity seemed to increase due to the changes but then decreased after the experiment was over. Researchers suggested that productivity increased due to attention from the research team and not because of changes in the experimental variables.

Transparency Trap

Ethan Bernstein, assistant professor of business administration at Harvard Business School has extensively researched employee monitoring. Bernstein believes that it is difficult for employees to be at their best when they know they are being watched and evaluated at every moment. Bernstein wrote in the Harvard Business Review, “Wide open workspaces and copious real time data on how individuals spend their time can leave employees feeling exposed and vulnerable.” For his paper, The Transparency Trap, Bernstein conducted several experiments to help prove his theory. In one, Bernstein embedded five Chinese born Harvard undergraduate researchers into the lines of the world's second largest mobile phone factory in China. Controls were added to allow for the Hawthorne Effect.

This particular experiment showed that employees acted and behaved differently when they were being watched. Basically, observed employees followed the policies of the company to the letter while unobserved employees did not. Unobserved employees innovated ways to make their tasks easier, tending to hide process improvements from managers. Two examples were scanning multiple bar codes at once instead of one at time as per policy and crossed trained themselves on breaks. The intent was to improve the process without having the inefficiency of explaining their actions to managers.

Overall, those shielded from observation were more productive than the observed. Experimentation, shared problem solving, and focus flourished.


There are many examples of employee monitoring. Done improperly, with poor communication to employees may cause resentment and a feeling of “Big Brother” is watching. Letting workers know that data is being collected to improve efficiency may alleviate skewed results. UPS has saved millions and improved their schedules by collecting delivery data and providing the analysis back to drivers. You may have heard of how UPS routes were made more efficient by reducing left turns.

Letting employees know that monitoring is taking place, how the data is being used, and how that will improve their workday goes a long way is establishing trust between employer and employee.

Will employees do their best when being observed? Or are they so hindered by the constant oversight that they do the minimum required. If left to themselves would they perform better, working more efficiently with less fear of messing up and being corrected by managers?

These questions that are still being studied. From what is known, it seems that communication between management and the workforce about the use of technology to monitor productivity is a key factor for improvement. Technology will always continue to improve. Innovators will figure out how to apply technology to the workplace. But while people are still involved they need to be kept in the loop.

Monday, May 2, 2016

Health history discrimination

What an employer asks on employment applications regarding criminal history and how it is used, has long been scrutinized by the Equal Employment Opportunity Commission (EEOC). In recent years when an employer asks about criminal history has been at issue (Should the box be banned, February 4, 2013). Employers are also getting caught on health history questions, although the EEOC has been monitoring that form of discrimination for over twenty years.


The Civil Rights Act of 1964, Title VII, made it illegal to discriminate based on race, color, religion, sex, or national origin. The EEOC was created in 1965 to enforce the Civil Rights Act but had to authority. In 1972, Congress gave the EEOC litigation enforcement authority. The American with Disabilities Act was passed in 1990 and the EEOC was given enforcement authority over Title I of the Act, which includes the employment discrimination provisions. The ADA places restrictions on employers regarding asking job applicants to answer medical questions.

EEOC v. Grisham Farm Products, Inc.

In a recent case the EEOC, on March 22, 2016, filed suit in the United States District Court against Grisham Farm Products, Inc. alleging that its employment application violated the ADA. (Equal Employment Opportunity Commission v. Grisham Farm Products, Inc. 16-cv-03105)

In the case, an applicant applied for a warehouse position at Grisham. The Grisham job application contained forty-three “yes or no” health related questions. The questions were similar to what would be seen on an initial doctor visit. The Grisham application inquired whether in the past ten years the applicant has had allergies, arthritis, bladder infections, eating disorders, gallstones, sexually transmitted diseases, etc. The application also inquired about prior hospitalizations, HIV infection, treatment for alcoholism, and whether the applicant consulted a doctor, chiropractor, therapist, or other health care provider in the past two years.

The application’s Health History section stated in large letters, “All questions must be answered before we can process your application”. The applicant did not answer all of the questions and telephoned Grisham Farm. A company representative said that if the health history section was not fully completed, it would not be accepted.

The EEOC claims that the applicant believed he did not have to reveal his medical history to any potential employer. The case is still in litigation.

Review your hiring process

Employers should be frequently reviewing their hiring process. They also need to follow EEOC decisions as these decisions occur frequently and affect the hiring process. As with questions regarding criminal history, there are parameters as to what health questions can be asked and when they can be asked. The EEOC is clear that pre-employment health inquiries can be made only after a conditional offer has been made, if the inquiries are made to all applicants for that job category, and the inquiries are job related and consistent with a business necessity.

May 9, 2016-The EEOC released it's latest guidance on leave as a reasonable accommodation under the ADA. Employer-Provided Leave and the Americans with Disabilities Act