Friday, December 17, 2010

Fortune, December 14, 2010, Tuesday


December 14, 2010, Tuesday


Want to get promoted? Stifle your creativity

Posted by Annie

Creativity is good for your career, right? Not necessarily. Especially in uncertain times, sticking with the status quo may get you ahead faster.

By Anne Fisher, contributor

If you're bubbling over with fresh, innovative ideas, consider keeping them to yourself -- at least if you hope to reach senior management. That's the conclusion of a series of three new studies by professors at Cornell University, the University of Pennsylvania, and the Indian School of Business.

The research clearly shows that "when people voice creative ideas, they are viewed by others as having less leadership potential," says Jack Goncalo, who teaches organizational behavior at Cornell's School of Industrial and Labor Relations.

That may come as a surprise, since many companies claim to prize innovative thinking.

But Goncalo, who led the studies, points out that our deeply ingrained expectations of "creative people" and "effective leaders" are often at loggerheads: Creative types may be seen as mercurial and unpredictable, while leaders "are expected to reduce uncertainty and uphold the norms of the group," he says.

That's particularly true in times of economic uncertainty. The data suggest that, when the going gets tough, people crave the security that comes from having leaders who preserve the status quo.

One study of 346 employees working in jobs that required creative problem solving showed that few of them were rewarded with promotions. What it means, Goncalo says, is that "creative people are getting filtered out on their way to the top."

The New York Times, December 14, 2010, Tuesday

Copyright 2010 The New York Times Company
The New York Times

December 14, 2010, Tuesday

Law Stiffens Protections Over Wages


Gov. David A. Paterson signed into law some of the nation's strongest protections against wage theft on Monday, after months of lobbying by immigrants' advocates and labor unions that said New York lagged behind other states on the issue.

The law, which takes effect in April, will quadruple the penalties for employers who steal workers' pay, and will protect whistle-blowers from retaliation.

Employers who pay below the minimum wage, fail to pay overtime or unfairly garnishee wages are especially rampant in restaurant, retail and construction businesses where illegal immigrants make up much of the work force, according to a report this year by the National Employment Law Project. In New York City, the report said, lost wages add up to more than $18.4 million a week.

''These issues go unreported and unaddressed because if you speak up you're likely to be terminated,'' Mr. Paterson said in a news conference. ''There's no administrative remedy; there's no voice. That ends today.''

Under the old law, employers found to have stolen workers' wages had to repay the money with a penalty of 25 percent.

''The fines were so minimal that a lot of these rogue employers saw them as the cost of doing business,'' said State Senator Diane J. Savino, a Democrat from Staten Island who was the bill's lead sponsor. Under the new law, the em-ployers' penalty will be up to 100 percent.

The law removes technicalities that required whistle-blowers to cite the section of the law that the employer broke. It also allows up to $10,000 in added penalties for employers who fire or threaten workers for speaking out.

''At long last, this puts real teeth in New York's labor law,'' said Andrew Friedman, co-director of Make the Road New York, an immigrants advocacy group that pushed for the bill, joined by the Retail, Wholesale and Department Store Union.

Opponents of the bill, which the Legislature passed largely along partisan lines, say it will simply create paperwork for employers who do not steal wages. ''Now all employers in the state have this new regime to prevent them from doing something the vast majority of them never think of doing,'' said Kenneth Adams, president and chief executive of the Business Council of New York State.

A national trend toward strengthening worker-protection laws has already taken hold in states like Massachusetts, New Mexico and Illinois, said Rebecca Givan, an assistant professor at the Cornell University School of Industrial and Labor Relations. She called the New York law ''a really big success for workers.''

Maria, a Mexican immigrant who asked that her last name be withheld because she was in the country illegally, said she had worked 70 hours a week at a lamp factory in Manhattan that denied her overtime for more than a year. Make the Road New York helped her recoup almost $10,000 this year. ''The new law is very great because this won't happen to someone else,'' Maria said.


LOAD-DATE: December 14, 2010

Targeted News Service, December 14, 2010, Tuesday

Copyright 2010 Targeted News Service LLC
All Rights Reserved
Targeted News Service

December 14, 2010, Tuesday

WorldatWork Announces 2011 Board of Directors

WorldatWork issued the following news release:

WorldatWork (, a not-for-profit human re-sources association with offices in Washington, D.C., and Scottsdale, AZ, has announced its newly elected 2011 Board of Directors.

The following individuals were approved by WorldatWork members to the Board for terms beginning January 2011:

Chair: Dave Smith, CCP, Vice President, Human Resources, AGL Resources
Vice Chair: Jeff Chambers, WLCP
Secretary/Treasurer: Karen Ickes, CBP, Senior Vice President, Human Resources, Wendy's International
Past Chair: Sara R. McAuley, CCP, WLCP
Board Members:
* Elizabeth Bastoni
* Trevor Blackman, Director, Reward Asia Pacific, Royal Bank of Scotland
* Kevin Hallock, Ph.D., Professor of Labor Economics and of Human Resource Studies and Director of Research for the Center for Advanced Human Resource Studies (CAHRS) in ILR School at Cornell University and Director of the Institute for Compensation Studies at Cornell
* Ann Hatcher, CCP, Vice President of Executive and Workforce Development Programs, HCA
* Desiree Isabelle Klein-Wagner, GRP, Executive Vice President, Global Reward & Performance, Allianz SE
* David Loucks, Vice President, Human Resources, Global Compensation, Benefits & Medical, Procter & Gamble
* Nathalie Parent, CCP, GRP, CSCP, Vice President, Global Human Resources, Corel Corporation

"Our board of directors comprises thought leaders and active practitioners who can help us anticipate what reward professionals need to be more effective," said Anne C. Ruddy (, CCP, CPCU, president of WorldatWork. "As the rewards profession becomes even more demanding and specialized, they will guide us on how to best adapt and adopt new ways to manage the changing landscape."

Contact: Marcia Rhodes, APR Media Relations, WorldatWork, 480/304-6885,
Copyright Targeted News Services
TNS cp-JF78-101215-3149592 StaffFurigay

LOAD-DATE: December 15, 2010

Bloomberg, December 8, 2010, Wednesday


December 8, 2010, Wednesday


U.S. Automakers, UAW Explore Expanding Profit Sharing
By Tim Higgins, Keith Naughton and David Welch

General Motors Co., Ford Motor Co. and Chrysler Group LLC, in advance of next year’s labor contract negotiations, are exploring with the United Auto Workers changes that could give workers a bigger piece of growing profits.

“We want to find the best possible bang for all of the employees, across the board, not a program that would pay some and not the others,” said General Holiefield, head of the UAW’s Chrysler department under President Bob King.

While formal negotiations haven’t begun, union leaders and executives from the automakers have broached profit-sharing changes, said two people familiar with the efforts. High-level discussions began months ago because it was deemed a significant issue that would require more time, said one of the people, who asked not to be identified because the talks were private.

All of the companies have been “hinting” at profit- sharing changes, Holiefield said in an interview Dec. 6.

It was “not just within Chrysler but the Big Three,” he said. “Bob King has got to get his arms around it.”

The union made mid-contract concessions last year, such as giving up full pay for idled workers, before the bankruptcies of Chrysler LLC and General Motors Corp. The UAW’s four-year labor agreements with three automakers expire Sept. 14, 2011, the union has said. Formal negotiations typically begin several weeks before the contracts expire.

GM, Ford and Chrysler go into next year’s negotiations seeking a deal that keeps the companies’ competitive with foreign rivals, while the union aims to ensure workers share in the upswing after making sacrifices, labor experts said.

Worker Rewards

“The companies want to try and reward the hourly workforce without bringing back some of the cost items that made them non- competitive,” said Art Schwartz, a former GM negotiator now doing labor management consulting based in Ann Arbor, Michigan.

Chris Lee, a GM spokesman, and Shawn Morgan, a Chrysler spokeswoman, declined to comment yesterday.

“At this point, it’s premature to talk about 2011 negotiations seeing that they are several months away,” John Stoll, a Ford spokesman, said in an interview yesterday. “We believe all stakeholders should benefit from the company’s success.”

Ford, the world’s most profitable automaker, in October reported a third-quarter net income of $1.69 billion and GM, which went public again in November, reported a third-quarter net income of $2.16 billion.

While Chrysler reported a net loss of $453 million through three quarters, the Auburn Hills, Michigan-based automaker’s results have been improving and the company has said it will be profitable in 2011.

Pattern Bargaining

The UAW is probably having similar conversations with the three automakers, said Arthur Wheaton, a Cornell University labor expert.

“It’s been the historical trend,” said Wheaton, who is based in Buffalo, New York. “For basically the last 60 years it’s been pattern bargaining, so whatever one gets, the others follow along. There have been some minor exceptions.”

Companies like profit sharing because it’s a cost only if they’re making money, Wheaton said.

“The current profit-sharing formula has been pretty ineffective,” he said in a telephone interview.

Payments have been small and sporadic because the companies haven’t been consistently profitable. “Part of it’s also the formula and how they base it,” Wheaton said.

Payout History

The union reached profit-sharing agreements with the three automakers in the 1980s, the UAW said.

Ford, which earned $2.72 billion last year, paid UAW members an average of $450 in profit sharing this year, Stoll said. That was the first for the union since Chrysler paid workers an average of $650 in 2006, the Detroit Free Press has reported.

“Around 2000, they were bringing home profit-sharing checks like $7,000,” Wheaton said of Chrysler workers.

Both GM and the UAW want to change the profit-sharing plan to make it more consistent, said one person familiar with the discussions. GM’s plan has paid out very little over the past 10 years, so the union wants to lower the profit threshold that allows workers to get paid, the person said.

At the same time, there is no maximum payout, so management wants to limit how much the company will pay workers in good years, the person said. Management also wants to link the profit-sharing plans to hourly and salaried workers so that neither side feels unfairly compensated, the person said.

Fairness Issue

One of the hourly workers’ concerns with profit sharing is that they must bear the brunt of cost-cutting while not seeing a large return, said Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts.

“The fear of profit sharing to the UAW has always been one of: You’re the junior partner in success and senior partner in failure,” he said

A comment made at a Ford factory last week underscores the desire of workers to avoid further givebacks.

“It is time to turn the page on concessions and get back the sacrifices of the past,” Grant Morton, a UAW official at Ford’s Chicago assembly plant, told a cheering crowd at a ceremony Dec. 1 to celebrate the start of Explorer production.

Union and company leaders talk to each other regularly, they have said.

“These are just exploratory discussions,” Chaison said.

‘Surface Talk’

Chrysler and the union are discussing a variety of issues beyond profit sharing, Holiefield said.

“There’s been nothing written in concrete, just surface talk,” he said. “Not just that,” he said of profit sharing. “We talk about improving everything. That’s just one element of our discussion.”

He didn’t specify those discussions or say how the profit- sharing formula might be changed to benefit all stakeholders.

“They’re always thinking about ways to improve the processes, about ways to improve the products and about what it would take to naturally keep the company afloat,” Holiefield said. “How the state of Michigan would benefit from that and how the employees would benefit from everything we do.”

To contact the reporters on this story: Tim Higgins in Southfield, Michigan at; Keith Naughton in Southfield, Michigan, at David Welch in Southfield, Michigan at

To contact the editor responsible for this story: Jamie Butters at

Yale Daily News, December 8, 2010, Wednesday

Yale Daily News

December 8, 2010, Wednesday

Yale Daily News

Harvard governing body under review

Harvard University is reconfiguring its highest governing body, the Harvard Corporation, to implement a structure similar to those currently in place at Yale and other major universities.

Advisers to the Harvard Corporation reforms said the changes were necessary adjustments to an outdated governing structure and were not inspired by Yale or any other specific institution. But top Yale officials say Harvard’s remodeled governing body incorporates effective structures employed in the Yale Corporation.

“I was very pleased to see that Yale already has in place the best practices being recommended by the Harvard Corporation,” Vice President and Secretary Linda Lorimer said. “I think this shows revolutionary developments in Harvard’s governance.”

The overhaul will nearly double the body’s size from seven to 13 members, including Harvard University President Drew Faust, and form committees to address finance, governance, facilities and capital planning. Harvard plans to bring in the additional six Corporation members over the next two to three years.

The Yale Corporation consists of 19 members, including University President Richard Levin, Connecticut Governor M. Jodi Rell and Lieutenant Governor Michael Fedele. Six of Yale’s trustees are alumni elected by fellow alums for six-year terms, while 10 are termed “Successor Trustees” because they appoint their own successors.

Margaret Marshall LAW ’76, Chief Justice of the Massachusetts Supreme Judicial Court, a former member of the Yale Corporation, and former vice president and general counsel of Harvard, said senior administrators at Harvard consulted her about the restructuring because of her previous involvement with both institutions. Marshall said she told them the Yale Corporation benefits from its size — small enough for all members to sit around one “fairly intimate” table.

“My sense is that the Yale Corporation, whether by an accident of history or anything else, is an extremely well-functioning corporation,” Marshall said. “The changes that Harvard and President Faust and the Corporation has recommended are very well-received.”

The restructured Harvard Corporation limits the service terms of members other than the president. Members could previously serve as long as they chose, but there was an “informal understanding” that they would step down after serving 12 years or reaching age 70 or 72, said Richard Chait, a professor at the Harvard Graduate School of Education that advised the Corporation on its changes.

Yale has set term limits on the Corporation’s trustees for decades, Lorimer said, and already possesses many committees comparable to ones Harvard has formed through its structural overhaul.

The Harvard Corporation also redefined the role of its senior fellow. Formerly the longest-standing member of the Corporation, the senior fellow will now be the “lead trustee” and not necessarily the most senior member, the Harvard Corporation Governance Review Committee report said. At Yale, trustees select the senior fellow, who holds the post for three to six years, Lorimer said.

“These revisions [at Harvard] are completely consistent with Yale, truthfully,” Roland Betts ’68, senior fellow of the Yale Corporation, said in an e-mail Tuesday.

Still, Seth Waxman LAW ’77, president of Harvard’s Board of Overseers and former solicitor general of the United States, cautioned against drawing too many parallels between Harvard’s and Yale’s highest governing bodies.

Harvard has two governing bodies: the Corporation, and a 30-member Board of Overseers, which is elected by alumni and tasked with periodically reviewing departments and schools and approving some Corporation decisions.

“The governing structure is so much different at Harvard than at Yale,” Waxman said in an interview Tuesday. “The Yale Corporation, as I understand it, is a single board of trustees, whereas the Harvard Corporation is one of two [board structures].”

Waxman said the seven-person board was far too small, and called the expansion of the Corporation “way overdue” for a university now far larger and more complex than it was in 1650, when Harvard first created the Corporation.

Ronald Ehrenberg, professor of labor relations and economics at Cornell University and a top higher education expert, said Harvard’s governing body was previously too small to oversee all matters it governed, forcing administrators to take over.

The Harvard Corporation undertook its reform — the first significant structural change to the organization since its inception — in fall 2009, the same year that the national economic crisis hit and Harvard’s endowment tumbled 27 percent.

Both Marshall and Ehrenberg said the national economic crisis affected many major universities and offered a natural chance to reevaluate governance. Marshall said she admired Faust for following through with a structural review.

“Every crisis is an opportunity, but not every crisis is seized as an opportunity,” Marshall said. “This is certainly one where President Faust has seized the opportunity.”

Ehrenberg said trustees at many universities do not feel “on top” of their schools’ financial situations. In the case of Harvard, Ehrenberg said, the University suffered from creating unrealistic capital investment plans based on unfulfilled expectations of annual giving, in addition to seeing a decline in the endowment.

The Yale Corporation has undertaken a full Institutional Review every five years since Levin instituted that practice in 1993.

San Jose Mercury News, December 6, 2010, Monday

Copyright 2010 San Jose Mercury News
All Rights Reserved
San Jose Mercury News (California)

December 6, 2010, Monday

Workplace safety most important to workers

BYLINE: By Melanie Wanzek, CTW Features

What's most important to workers? According to a recent study from the National Opinion Research Center at the University of Chicago, the answer is not minimum wage, maternity leave or even paid sick days. It's safety.

More than eight in ten workers rated workplace safety first in importance among labor standards. The study, "Pub-lic Attitudes Towards and Experiences with Workplace Safety," collected data from dozens of surveys and polls con-ducted from 2001 to 2010 by NORC. It found that about 12 percent of workers reported an on-the-job injury during the past year and 37 percent said they have required medical treatment at one time for a workplace injury. The study also revealed that many workers experienced job-related stress, which can contribute to injury.

Stay safe in your workplace with these tips from Nellie J. Brown, director of the Workplace Health and Safety Program at Cornell University ILR School.

1. Avoid unnecessary risks or shortcuts that jeopardize your safety. "Not only could you experience serious injury, but your employer pays higher costs for workers' compensation - a lose-lose situation," Brown says.

2. Complete all available safety training. This will help raise your awareness to the hazards of your job and the jobs of co-workers around you who could potentially endanger you, too.

3. Voice your concerns. If you see others engaging in unsafe behavior, don't hesitate to mention it in a respectful way. Brown suggests offering solutions with observations for effective outcomes. Solutions are often simple but some-one must speak up to for a change to take place.

4. Use all engineering controls and personal protective equipment that your employer provides. Hearing protection in particular often goes unused, which can result in significant hearing loss and a lower quality of life over time.

5. Eat well, sleep enough and exercise. Take care of yourself and do things you enjoy to help your body and mind sustain occupational stress and avoid injury.
? CTW Features


LOAD-DATE: December 6, 2010, December 3, 2010, Friday

Copyright 2010 Gale Group, Inc.
All Rights Reserved
Copyright 2010 Accretive Capital LLC dba

December 3, 2010, Friday

Center Bancorp, Inc. Reports Resignations of Two Board Members and Appointment of New Director

Nasdaq: CNBC) (the "Company"), parent company of Union Center National Bank ("UCNB" or the "Bank"), announced that at its board meeting dated November 30, 2010 John J. DeLaney and Elliot Kramer have resigned from the Boards of Directors of the Company and the Bank, effective December 1, 2010.

The Board also announced, Alan H. Straus was appointed to the Boards of Directors of the Company and the Bank. Mr. Straus is currently the portfolio manager for
Omega Advisors, Inc., an investment management firm run by Leon Cooperman, one of the leading value investors inthe country. Mr. Straus has more than 20 years of experience as a research analyst and portfolio manager for several leading investment firms.

Mr. Straus will stand for election at the Company's 2011 annual meeting of shareholders.

Mr. Straus holds an MBA, Finance from the Cornell University, Johnson School of Management and BS from Cornell University, School of Industrial and Labor Relations.

"Mr. Straus exhibits the qualities that will bring added depth anda mix of expertise to the Company during a period of accelerated change in our industry," said Alexander A. Bol, Chairman of the Board.
Center Bancorp

Center Bancorp, Inc. is a bank holding company which operates Union Center National Bank, its main subsidiary. Chartered in 1923, UnionCenter National Bank is one of the oldest national banks headquartered in the state of New Jersey and currently the largest commercial bank headquartered in Union County. Its primary market niche is its commercial banking business. The Bank focuses its lending activities on commercial lending to small and medium-sized businesses, real estate developers and high net worth individuals.

The Bank, through its Private Wealth Management Division, which includes its wholly-owned subsidiary, Center Financial Group LLC, provides financial services including brokerage services, insurance and annuities, mutual funds, financial planning, estate and tax planning, trust, elder care and benefit plan administration.

The Bank currently operates 13 banking locations in Union and Morris Counties in New Jersey. Banking centers are located in Union Township (6 locations), Berkeley Heights, Boonton/Mountain Lakes, Madison,Millburn/Vauxhall, Morristown, Spring-field, and Summit, New Jersey. The Bank also operates remote ATM locations in the Chatham and Madison New Jersey Transit train stations, and the Boys and Girls Club of Union.
While the Bank's primary market area is comprised of Union and Morris Counties, New Jersey, the Corporation has expanded to northern and central New Jersey. At September 30, 2010, the Corporation had total assets of $1.2 billion, total deposit funding sources, which includes overnight repurchase agreements, of $873.3 million and stockholders' equity of $122.2 million.
For further information regarding
Center Bancorp, Inc.,
visit our web site at
or call (800) 862-3683. For information regarding Union Center National Bank, visit our web site at
CONTACT: Center Bancorp, Inc.
Investor Inquiries:
Anthony C. Weagley, President & Chief Executive Officer
(908) 206-2886
Joseph Gangemi
(908) 206-2863

LOAD-DATE: December 7, 2010

HR Magazine, November 2010

HR Magazine

November 2010

HR Magazine

What to Do About Substance Abuse

Vol. 55 No. 11
You employ your share of an estimated 14 million U.S. workers who abuse drugs and alcohol. Here’s how to help them—and protect your company.

Bob Poznanovich knows he has no one to blame but himself for his flameout as a highflying 30-something executive. Still, he wonders what might have been if his employer had treated him differently.

He was vice president for sales and marketing in the computer division, "making good money, hanging out with movers and shakers," he says. "When I went to parties, I saw bankers, lawyers, pro athletes and business leaders, and they were all using cocaine, the drug of choice at the time. … I started using it, too. Soon, I was spending $1,000 a day, getting high on the job with employees, even with customers. It took over my life."

Poznanovich’s bosses at Zenith—now LG Electronics—knew he was a substance abuser. Yet he lived that way for more than a year before he was fired. Later, an HR professional told him that managers at the company held almost 50 meetings where they debated how to handle their star addict. "They didn’t know what to do with me," he says. "Analysis became paralysis. They never talked to me until they decided to fire me."

Poznanovich, now executive director of business development for Hazelden, an addiction treatment center in Center City, Minn., says his employer’s reluctance to confront him was a mistake. "I was having a big impact on revenues, margin, other employees and stakeholders. I wasn’t showing up for work; I was late; I was distracted." Had managers warned him, "I would have run out and gotten help," he says. "My job and status as an executive was key to my self-image."

Persistent Problem

According to 2008 data from the federal Substance Abuse and Mental Health Services Administration, 10.2 percent of full-time employed adults and 11 percent of part-time working adults are substance-dependent. Of these approximately 14 million workers, about 85 percent are hooked on alcohol alone or on alcohol and drugs; 15 percent abuse drugs only. The percentages have stayed fairly steady since 2002. Marijuana remains the most popular drug; use of cocaine and ecstasy has dropped, but use of prescription painkillers is increasing rapidly.

Workers in industries such as food services, construction and accommodations are more likely to use drugs and alcohol; those in industries such as utilities, education and public administration are less likely. More men than women are substance abusers. These high-risk workers don’t include the millions more who use drugs or alcohol at home or work but who do not exhibit characteristics of dependence or addiction.

Convincing Business Case

Substance abusers are a debilitating drain on resources and productivity. They use more sick days, show up late more often and stay in jobs for shorter amounts of time. They’re three-and-a-half times more likely to cause accidents at work and in transit. Their health care costs are double their peers’.

Weaning even a few workers from addiction or abuse can positively impact a business. "If one looked at all the sources of savings, a return on investment of 10-to-1 for an alcohol or drug case would not be unreasonable," says Tom Amaral, president of EAP Technology Systems Inc., a Yreka, Calif.-based vendor of software and services to employee assistance programs. Those savings come from decreased health care claims, decreased absenteeism and increased productivity.

Success stories abound, yet attempts to identify, treat and support meaningful percentages of employees who have drug or alcohol problems continue to prove frustrating.

Beginning in the 1960s, when drug and alcohol dependence at work became a national concern, employers turned to employee assistance programs (EAPs). The programs tended to be internal operations staffed by counselors who often had been through recovery themselves and could offer confidential guidance.

Later, spurred by high-profile accidents and mistakes made by impaired workers, federal officials stepped in to protect the public. Today, employers in certain safety-sensitive industries operate under government mandates that require drug testing and the establishment of drug-free workplace policies and programs; these employers are more aggressive about identifying and firing or treating abusers. However, Edward Trieber, managing director of Harris, Rothenberg International, a regional EAP in New York, estimates that safety legislation covers fewer than one-fifth of employers.

First Line of Defense

EAPs have been embraced by business leaders for 25 years and still provide a first line of defense. Seventy-five percent of employers offered EAP coverage in 2009, up from 31 percent in 1985, according to the Employee Assistance Society of North America, in Arlington, Va. Most large and mid-size organizations provide EAPs for employees as well as their families. About 2,400 EAPs serve roughly 90 percent of North American workers.

Unlike other providers of mental health services, such as psychiatric hospitals or substance abuse clinics, EAPs partner with employers. Guided by an "EAP Core Technology" defined by the Arlington, Va.-based Employee Assistance Professionals Association, EAPs’ mission is to improve and maintain the productivity and healthy functioning of the workplace.

Six or seven large EAPs dominate about 80 percent of the market; among them are ComPsych Corp. in Chicago and Ceridian Corp. in Minneapolis. "We’ve seen ‘a Wal-Mart effect’ on what used to be small, professional-based EAPs," says Dave Sharar, managing director of Chestnut Global Partners, a regional EAP in Bloomington, Ill. Now, "all the largest employers are giving their business to mega-vendors who are offering health care coverage under one umbrella. The argument is that it is cheaper."

Competing with the big guys are regional players such as Chestnut and Harris, Rothenberg. A small number of facilities, such as New York City’s Mount Sinai Medical Center, run EAPs that either serve their employees exclusively or cover a few other companies’ employees as well to defray costs.

Responsibility for the EAP usually falls to HR. Depending on size and sophistication, it could be housed under a benefits specialist or a medical officer.

Employees with substance dependence issues can use their EAP on their own initiative or in response to a supervisor’s suggestion. If employees fail a random drug test or one ordered after a finding of reasonable suspicion, they can be required to contact the EAP as a condition of employment or for approval to return to work. They can seek treatment outside the EAP. Most just continue to work without addressing the problems.

Not Getting It Done

What impact are EAPs having on identifying and treating workers with substance dependence? The statistics tell an unsettling story. According to metrics from the national EAP Data Warehouse, EAPs receive on average 1.6 employee alcohol referrals and 0.5 drug referrals per 1,000 employees each year. That translates to about 18,000 alcohol and 5,600 drug referrals nationwide annually.

If you assume conservatively that EAPs are available to about 80 percent of the 14 million employees in need of treatment, that means EAPs are reaching only 0.02 percent of these workers.

Furthermore, most EAPs do a poor job of identifying alcohol and drug problems for employees who use EAPs for other reasons, says John C. Pompe, SPHR, manager of disability and behavioral health programs for Caterpillar Inc. "Unless someone calls the EAP specifically to request alcohol or drug treatment—and few do—substance abuse problems will go unnoticed,"

Fortunately, many workers find treatment through other avenues. For example, a federal study revealed that in 2008, 341,130 full-time employees received treatment for substance abuse. Of those, 52.7 percent were referred by courts or criminal justice systems and 26.3 percent were self-referred. Only 2.2 percent entered treatment via employers or EAPs.

Why Employers Look Away

Even with screening and zero-tolerance policies, the incidence of substance abuse in the workforce has remained steady at about 10 percent for the last decade. Why are employers accepting so little progress? Why are they settling for safety risks, productivity losses and skyrocketing health care costs? Here are some reasons:

Unwanted publicity. Giving more attention and resources to identify, treat and help addicted employees return to the workforce could damage an employer’s corporate image.

Financial commitment. Combating substance abuse can be costly—and outcomes modest. Some employers say it is better to live with losses from alcohol and drugs and to direct resources instead toward mitigating other diseases such as obesity and diabetes.

Opportunity costs. Training supervisors in performance management—so they can, for example, confront workers when needed—takes commitment of resources. Even when EAPs bundle training on evaluation and progressive discipline techniques into their contracts at no additional cost, few employers use the features. "We badger our clients to do the training," Sharar says. "Only 30 percent to 40 percent agree."

Repeat offenders. The same person often must be treated multiple times, says Dr. Jeff Levin-Scherz, a senior consultant for Towers Watson in Boston. And, employers decry the seeming waste of resources on repeat offenders, despite the fact that multiple treatments are just as frequent in other chronic diseases they support without complaint, says Dr. Brent Pawlecki, Pitney Bowes’ corporate medical director.

Societal problem. Citing the impetus to legalize marijuana and the pervasiveness of alcohol, some U.S. employers conclude that trying to deal with dependency is futile.

Not a disease. Despite research to the contrary, employers say that defining substance abuse as a disease is politically correct but inaccurate. Substance abusers, they say, are not sick; they’re making choices.

Counter to company culture. Supervisors and colleagues abhor telling on others and see it as "ratting them out."

Legal constraints. Employers are confused about their responsibilities under the Americans with Disabilities Act and fearful of costly discrimination cases. The act makes it illegal for employers to discriminate against recovering alcoholics and drug users.

Sad Truths

Why do EAPs have so little to show for their commitment to work with employers, combat substance abuse and increase productivity?

Cost vs. value. The employer negotiates services based on per-employee fees ranging from $12 to $30. The cost, in comparison to expenditures on health insurance, remains minimal. Under this "capitation" model, however, the more an EAP does—and drug and alcohol abuse cases require more—the less it profits. The incentive, then, is to do as little as possible while making it appear to employers that the EAP does more.

EAPs "restrict access, cherry-pick the low-maintenance cases and avoid the high-maintenance ones," says Dan Hughes, director of the employee assistance program at Mount Sinai Medical Center and head of the research subcommittee for the Employee Assistance Professionals Association. "Everyone in the field knows that’s the case."

Altered emphasis. To compete, EAPs have added less-costly services to attract more employees. They surround the drug and alcohol portfolio with wellness, marital, family, financial, legal and emotional counseling, plus provide stress reduction and find pet sitters, baby sitters and tutors. The EAP Data Warehouse reports that only 3.4 percent of employees covered by EAPs contact them for mental health issues. In this way, EAPs have gotten away from their core function, Pompe explains.

EAPs with laundry lists of services dominate the market and de-professionalize the field, Hughes says. "EAPs are being sold on wellness and coaching. They’re supposed to follow a professional services model—help the employer solve complex, difficult problems that are linked with a number of mental health issues," he adds.

Networks without EAP grounding. The majority of EAPs rely on external networks of certified psychological or drug counselors or social workers who receive referrals from a central phone intake unit. Most are not attuned to the EAP mission. "You need someone who is intimately involved with the work organization," says William Sonnenstuhl, an associate professor at Cornell University’s R. Brinkley Smithers Institute for Alcohol-Related Workplace Studies in New York.

For example, clinicians are not necessarily trained "in the focus on productivity as it relates to mental and behavioral health," Hughes says. "They don’t have a firm grounding in the core technology—the constructive confrontation and the role the employer plays in the treatment." In constructive confrontation, a supervisor meets with the employee and ties the employee’s workplace behavior to consequences such as job loss.

Dead-end treatment. The typical EAP contract offers mental health referrals for one to six sessions with a clinician. From the employee’s perspective, it’s free and confidential; there are no payments, no deductibles. The company pays the capitation fee. The clinician, in theory, determines the next referral and the specific provider. If continuing treatment is advisable and the employee has insurance, the insurer enters the picture. But that rarely happens. Most cases end with the free sessions. Clinicians refer out less than 10 percent of the time, Sharar says. Even when they do make a referral, the client often fails to follow through, guaranteeing that in more than 90 percent of the drug and alcohol cases that actually reach the EAP, neither the employer nor the insurer will know the person has a dependency problem.

The scenario changes when the employer knows the employee is seeking help and is asked to assist and support rehab and re-entry. Consider the difference in results: "You’re looking at a 13 percent to 15 percent cure rate without employer involvement," Sonnenstuhl says. "The success rate is 75 percent to 80 percent when the employer plays a role." But that rarely occurs. At ComPsych—the country’s largest EAP, serving 13.2 million employees and their families—only 300 to 400 employees authorize the EAP to share treatment details with employers each month, says Clinical Director Ewa Antonowicz.

Uneven intake. Though employees who contact EAPs for reasons other than drug or alcohol abuse may have underlying substance dependency problems, most go undetected. "EAPs do a very poor job of case-finding for alcohol and drug problems," says Eric Goplerud, a research professor at The George Washington University. "Unless someone calls the EAP specifically to request alcohol or drug treatment, in most instances substance abuse problems go unnoticed." Goplerud directs a research and communication initiative to fight alcoholism.

Poor follow-through. EAPs lack case management, Pompe says. Most risk of relapse occurs within the first 120 days in recovery, yet there is often no follow-up during that period, Sharar notes.

Best-practice EAPs monitor cases for up to a year, says Mandie Conforti, a senior consultant at Towers Watson in Chicago.

Harris, Rothenberg counselors usually call employees monthly, asking, "Did you go to counseling?" says Beatrice Harris, managing director.

Hyped metrics. To justify their fees, some EAPs flood employers with reports highlighting the number of employee contacts per month or per quarter. Often, instead of tracking cases, EAPs report each employee communication; numbers become inflated when one person makes many inquiries. Furthermore, services that attract inquiries may be low-maintenance, yet all inquiries get lumped together.

The Skinny on Substance Abusers

And what of the workers who need help? Why don’t they take advantage of EAPs? Two main reasons: denial and confidentiality concerns.

Many substance abusers are in denial and refuse to seek help voluntarily. They reject the idea that they have problems or that their addiction is visible. Addicts "try to hide what we do from people at work or home who would care," says Mark Weingart, a recovering addict and financial industry trader in San Francisco.

Other substance abusers don’t trust in confidentiality from EAPs, insurers or in-house counselors, despite assurances. At ComPsych, "We’ve never had a case where we leaked it. We won’t communicate with the employer unless a release is signed. And the employee can revoke it," Antonowicz says.

Still, Terry Shapiro, executive director of the Hazelden Sober Residence in Chicago, says his clients are sensitive to the stigma of being labeled an addict or alcoholic and fear retaliation. "Most bypass the EAP and seek help on their own. They fear the shame of letting their employer know." Only about one-third of those covered by insurance for treatment submit claims.

What HR Professionals Can Do

Unless they are well-trained, supervisors often let substance abusers fly under the radar until they’re forced to act after a failed drug test, accident or embarrassing incident. In addition, EAP managers and clinicians have scant motivation to pay attention to high-maintenance substance abuse cases for the reasons mentioned earlier. Therefore, HR leaders have important roles to play in choosing and monitoring EAPs—and they can’t pass the buck when EAPs perform poorly. "EAPs are tools of HR," Pompe explains. "When the job doesn’t get done, it’s too easy for HR to blame the EAP."

Don't Fear Litigation

HR professionals often cite the Americans with Disabilities Act or other perceived legal threats as reasons for not intervening.

"Substance dependence is a disability, but that doesn't mean you have to keep someone or can't discipline them. The person has to be able to perform," says Charles J. Lattarulo, clinical director at Harris, Rothenberg International, a regional employee assistance program.

Under the act, employers cannot fire, refuse to hire or refuse to promote someone solely because he has a history of substance abuse or enrolls in rehabilitation.

Here’s how HR professionals can have impact:

Practice tough love. "If somebody has a problem and it’s affecting their work, it becomes pretty apparent," Weingart says. But employers have a tough time facing unpleasant situations.

Don’t overlook HR responsibilities. HR professionals’ interest in making strategic contributions to their companies has consequences, says Sonnenstuhl. Previously, HR professionals "focused on training and helping workers and supervisors. All this stuff is getting short shrift these days."

Make performance evaluation a priority. Supervisors must be trained to monitor performance daily and to become skilled in identifying problems, Sonnenstuhl says. "Train them to give progressive discipline so at-risk workers have a chance to get help. Today, it’s summary discipline. The message is: ‘Test this guy; if he’s positive, fire him.’ "

Harris, Rothenberg includes manager training costs in its fees. The training focuses on how to identify behaviors that may be typical of addicts, how to document such behavior and how to confront people. Managers express relief "when they learn there’s a way to deal with their situations," says Harris.

Foster constructive confrontation. Work with supervisors to increase referrals. "I’ve never found a company that confronted an employee where the employee didn’t agree to help," says Poznanovich. "I’ve never seen an employee choose alcohol or drugs over his job."

Adds Weingart: "Until you suffer enough consequences, you’re never going to stop. Why would I stop if life wasn’t so bad? Sometimes, doing something that’s perceived as negative for an addict or an alcoholic is exactly what they need."

Test. There’s no escape for employees who fail drug tests at the large regional energy company with 16,000 full-time employees where Edward Kavanaugh serves as senior HR specialist. If an employee tests positive, Kavanaugh talks with his or her supervisor and an HR business partner. Then, the HR business partner, the supervisor and sometimes a union representative meet with the employee to discuss violation of the drug-free workplace policy. The worker faces automatic suspension without pay for 30 days. For alcohol, the suspension is 24 hours. The person has 48 hours to contact the EAP and can’t return to work until he or she is released by the EAP.

"Employees are our asset," Kavanaugh says. "We get them help because substance dependence is a known illness." But there are limits to the commitment; Kavanaugh says the company isn’t interested in being an enabler. "In most situations, it’s one bite of the apple," he explains. "After that, you’re out."

At Mount Sinai Medical Center, a nurse who tests positive is confronted immediately and removed from the workplace. "She’s entitled to get appropriate care and then apply for reinstatement," Hughes says. "The job is the most compelling lever we have in treatment. To rejoin the staff, she must sign a ‘last-chance agreement,’ agreeing that if she commits another violation she is automatically terminated." With their licenses and their jobs on the line, he says, more than 75 percent of nurses do well when they return.

Let experts do their jobs. Remind supervisors never to make diagnoses; only mental health professionals are competent to do so. Judge and document conduct and performance; leave the reasons why to experts.

"I discourage people from telling the supervisor what their problems are," Pompe says. "Supervisors shouldn’t want to know because it compromises their ability to supervise. If they have to take a negative action, the person can claim you knew and discriminated against him."

Select EAPs carefully. Employers should look for best practices and look behind utilization statistics in marketing pitches. Beware of buying based on price. Ask questions, do a site visit, talk to clients. Find out how easy it is to reach counselors; check how they publicize their presence. Are intake staff and counselors certified? Are they trained in EAP technologies?

Demand meaningful metrics. Currently, few EAPs produce metrics that offer a clear picture of how well they find and handle substance abuse cases. Require metrics that will enable you to monitor performance.

Well-crafted programs can be remarkably effective, but you’ve got to be committed, Sonnenstuhl says. "If you make your EAP accountable and commit to constructive confrontation, you can clean up your drinking and drug culture and invigorate your organization."

Go at it full-bore. "Don’t fool yourself by thinking a window-dressing approach will cut it," Pompe concludes. "If you want to have an impact, you need a comprehensive strategy."

The author, a contributing editor of HR Magazine, is a lawyer and a professor of management studies at Marist College in Poughkeepsie, N.Y.

Discuss your experiences regarding employee drug testing, drug treatment and medical marijuana issues with your peers. Share your experiences, expertise and best practices.

Thursday, December 02, 2010

ECN Magazine, December 1, 2010, Wednesday

ECN Magazine

December 1, 2010, Wednesday

ECN Magazine

Convey trust with voice, professor urges

By Mary Catt
So many insecurities, so little trust. In today's stressed workplace, pitch and volume of conversations matter, according to new research.

"If you trust more, you use more emphasis, which is a combination of loudness and pitch," said Michele Williams, assistant professor in the ILR School's Department of Organizational Behavior.

"A range of volume and pitch is important -- it helps the listeners by saying, 'This is important.' If you're really interested, it's very hard to speak at the same level," Williams said.

Williams and colleagues at the Massachusetts Institute of Technology used observation and voice recordings -- sorted by computer algorithms measuring pitch and volume -- to follow information transfers among 29 nurses in the break room of a 30-bed surgical unit in a New England hospital.

Trust communicated through emphasis helps drive accuracy -- an important implication for hospitals, where communication breakdowns are considered the cause of most preventable errors, said Williams and MIT researchers Benjamin Waber, John Carroll and Alex Pentland.

"Once people try to understand each other, they start to communicate more clearly," Williams said.

The findings, detailed in a paper titled "A Voice Is Worth a Thousand Words: The Implications of the Micro-coding of Social Signals in Speech for Trust Research," will be published next year by Edward Elgar Publishing in a book on researching trust.

Williams was an undergraduate at Johns Hopkins University when she first became intrigued by trust. Working in the campus hospital, she was alarmed by the conflicts among doctors, nurses and therapists. She went on to build much of her career as a social scientist around the issue of workplace trust.

"Few people think about the information carried in their voices," Williams said.

When not under stress, practice communicating trust with your voice, she advises. Then, you'll be ready to communicate trust when you need it most in the workplace -- when competing insecurities collide.

"It is much harder to repair trust than to build and maintain it," Williams said.

Workplace hyper-vigilance -- such as copying numerous people on an e-mail, monitoring the tasks of others and second-guessing -- sap mental energy, she said.

Williams advises that a more constructive way to build trust with co-workers could be by paying attention to the way you talk.

Mary Catt is a staff writer in the ILR School.

BNA Daily Labor Report, November 29, 2010, Monday

BNA Daily Labor Report

November 29, 2010, Monday

BNA Daily Labor Report

Election Had Little Impact on DOL Agenda
Official Says During Webcast Discussion

The recent midterm election results will not have a major impact on the Labor Department's agenda in the near term, despite the changing makeup of Congress, Deputy Labor Secretary Seth Harris said Nov. 29.

Speaking with Dean Harry Katz of Cornell University's Industrial and Labor Relations School as part of a Cornell-sponsored series of policy webcasts, Harris said the election results were “not a ratification of the view that we have to drastically slash government spending,” and that DOL programs to foster job creation and help workers will continue.

“No one lost jobs because of radical government spending,” Harris said. He added that DOL is “not really a job-creating agency,” but it can help ensure that unemployed workers transition smoothly into new jobs through apprenticeship and on-the-job training programs, for example.

“Our agenda hasn't changed” because of the new makeup of Congress, Harris said. But, “the question we will now face is how we're going to negotiate with the House and Senate over their role in us implementing our agenda.”

‘Dialogue With Appropriators.'

Describing that process as a “give and take” with lawmakers, Harris said the department would “be in a dialogue with our appropriators” about which DOL programs work best and are most successful in achieving their goals.

“It will be incumbent on us to communicate effectively how we're making workers' lives better,” Harris said.

The department's goal of “making workers' lives better,” Harris said, was reflected in its recent release of a five-year strategic plan (193 DLR A-11, 10/6/10).

“The government spends a lot of time talking about itself and not enough about the people it serves,” Harris said. The DOL strategic plan, he said, was designed to redirect the department's focus on workers' needs, especially through its emphasis on measuring outcomes of DOL's worker protection agencies.

Asked for a response to criticism that the department is unfriendly to businesses because it seeks to impose burdensome regulations on them, Harris said he was “perplexed” by such assertions because many of the laws enforced by DOL have been in effect for decades. For example, the Fair Labor Standards Act has been on the books for upward of 75 years, Harris said.

“We're not creating a huge mountain of new regulations for employers” to follow, Harris said. “The goal is to achieve compliance” with existing laws, and “there are many strategies” to do so, he said.

‘Not Interested in a Gotcha Game.'

For example, Harris said, DOL's Occupational Safety and Health Administration funds a program targeting small business compliance with the OSH Act. In addition, all of DOL's agencies provide “a mountain of compliance material” on their websites.

“We're not interested in a gotcha game,” Harris said. “We want to ensure compliance with the law,” he said, adding that human resources professionals could play a large role in that effort, especially when it comes to employers reconciling compliance with labor laws with “profit-making strategies.”

Other areas touched on by Harris during the hour-long discussion included the department's programs targeted at veterans. The department was seeking to partner with the Department of Veterans Affairs and other agencies to “help veterans transition to civilian employment,” Harris said, and emphasized that most one-stop career centers, funded through the Workforce Investment Act program, provide priority services for veterans.

Harris said that President Obama likely would be announcing additional programs to promote veterans' employment “in the next few months.”

Harris also emphasized DOL's efforts to help workers with disabilities obtain services through the workforce investment system, as well as the need to meet older workers' job training needs as they transition into new roles as a result of the economic downturn.

By Michael Rose
Video of the webcast may be accessed at


Contact us at or call 1-800-372-1033

ISSN 1522-5968
Copyright © 2010, The Bureau of National Affairs, Inc.. Reproduction or redistribution, in whole or in part, and in any form, without express written permission, is prohibited except as permitted by the BNA Copyright Policy.

Democrat and Chronicle, November 19, 2010, Friday

Democrat and Chronicle

November 19, 2010, Friday

Democrat and Chronicle

Gas pains

On Oct. 3, the Federal Reserve announced it was going to buy $600 billion in Treasury notes, injecting more money into the economy and weakening the purchase price of the dollar. That pushed up oil prices. And gas prices went up almost immediately at the pump, crawling their way north of $3. Today in the Rochester area, a gallon of regular costs, on average, around $3.08.

But waitaminute, one apoplectic D&C reader emailed me - the gas at the gas stations is already paid for, so why is its price going up? In essence, why do gas prices go up almost immediately if there’s some change in the commodity price of oil? Good question. One that I then posed to Art Wheaton, director of Western New York Labor and Environmental Programs for Cornell University’s Industrial Labor Relations School and an auto industry expert.

What is happening at the pump, Wheaton said, “is not price gouging, at least under the legal definition.” Instead, he said, what you see is fuel prices moving to match some estimate of what the replacement costs of a gallon of gas being sold today will be. In other words, if you buy a gallon of gas at your local Esso station today, that station is charging not what that gallon costs but the distributor’s or wholesaler’s or gas station corporate owner’s estimates of what it will take to replace that gallon when the big gas tanker truck next comes. (Impacting the cost of a gallon of gas is everything from delivery expenses to taxes to the fact New York state has different blends of gas in warm and cold months).

That all seems relatively reasonable. Until you get to the reality that while gas prices go up pretty quickly when oil prices go up, gas prices are faaaarrrrr slower to go down when the price of oil heads south. All of which might help explain the incredible profitability of such companies as Exxon Mobile and BP.

BNA Daily Labor Report, November 19, 2010, Friday

BNA Daily Labor Report

November 19, 2010, Friday

BNA Daily Labor Report

Independent Contractors
Labor Solicitor Says Proposed Rule On Misclassification Is ‘Not Imminent'

NEW YORK—Issuance of a Labor Department notice of proposed rulemaking on employee misclassification is “not imminent,” although the issue remains a high priority for the department, Labor Solicitor M. Patricia Smith said Nov. 18.

Speaking at an enforcement update program sponsored by Cornell University, Smith noted that the proposal, which would amend Fair Labor Standards Act recordkeeping rules, was listed on the DOL spring regulatory agenda in April. But a final draft is not complete, she reported.

“It's a long way from the scribe's hand at the Labor Department to publication in the Federal Register, even for a proposed rule,” she said. “Many eyes will look at it, and what ends up in the proposed rule, or whether that proposed rule will be published, remains to be decided.”

Calling the project one of the highest priorities of Labor Secretary Hilda Solis, Smith suggested that “there will be a rule, in one form or another.” If it takes the form of a notice of proposed rulemaking, she said, that “would probably be in the spring” of 2011, she said.

Smith recommended a DOL webpage on the plan and encouraged comments from both the employer and the employee sides. “We really want to hear from people,” she said. “We take these comments very seriously.”

Among other things, the rulemaking project would require an employer that is making a classification to decision to complete a written analysis, notify the employee, and retain the analysis as an FLSA record, Smith said. It would also require wage and hour information on pay stubs, she added.

Asked about certain details in the draft, however, Smith declined to elaborate, calling it “definitely a work in progress.”

Collaboration With States, IRS

As part of its effort to step up misclassification enforcement, DOL has joined with more states in memoranda of understanding for data-sharing, cross-referrals, and joint enforcement, Smith reported. The Obama administration budget proposal calls for $25 million in grant money to aid states in misclassification enforcement, she said.

“Historically, the states have been ahead of us on this,” she said. “We want to learn from them and increase our cooperation.”

DOL is also in discussions with the Internal Revenue Service on making misclassification cross-referrals, Smith said.

Although the IRS cannot share individual tax return information, “they have data from audits that we can use” to better target industries or geographic areas for enforcement, she said.

The talks with the IRS remain in an early stage, Smith suggested.

Regional coordination is also part of the enforcement plan, with a designated misclassification “expert” assigned to each DOL regional solicitor's office, Smith reported.

UI Rule Changes to Help State Audits

The department also will be changing federal unemployment insurance rules to make it easier for states to better target its UI audits for misclassification, replacing a random audit system intended to cover 2 percent of employers annually, she said.

With the states borrowing billions from the federal government to cover UI shortfalls, they both “have an interest in making sure taxes are being paid into the trust funds,” Smith added.

Although the IRS cannot share individual tax return information, “they have data from audits that [DOL] can use” to better target industries or geographic areas for enforcement, Smith said.

On the federal legislative level, Smith said she “would not be surprised” if Congress were to pass a bill to tighten misclassification enforcement, given the potential it would offer to increase tax revenues.

Identical misclassification bills have been introduced in the House (H.R. 5107) and Senate (S. 3254), and another Senate bill (S. 2882) would close a tax law safe harbor for employers hiring independent contractors (129 DLR A-12, 7/7/10).

“Any bill that purports to put more money into the Treasury is more likely to pass,” Smith said.

In another update, Smith said in response to an audience question that the department is “looking very closely at alternative business models” such as franchise relationships, in which it can be unclear what entity employs the workers.

Investigators are being trained to familiarize themselves with an industry's employment relationships “so they'll know what questions to ask” when they look into a franchise operation. Strategies are also being considered to “go up the food chain” to determine ultimate responsibility for employment relationships in a workplace or industry, she indicated.

New York Enforcement

In a presentation on state enforcement, Jennifer Brand, executive director of the New York Joint Enforcement Task Force on Employee Classification, reported that 19 other states have started similar task forces since the New York project's launch in September 2007.

A nine-state regional council also has been established to compare notes and share information, Brand said.

In three years, she reported, the New York effort has uncovered $500 million in unreported wages through enforcement coordination by state agencies.

In one tool, wage cases are now routinely analyzed for tax and UI implications, Brand said. “We're not leaving half the case on the floor anymore,” she said. “We're making sure the workers get their money and the government gets its money too.”

To address “rampant” misclassification and off-the-books employment in construction, Brand reported, the state in August enacted a law setting out new requirements for construction employers to fulfill to rebut a presumption that all their workers are employees (169 DLR A-8, 9/1/10).

The Construction Industry Fair Play Act lays out a three-part “ABC” test to determine whether a worker is an employee or an independent contractor and carries fines of up to $2,500 per misclassified employee, she said.

‘Minefield’ for Employers

Laurie Berke-Weiss, a partner in the New York law firm Berke-Weiss & Pechman, warned management attorneys that “your clients may need you more than ever to navigate through a minefield that has become more dangerous.”

Employee classification violations “have always been costly,” she said, “but enforcement agencies are really getting together to get their piece of the money.”
The business models of some employers could come under greater scrutiny, Berke-Weiss continued.

“Some employers are treading on dangerous ground, and we need to steer them away from that,” she said. “The mere fact of having a written agreement [for an independent contractor relationship] does not get you off the hook.”

Federal and state DOL websites, Berke-Weiss added, “have enough information on this to make you an expert, if you take the time.”

But the factual situations can be quite complicated, she warned. “The relationship is not defined but what the participants call it,” she said. “It depends on the facts. But no one set of facts is conclusive.”

Employers need to ensure that their hiring practices withstand the necessary tests, but the tests “are circular, with no bright line they can look to,” Berke-Weiss said. Moreover, conflicts in the case law can complicate the picture, she said.

Urging practitioners to familiarize themselves with their clients' businesses to better understand the totality of the circumstances, she said: “You have to decide what the best course is to recommend to your clients, and it's not always an easy call.”

The event was presented by the Cornell ILR School's New York-based Labor and Employment Law Program, in conjunction with Cornell Law School.

Buffalo News, November 19, 2010, Friday

Buffalo News

November 19, 2010, Friday

Buffalo News

GM's new stock hits the road at full speed
Initial public offering may wind up ranking as largest in historyBy Matt Glynn and David Robinson

General Motors returned to public trading in robust fashion Thursday, following an initial public offering that raised more than $20 billion.

GM's stock closed at $34.19 on the New York Stock Exchange, after opening at $33 per share when GM CEO Daniel Akerson rang the opening bell. GM's initial stock offering could wind up as the largest in history.

The government, the largest seller of GM shares, hopes the sale will be the first step toward ultimately breaking even on last year's bailout. That would require the government to sell its remaining GM holdings for roughly $53 a share over the next several years.

Ron Bloom, the Obama administration's senior adviser for the auto industry, refused to predict whether taxpayers would get all the money back. "We're obviously eager to get the rest of it back as much as we can," he said.

President Obama said the early results validated his administration's $50 billion taxpayer-backed rescue of the automaker. "Today, one of the toughest tales of the recession took another big step toward becoming a success story," the president said after the first day of trading.

The government reduced its ownership stake in GM to 33 percent from 61 percent. The federal Treasury could end up unloading more than 400 million shares of the resurrected GM, which is smaller -- but cleansed of most of its debt. Some bankers have options to buy and resell more shares, which could raise total sales numbers.

In the stock offering, the government made $11.8 billion by selling 358 million shares at $33 apiece. It stands to make $13.6 billion if bankers exercise options for 54 million more.

GM's Wall Street reception contrasted starkly with the automaker's perils last year, marked by the government loans and a trip through bankruptcy.

"What a difference a year makes," said Brian G. Cannon, the managing director at Dopkins Wealth Management in Amherst. "You've got a 100-year-old company that went from riches to rags, and now, potentially, to riches again."

Cannon said the stock offering is a good sign for the overall stock market. "It really says a lot about the sentiment of investors today. It had a huge psychological and real effect on the market." The Dow Jones industrial average climbed 173 points, or 1.5 percent, Thursday.

Investors' response was also encouraging to Steve Finch, plant manager of GM's Town of Tonawanda engine plant.

"For me, personally, it's a long road that we've traveled," Finch said. "It's just a great feeling to have a company finally come out of this really difficult time and see some positive news."

Most individual investors were shut out of the actual IPO because big investment banks were granted the right to buy up most of the shares. So the first chance most individuals had to buy GM stock was once the shares actually started trading Thursday.

Despite high interest from sovereign wealth funds -- pools of money from reserves of foreign governments-- 90 percent or more of the shares were sold in North America, GM said.

At the market's close, GM shares had changed hands more than 456 million times, almost matching the number of shares sold in the IPO. Such volume is not unusual following a high-profile offering.

"Often the way the world is, the Wall Street institutions get in at the lower price, and the Main Street investor gets in at the higher price," said David Whitson, an auto equity analyst with Morningstar Inc. in Chicago.

GM has a major presence in the Buffalo Niagara region in its plants in the Town of Tonawanda and Lockport, not to mention suppliers and dealers. Its plants' high-wage payroll ripples through the local economy. But across the company, GM has gone through a wrenching overhaul, shuttering a number of plants, cutting brands and implementing a lower-wage tier for newly hired hourly workers.

Robert Coleman, shop chairman of Local 774, United Auto Workers, at the Tonawanda plant, said reaction to the IPO was reassuring. "It shows that GM turned around. You see the morale up with the people."

Last year, Coleman said, GM workers wondered whether the plant would survive and what that would mean for the community. Some older workers at the time made comparisons to the devastating loss of Bethlehem Steel operations in the early 1980s.

But this year, the Tonawanda plant was awarded two new engine lines set to begin production in 2012, investments representing $825 million. Preparations for those engine lines are under way.

Finch credits the good working relationship between plant and union management with keeping the facility on track. "I think that was a key determining factor in Tonawanda being part of the new GM," he said.

Arthur Wheaton, an automotive industry expert at Cornell University's School of Industrial and Labor Relations in Buffalo, said the stock sale helps GM improve its image and regain more autonomy. "I think they got a much bigger response than most people thought," he said.

That robust response, he said, also strengthens the public perception of GM as the automaker tries to sell more cars and trucks. Both of the region's GM plants are in a good position with the company as the "new GM" moves forward, Wheaton said.

Patrick Heraty, professor of business administration at Hilbert College, said two factors fueled the favorable response to the stock offering: the potential for growth in domestic auto sales as the economy improves and the relationships GM has built in China and India, which have become important overseas markets.

On the domestic front, Heraty said, GM will continue to face strong competition. "They still have to prove themselves, and I think it's going to take a while to earn that confidence."

How well GM's stock does in the future -- and whether it's a good investment or one to avoid -- depends largely on how each investor answers these two fundamental questions: How many cars can GM sell? And how much money can GM make doing it?

GM's financial position has certainly improved after the company slashed its debt burden through bankruptcy proceedings and won concessions from unions.

But car sales remain depressed, and GM is facing intense competition. "Don't confuse the familiar with the safe," said Cannon, who does not own any GM shares and recommends that individual investors who do buy it not to make it too big a part of their overall investments.

"There's a lot of risk in that stock," he said. "They're operating in a very competitive environment, and they've had one quarter of profits," earning $307 million during the third quarter.

David C. Hartzell, president of Cornell Capital Management, a Clarence money management firm, is a fan of Ford Motor Co. stock, but not GM shares.

"If I'm going to buy in the car market, I'm going to buy Ford," said Hartzell, whose firm has been trading Ford shares over the last six months. "It's a much better company. Ford has much better control over their labor costs. They have a much better product line."

"We think GM's management is weak. We don't like the product line as much," he said. "They've had trouble producing a product that the American public has wanted to buy on a consistent basis."

Beyond that, Hartzell worries that consumers will remain wary of buying GM vehicles because of the "Government Motors" stigma associated with GM as a result of its bankruptcy filing and government bailout.

News wire reports contributed to this report. and

PR Newswire, November 17, 2010, Wednesday

Copyright 2010 PR Newswire Association LLC
All Rights Reserved
PR Newswire

November 17, 2010, Wednesday

Top Executive Compensation Rose, But Not Across the Board

NEW YORK, Nov. 17, 2010 /PRNewswire/ -- Top executives' compensation fell in some industries and rose in others, and the median CEO of the largest companies took home almost 12 times the amount awarded to the median CEO of the smallest companies, The Conference Board reported today.

Analyzing the most recent proxies from 2,316 publicly traded companies, The 2010 U.S. Top Executive Compen-sation Report offers a snapshot of executive compensation categorized into 22 industries, along with insights that ad-vance the important conversation about pay for industry leaders and the link between pay and performance.

Total compensation fell in 12 of 22 industries, while total cash compensation increased in 13, remained the same in two, and fell in seven. Total compensation and total cash compensation grew with company size. The median CEO of the largest companies (revenues over $8 billion) was awarded $10.2 million in total compensation, almost 12 times the $877,866 of the median CEO of the smallest companies (revenues under $90 million).

"This may partially explain why compensation-process skeptics may scrutinize the CEO 'peer groups' used for set-ting benchmark compensation," said Kevin F. Hallock, the report's co-author, professor and chairman of the Department of Labor Economics and director of the Institute for Compensation Studies at Cornell University's ILR School. "Selecting larger companies as peers can boost the percentiles in a comparison group, independent of performance."

Among the report's other findings:

Larger companies generally pay higher salaries and total compensation than smaller companies, but the fraction of compensation delivered as salary decreases as revenue increases. As in 2009, relative use of each element of compensation varies across industries. Commercial banking has by far the lowest fraction of an average CEO's compensation in stock and options. CEOs have substantial wealth in their companies. Median vested and unvested holdings both increase substantially as revenue increases.

The 2010 U.S. Top Executive Compensation Report
The Conference Board
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LOAD-DATE: November 18, 2010

US Fed News, November 17, 2010, Wednesday

Copyright 2010 HT Media Ltd.
All Rights Reserved
US Fed News

November 17, 2010, Wednesday

Iowa State Study Confirms Faculty Union Influence on Institutional Decision Making

AMES, Iowa, Nov. 16 -- Iowa State University issued the following news release:

A new Iowa State University study of 341 public universities has found that faculty unions do exert the desired in-fluence over institutional decision-making in areas such as salaries, appointing department chairs, teaching loads, curri-culum and appointment to institution-wide committees. But that influence varies depending on the category and the institution.

Stephen Porter, an Iowa State associate professor of educational leadership and policy studies (ELPS); and Clinton Stephens, a research graduate assistant in ELPS, conducted their analysis from a 2001 survey on faculty governance sent to presidents and faculty leaders at every four-year institution accredited to grant bachelor's degrees in liberal arts. They screened the data to only include public institutions with a Carnegie classification ranging from "bachelor's" to "research university," since those are the schools most likely to have faculty unions.

Porter will present the study's results on Saturday, Nov. 20, at the Annual Conference for the Association for the Study of Higher Education at the Indianapolis Marriott Downtown.

"To my knowledge, this is the first time someone has really looked at this," Porter said. "And the findings for faculty salaries were strong [on the influence by unions], which meets with what people would expect faculty unions should be doing. But that's also in contrast to some studies that don't find much of a difference in salaries between unionized and non-unionized faculties."

"This is a serious study, and very well done," Ronald G. Ehrenberg, the director of the Cornell Higher Education Research Institute and a professor of industrial and labor relations and economics at Cornell University, said in The Chronicle of Higher Education's story about the study.

Survey assesses faculty participation in 15 areas

The faculty governance survey initially asked respondents to describe the extent of faculty participation in institutional decision-making for 15 different items: faculty appointments, tenure promotions, curriculum, degree requirements, degrees offered, size of faculty in disciplines, construction programs, teaching loads, appointing deans, appoint-ing chairs, faculty salary scales, individual faculty salaries, budgetary planning, faculty governance and institution-wide committees.

Porter says the problem with understanding the effect of unions on faculty influence is that unionization is often driven by low levels of faculty influence on their institutions, since "each affects the other." So he had to find a measure of unionization that was not affected by low levels of faculty influence. Porter realized that a statistical technique called "instrumental variables" could solve this problem. He used state employee collective bargaining rights to create a proxy of unionization that is unrelated to faculty influence.

The study found unions' most significant faculty influence to be on salaries, followed by the appointment of de-partment chairs and the selection of institution-wide committees. There were also more modest effects on tenure promotion, curriculum and teaching loads, although Porter says those findings "weren't very robust."

"The teaching loads wouldn't be that unexpected because a lot of these collective bargaining agreements sort of spell out job duties and teaching loads," he said.

The study also didn't find unions to have any negative effects on faculty influence in decision-making. Porter re-ports that there was either no difference or positive differences when comparing faculty influence by unionized vs. non-unionized institutions.

He plans to continue studying one perceived negative effect of unions on faculty productivity.

"One of the concerns in the literature is what unions do because they want to codify compensation and also work duties, and it's difficult to monitor research output," Porter said."So one of the arguments is that these unionized schools tend to focus on certain number of courses and so forth, which then may cause a drop in research productivity because that's not as rewarded. And that might be one of the reasons that you don't tend to see that many unions at big research universities, such as Iowa State and Iowa."

Expect more unionization at public institutions

But he writes in the paper that he expects there will be an increased call for unionization at large public universities with continuing cuts to state appropriations nationwide.

"State appropriations are certainly going to continue to go down and I would be astonished if they went up," he said. "I think it's this idea that faculty are basically getting squeezed all over. And so then the question becomes, 'If unionization increases, what is this going to mean for institutions?' It's really hard to figure that out, but I've come up with a way that gets at the true causal effects of unions."

And in the final analysis, the study tells him that faculty unions may be good for some institutions, but not worth all the time and effort for others.

"I don't know that I'd necessarily say unions are a good thing across the board," Porter said. "I think a lot depends on where you are and what you want to accomplish. If you're at a school where you don't have any faculty voice and your pay is low, then it's probably not a bad idea." For any query with respect to this article or any other content requirement, please contact Editor at

LOAD-DATE: November 17, 2010

Hartford Courant, November 15, 2010, Monday

Copyright 2010 The Hartford Courant Company
All Rights Reserved
Hartford Courant (Connecticut)

November 15, 2010, Monday

Pay Equity Stays Elusive; Who We Are

Men's salaries outpace women's salaries by a wider margin in Connecticut than in the nation as a whole, with a gender gap that's 5 percent deeper than the 78-cents-on-the-dollar that U.S. women make compared to men.

Why do Connecticut women make 74 cents for every dollar that a man earns? And what does that say about wage equity?

Women's pay is lower than men's for a variety of reasons, so there's no single answer and no simple explanation about what it means.

But data from the U.S. Census Bureau shows that the gap in Connecticut is wider than elsewhere for the same rea-son that Connecticut has a huge gap between rich and poor: Famously, the state has more than its share of super-earners - and they tend to be men.
Nationally, the biggest reason that women make less is because they are concentrated in professions that have more modest salaries. Nearly all secretaries are women, 2.7 million nationwide; a majority of managers are men. Less than one-third of attorneys are women, but 88 percent of paralegals are women. Women are much more likely to be a poorly paid cashier than a well-paid construction worker.

The gap has been shrinking, but more slowly in recent years than in the '80s. Although new data aren't available yet, the 2008-'09 recession and slow recovery could be narrowing the gap more quickly. That's because unemployment hit typically male professions especially hard.
But pay differences between professions is just one piece of the gap. Even within the same profession, women al-most always have lower salaries than men. For attorneys, it's 74 cents for every dollar. For doctors, it's 61 cents. For pharmacists, it's 92 cents. For insurance underwriters, it's 70 cents.

Jennifer Cheeseman Day, a statistician with the U.S. Census, detailed the gaps within jobs. The lingering effects of employment discrimination 35 and 40 years ago isn't the answer - the proportion of women among the older workers in a job did not determine the relative pay, she found.

She said the fields where the gap is smaller are those where there aren't many outliers, or what she called "su-per-earners."

In almost every case, women and men at the bottom of the scale in each job are close to each other, if not at nearly identical wages - even if that floor is well above minimum wage.
But in fields where there are more super-earners, men are far, far more likely to be the big winners.

Take lawyers. The 90th percentile of women earn on average $200,000 a year, meaning that's the pay level where 10 percent earn more and 90 percent earn less, for that profession. The 90th percentile of men earn on average a little more than $300,000. Chief executives have the same pattern by gender.

Day said what's harder to understand is why men still earn more than women in low-paid professions.

In her study, based on national data, the median wage for a woman working full time as a cashier was less than $20,000; for a man, it was $25,000.

"When you look at cashiers, why do men get paid more than women? It doesn't make sense," Day said. "Maybe they're in an area that's more unionized?"

One of the areas where Connecticut women lag more than U.S. women is in production fields, primarily manufac-turing. Women are more likely to be in lower-paying, non-durable goods factory jobs; men are more likely to be in more skilled machinist jobs. In Connecticut, women who work in production make about 60 cents for every $1 earned by a man. Nationwide, it's 66 cents.

A state with a deeper pay gap than Connecticut's, Michigan, at 72 cents, is also the one with the highest concentra-tion of manufacturing workers. In Wyoming and West Virginia, coal mining is a prominent employer, and those male-dominated jobs pay better than fields where women are concentrated.

The number of women going into blue-collar, male-dominated fields is not changing as rapidly as, say, the number of women going for MBAs, now at 40 percent.

Francine Blau, a Cornell economist who studies the reasons for the pay gap, said it narrowed fastest from 1980 to the mid-'90s.

"One of the things that has improved women's occupations relative to men is bad news to men," she said. "The loss of relatively high-paying blue-collar jobs in manufacturing ... was especially pronounced in the '80s."

This economic downturn is shrinking the pay gap in some places, such as states where a housing bubble swelled the ranks of construction workers.

Florida and Nevada had pay gaps of 17 cents or 18 cents in 2009; two years earlier, before the recession hit, those gaps were 20 cents. In Florida, men who worked full time, all year in 2009 made $1,100 less than they did two years ago.

Still, among the majority of Americans who haven't gone to college, women's earning power is hurt by their decisions to go into low-paid child care, say, rather than moderately paid welding.
Feminism had a bigger effect on college-educated women than on the majority of workers who don't have a degree.

"If you look at the extent of women's entry into traditionally male jobs, we have a lot of successes in the formerly male professional jobs," Blau said. "But there's been much less change in the blue-collar arena."

After occupational segregation, the biggest reason for the pay gap is women taking time off to raise children.

Even though these data compare a year when both the women and men worked full time, and didn't take any leave, women who return to the workforce after a period of part-time work or homemaking usually take a hit that lasts for years.

But researchers, even after they've controlled for this effect, still see a gap of 12 percent for married women with children, according to Catherine Hill, who has studied the gap for the American Association of University Women.

The gap for childless, early-career women is 5 percent.

Some of the difference might be because women often don't feel empowered to negotiate for a higher salary offer when they're hired.

That was the experience of Lee Miller, who wrote "A Woman's Guide to Successful Negotiating" with one of his daughters. He worked as the head of human resources at three Fortune 1000 companies before writing the book 10 years ago.

"It's rare that your first offer is your best and final offer," Miller said, speaking from the company's perspective. Men understand this, he said, and he can't remember any time he hired a man who didn't ask for more money, or more vacation, or more perks. "Very, very significant numbers of women accepted the offer" with no negotiation, he said. That means they frequently left money on the table.

Miller believes that younger women are finally shaking free of the idea that they might anger an employer by ask-ing for more. "Younger women, once they learn how to negotiate, are not afraid to negotiate," he said, and he thinks their wider participation in sports since Title IX changed scholastic sports is a factor.

Talking about salary needs to wait, he cautioned.

"Early on in the process, before they decide on you, it can't help you to talk about money. Either you'll ask for too little, and you'll get it," or you can price yourself out of the running, he said. But once the company has offered you a job, and has named a salary, you have leverage, even in today's terrible economy. The best way to negotiate well is to research what people in that firm make at that job. If you can find out what your predecessor made, even better.
"No one that I know, in all my years of negotiating, lost a job offer because they asked for something," Miller said.

But it's not just timidity holding women back. Subtle discrimination - even subconscious bias - does explain some of the gap, researchers agree. For instance, when orchestras started auditioning musicians from behind a screen, more women were hired.

"To what extent are we seeing discrimination, and to what extent is it choices of men and women?" Blau asked. "It seems discrimination still exists."

Sen. Christopher Dodd, D-Conn., responded to an early version of this story posted online Friday by sending out a press release lamenting the lack of action on a bill that would make it easier for women to file class-action lawsuits against employers over unequal wages, limit the defenses of employers and empower the government's monitoring ef-forts on wage

"It greatly disappoints me that Connecticut, a state with so many successful women, has a higher incidence of gender wage inequity than the national average," he said in the release. "We must pass the Paycheck Fairness Act to stand up for women and American families and ensure that women are paid what they deserve. Now is the time to level the playing field once and for all and finally guarantee equal pay for equal work."

For Connecticut women who are feeling discouraged, perhaps they should consider that although their median pay - the midpoint of all women's earnings - is more unequal than the typical woman's in the United States, it's also substantially higher. Nationwide, the typical woman made $35,549 last year; the typical Connecticut woman made $43,900. Median pay for women in Connecticut was higher than the median men's wages in 24 states.

LOAD-DATE: November 19, 2010