Best Practices in Personnel Management

1. Best Practices in Personnel Management

2. With a new year and new hiring season upon us and with a new presidential administration setting up shop in Washington, what are the key personnel-related areas to keep in mind?

3. Changes to Workplace Law

4. Overtime Rule “The Fair Labor Standards Act (FLSA) overtime rule determines whether employees are eligible or exempt for overtime pay. Exempt employees, because of their rate of pay and type of work that they do, are not eligible for overtime pay for hours worked over 40 in a workweek.” Society for Human Resource Management, “FLSA Overtime Rule Resources” Rate of pay and type of work: To be exempt, an employee must meet both salary and duties “tests.” There are administrative and professional exemptions. The latter generally includes teachers (see slide 8).

5. Overtime Rule Recent activity May 2016: TheDepartment of Labor (DOL) released an updated rule intended to go into effect Dec. 1, 2016, doubling the salary exemption threshold, making more individuals eligible for overtime pay. November 2016: A Texas judge’s injunction put the rule on hold. December 2016: DOL filed a notice to appeal the injunction. What’s ahead: Legal challenges will continue to delay implementation, but schools should be prepared for some change to the salary threshold. $23,660 $47,476Proposed yearly salary threshold under which an employer would be expected to pay overtime

6. Update overdue but surprising in degree “[T]he salary threshold hadn’t been changed since 2004. But many observers expected a gradual increase, not a doubling. The new policy was expected to prove especially challenging for small, private colleges, already facing tight budgets, and campuses outside major urban areas, where living costs and salaries are lower and more employees may be affected.”The Chronicle of Higher Education, “What You Need to Know about the Overtime Rule and Higher Ed” (10/20/16) Overtime Rule • How universities reacted after the injunction College and University Professional Association for Human Resources, “What Is Higher Ed Doing about the FLSA Overtime Rule?”

7. Advice for independent schools in light of the unclear future of the rule Ensure that your school has properly classified positions as exempt or nonexempt based on the “duties test.” Considertracking employee time tomore easily comply retroactively with the regulations if needed. NAIS Bulletin, “Weighing Alternatives about the Blocked Overtime Rules” (11/30/16 ) Overtime Rule Rule details: See information, including classification “tests,” at www.dol.gov/whd/overtime/final2016.

8. Understanding the teacher exemption Teachers and those who are truly education support specialists “are considered under the professional exemption…. teachers in public and private schools are not required to meet the salary minimum prescribed by the regulations.” Under the education administrative exemption, “These roles are exempt from the salary requirement as well, but they must be paid at least as much as the salary basis for a new, incoming teacher at that school. These individuals must perform administrative functions directly related to ‘academic instruction or training in an educational establishment or one of its departments or subdivisions.’” Debra P. Wilson, NAIS Legal Advisory, “Department of Labor Final Overtime Regulations: What Do They Mean for Your School?” (November 2016) Overtime Rule

9. Commonly misclassified positions Assistants to the head of school and assistant or associate directors of admissions, development, communications, etc., are often misclassified as exempt under the administrative exemption. Teachers who have combination jobs where teaching is not their primary job (e.g., an individual teaching two classes and also acting as assistant director of development may not quality for the teacher exemption because teaching is not his or her primary job). Dorm parents who are not teachers or otherwise exempt. Find additional guidance in the NAIS Legal Advisory “Wage and Hour Law: A Guide for Independent Schools.” Overtime Rule Debra Wilson, NAIS General Counsel

10. “For many years, the EEOC [has] collected data from certain private employers … about their employees on the ‘Employer Information Report’ or the EEO-1 … data about the number of employees by job category and by sex and race or ethnicity. On Sept. 29, 2016 the EEOC announced approval of a revised EEO-1 … to collect summary pay data from employers … with 100 or more employees.”   U.S. Equal Employment Opportunity Commission, “Questions and Answers: The Revised EEO-1 and Summary Pay Data” New Requirements for Reporting Employee Compensation • Extended deadline: The deadline for submission of the 2017 EEO-1 report is March 31, 2018.

11. New elements of Employer Information Report EEO-1 “Summary pay data: Employers report the total number of full and part-time employees they had during that year in each of 12 pay bands listed for each EEO-1 job category; employers do not report individual pay or salaries. “Aggregate hours worked data [for all employees] … in each pay band… “After tallying the total number of employees in each pay band by job category, employers will enter this data in the appropriate columns of the EEO-1 report based on the sex and ethnicity or race of the employees.” U.S. Equal Employment Opportunity Commission, “Questions and Answers: The Revised EEO-1 and Summary Pay Data” New Requirements for Reporting Employee Compensation

12. Advice for independent schools Ensure now that there are systems in place to track these data, and plan for extra time to complete the report. If your system that tracks employee gender and race/ethnicity is not connected to your compensation data, this could be a time-consuming project. Consider any discrepancies or patterns you see when you tabulate your compensation information by gender and race/ethnicity. New Requirements for Reporting Employee Compensation Debra Wilson, NAIS General Counsel

13. The Department of Labor, IRS, and state governments are working together to identify misclassification of employees as independent contractors. The intent is to ensure that individuals receive benefits and protections (e.g., insurance and compensation) and to prevent losses due to unpaid tax revenue. U.S. Department of Labor’s Wage and Hour Division, “Misclassification of Employees as Independent Contractors” Misclassification of Employees as Independent Contractors How is status determined? The “degree of control” exercised by the employer (behavioral and financial) is key in determining status as employee or independent contractor.

14. Advice for independent schools Learn the guidelines for determining whether an individual is an independent contractor or an employee. (See www.dol.gov/whd/workers/Misclassification.) Review commonly misclassified roles such as coaches who receive stipends or parents who do work for your school. Penalties, especially when such actions are deemed intentional/fraudulent, are steep. For any independent contractors, work with your attorneys to put in place systems to properly identify independent contractors and contracts/agreements that will protect your school. Misclassification of Employees as Independent Contractors Debra Wilson, NAIS General Counsel

15. A new provision for small businesses (fewer than 50 employees) would allow them to offer Health Reimbursement Arrangements (HRAs) solely funded by the employer. The intention is to make the HRA more versatile, allowing small employers to design new health plan options. Discovery Benefits blog, “21st Century Cures Act: 3 Things to Know about the HRA Provision” Qualified Small Employer Health Reimbursement Arrangements Effective date: Effective for plan years beginning December 31, 2016, and later

16. Three things to know: Eligibility requirements: Fewer than 50 full-time employees, no group health plan, provides the HRA to all eligible employees on the same terms Reimbursement limits: $4,950 for individual employee and $10K for employee and eligible family members covered under the plan HRAs may now be used to help pay for individual health insurance premiums in addition to qualified medical expenses. Discovery Benefits blog, “21st Century Cures Act: 3 Things to Know about the HRA Provision” Qualified Small Employer Health Reimbursement Arrangements

17. Affordable Care Act “The Affordable Care Act … is likely to be the first topic that Congress and the Trump Administration will want to take on, and likely the thorniest. Something will happen to replace or tweak the ACA, but … it appears increasingly unlikely that the ACA will be completely repealed without something substantial to take its place, potentially within the structures that have already been created.” See a new NAIS advisory: “The Trump Administration and Independent Schools.” Debra P. Wilson and Whitney Silverman, NAIS Legal Advisory: “The Trump Administration and Independent Schools” (January 2017) Other Near-Term Changes in Workplace Law

18. Best Practices in Hiring and Management

19. Steps for ensuring student safety, starting with the hiring process Selection and Placement: “Implement policies pertaining to the screening and placement of all educators. “Use written applications, reference checks, and personal interviews for all positions. “Employ more extensive screening methods (such as criminal history and other background checks) as required by law or recommended for positions having regular or unsupervised contact with children.” United Educators, Educator Sexual Misconduct: A Policy and Audit Guide for Protecting Children Best Practices in Hiring to Avoid Sexual Misconduct

20. Steps for ensuring student safety: Interview questions Sample Questions: “Why are you interested in working with children? How would you describe yourself? Why do you enjoy working with children? What about this position appeals to you? Tell me about your childhood. What are some of your happiest and saddest memories? What are the strengths and weaknesses that you will bring to the position? … “Explore the applicant’s sense of personal boundaries with older and younger children. Ask how the applicant would respond in situations involving potential sexual misconduct or abuse of children. Determine if the applicant understands how to supervise children properly and interact with families. … “Use the interview to discuss the school’s policies on child safety.” United Educators, Educator Sexual Misconduct: A Policy and Audit Guide for Protecting Children Best Practices in Hiring to Avoid Sexual Misconduct

21. Steps for ensuring student safety: Code of Conduct Make the school’s Code of Conduct and relevant training clear and available to all employees, including those newly hired. “Codes of conduct enforce behavioral rules and guidelines pertaining to educators in their interactions with children, managing child behavior, personal behavior, and computer including internet use.” United Educators, Educator Sexual Misconduct: A Policy and Audit Guide for Protecting Children Best Practices in Hiring to Avoid Sexual Misconduct

22. Increase in Discrimination Claims Uptick in age and age-related disability discrimination claims in schools “In addition to trends showing an aging workforce, data also show that insurance claims being brought against schools are trending more heavily toward age and disability discrimination claims. … “61 percent of the total claims against independent schools were brought due to terminations for poor performance that were not well addressed or for reductions in force that were not supported by a business need.” Donna Orem and Debra Wilson, “The Human Resources Outlook,” 2015–16 NAIS Trendbook Legal context: “Age-related claims are brought under the Age Discrimination in Employment Act of 1967.”

23. Increase in Discrimination Claims Percentage of age-related claims in independent schools higher than national average 33% of claims at independent schools (2006–2013) were age-related. 25% of claims nationally are age-related. Donna Orem and Debra Wilson, “The Human Resources Outlook,” 2015–16 NAIS Trendbook

24. Increase in Discrimination Claims Advice for independent schools “As your school adopts new policies, procedures, expectations, technologies, or approaches, consider the impact on longtime employees… . “Train supervisors to manage employee support, communications, and documentation of underperformance or other issues. Ensure that all terminations are properly substantiated. Pay particular attention to terminations or disciplinary actions against people in protected classes. “Build effective and appropriate evaluation systems, both as training tools and so that any adverse employment actions have appropriate documentation in place.” Donna Orem and Debra Wilson, “The Human Resources Outlook,” 2015–16 NAIS Trendbook

25. Increasing Need for Support for Transgender Employees “While Title VII of the Civil Rights Act of 1964 does not explicitly include sexual orientation or gender identity in its list of protected bases, the Commission, consistent with Supreme Court case law … interprets the statute’s sex discrimination provision as prohibiting discrimination against employees on the basis of sexual orientation and gender identity.” U.S. Equal Employment Opportunity Commission, “What You Should Know about EEOC and the Enforcement Protections for LGBT Workers” 1.4 million: “About 1.4 million adults in the U.S. identify as transgender, double a widely used previous estimate.” Jan Hoffman, New York Times, (6/30/16)

26. Increasing Need for Support for Transgender Employees Preparing to help transgender employees transition “While HR policies and state laws vary, one thing is clear: Companies that have a plan in place before an employee announces a gender transition will be in the best position to deal with any issues that arise. “Organizations should know in advance how they will inform co-workers, managers and other colleagues, as well as who will provide that disclosure.” Susan Milligan, Society for Human Resource Management, “Supporting Transgender Employees”

27. Increasing Need for Support for Transgender Employees Do “Let the employee set the timetable. “Respect the transgender worker’s privacy. “Select a point person — not necessarily an HR representative — who will listen to and assist the transitioning worker. “Let the employee decide how to tell co-workers — in person, by email or conference call, individually, or in a group. “Use the names and pronouns desired by the employee. “Be vigilant against subtle forms of harassment, such as co-workers deliberately using the wrong pronoun or excluding a transgender worker from meetings or events.” Susan Milligan, Society for Human Resource Management, “Supporting Transgender Employees”

28. Increasing Need for Support for Transgender Employees • Don’t • “Don’t ask personal questions about a person’s medical or surgical history. • “Don’t provide unsolicited ‘advice’ on grooming and dress. This can feel demeaning. • “Don’t ‘out’ transgender colleagues or assume everyone is aware of a co-worker’s transgender status. The decision to disclose is the employee’s alone. • “Don’t ask what someone’s ‘real’ name is … . • “Don’t assume a transgender person’s sexual orientation. Transgender people can be straight, lesbian, gay or bisexual. • “Don’t evaluate a transgender person by how successfully he or she conforms to idealized gender standards.” • Susan Milligan, Society for Human Resource Management, “Supporting Transgender Employees”

29. Trends in Performance Management

30. Trends in Performance Management Many companies scrapping annual evaluations “Adobe is not alone in its endeavours to ditch the traditional performance appraisal. Others are joining its ranks in either pilot or rollout stages, with Accenture, Cargill, ConAgra, Gap, Intel, Juniper Networks, Medtronic, Microsoft, and Sears among them.” Graham Kenny, Harvard Business Review, “Fixing Performance Appraisal Is about More Than Ditching Annual Reviews” (2/2/16) Mediocre satisfaction with performance management Society for Human Resource Management, HR Professionals’ Perceptions about Performance Management Effectiveness (2014)

31. Trends in Performance Management Move from annual reviews to frequent check-ins “The return of people development “The need for agility “The centrality of teamwork … “All three reasons [above] … argue for a system that more closely follows the natural cycle of work. Ideally, conversations between managers and employees occur when projects finish, milestones are reached, challenges pop up, and so forth — allowing people to solve problems in current performance while also developing skills for the future.” Peter Cappelli and Anna Tavis, Harvard Business Review, “The Performance Management Revolution”

32. Trends in Performance Management The transition from “old thinking” to “new thinking” includes the following:  •Goals: From "SMART" goals at the beginning of the cycle to ongoing expectations as work evolves •Development: From reluctance to discuss, primarily involving formal training to part of daily routine, acquiring experience, mentoring  •Feedback: From once or twice a year to regular discussions embedded in work •Training: From being just for managers on formal systems requirements to being for managers and employees on day-to-day behavior Elaine D. Pulakos et al., Society for Human Resource Management, "Building a High-Performance Culture: A Fresh Look at Performance Management"

33. Trends in Performance Management Reimagining evaluation at independent schools “The Folio Collaborative … was conceived by a group of faculty and administrators at McDonogh School in Baltimore, guided by the principles: 1. Everyone has room to grow, every year. 2. For a process to be sustainable, it has to be easy to use. 3. Personal, annual reflection should be at the heart of the process. 4. A successful process needs to be based in honest conversations and focused on growth.” 5. Students and peers deserve the opportunity to give feedback.” More than 125 schools use the Folio model. Donna Orem and Debra Wilson, 2015–16 NAIS Trendbook

34. Trends in Performance Management Questions for independent schools Does your school have effective evaluation systems and cycles? Can they be improved? Are your goals and objectives clear to all employees? How do you provide effective professional development, and how does it complement your expectations of staff? Donna Orem and Debra Wilson, “The Human Resources Outlook,” 2015–16 NAIS Trendbook

35. Resources • Society for Human Resource Management, “FLSA Overtime Rule Resources” • Chronicle of Higher Education, “What You Need to Know about the Overtime Rule and Higher Ed” • College and University Professional Association for Human Resources, “What Is Higher Ed Doing about the FLSA Overtime Rule?” • NAIS Bulletin, “Weighing Alternatives about the Blocked Overtime Rules” • Debra P. Wilson, NAIS Legal Advisory: “Department of Labor Final Overtime Regulations: What Do They Mean for Your School?” • Suzanne K. Bogdan and David A. Buchsbaum (Fisher & Phillips LLP) and Debra Wilson, NAIS Legal Advisory, “Wage and Hour Law: A Guide for Independent Schools” • U.S. Equal Employment Opportunity Commission (EEOC), “Questions and Answers: The Revised EEO-1 and Summary Pay Data” • U.S. Department of Labor, Wage and Hour Division, “Misclassification of Employees as Independent Contractors” • Discovery Benefits, “21st Century Cures Act: 3 Things to Know about the HRA Provision” • Debra P. Wilson and Whitney Silverman, NAIS Legal Advisory: “The Trump Administration and Independent Schools” (January 2017) • United Educators, Educator Sexual Misconduct: A Policy and Audit Guide for Protecting Children • Donna Orem and Debra Wilson, “The Human Resources Outlook,” 2015–16 NAIS Trendbook • U.S. EEOC, “What You Should Know about EEOC and the Enforcement Protections for LGBT Workers” • Jan Hoffman, New York Times, “Estimate of U.S. Transgender Population Doubles to 1.4 Million Adults”(6/30/16) • Susan Milligan, Society for Human Resource Management, “Supporting Transgender Employees” • Society for Human Resource Management, HR Professionals’ Perceptions about Performance Management Effectiveness (2014) • Graham Kenny, Harvard Business Review, “Fixing Performance Appraisal Is about More Than Ditching Annual Reviews” • Peter Cappelli and Anna Tavis, Harvard Business Review, “The Performance Management Revolution”