Overheard @: Employment proposals 'economically, operationally disastrous'

This month, EBN's Kathleen Koster spent "Five Minutes With ..." Howard Bernstein, a labor and employment attorney at Chicago-based law firm Neal Gerber Eisenberg. Bernstein serves up some straight talk regarding HR policy changes expected from the incoming administration and how they will affect a company’s ability to compete in a global economy.

Several health care proposals in particular, he says, are "socially desirable, but economically and operationally disastrous." Download the podcast here.

Tip of the Day: Be careful mixing job, benefits terminations

When it comes to terminating benefits along with jobs, employers must take care to remember the two may not mix -- at least in the eyes of the legal system.

The Massachusetts Supreme Court held last week that Claire Cole, a former secretary for the department of public works in Salem, Mass., should have received full disability benefits after she suffered a heart attack within an hour of hearing she would lose her job in March 2000.

Cole, who died of a separate illness in 2006, previously claimed that past years of job-related stress, in addition to hearing that her position would be eliminated due to budget concerns, caused the attack, leaving her unable to do her job and thereby deserving full disability benefits. The Contributory Retirement Appeal Board later found that the debilitating heart attack was job-related, a finding that was upheld by the Massachusetts Supreme Court.

The two key questions the court answered in the Retirement Board of Salem vs. Contributory Retirement Appeal Board were whether Cole’s heart attack occurred “as a result of and while in the performance of her duties” and whether or not the city is liable for the damages despite conducting a routine management practice.

Countering Cole’s assertions, the Salem Contributory Retirement Board argued that Cole had pre-existing conditions of hypertension and chronic anxiety.

Whether or not these types of claims will become a trend in coming months as more and more workers are expected to be laid off is hard to say. But according to one Salem attorney, this was a highly specialized case.

“If you’re talking about situations where people are being notified that their jobs are being eliminated and they have a reaction to that, if that reaction is purely mental or psychological, they will not recover [benefits],” Alan Pierce told Salem News. “If the reaction is physical, they will recover. But how frequently will someone have a heart attack or stroke upon receiving bad news?”

Is this a legitimate ruling or should her qualification for disability benefits have ended with her job’s imminent termination? Let us know what you think. --Kathleen Koster

News You Can Use: Employers put skilled talent on holiday wish lists

In a recent Watson Wyatt Workforce Planning Survey, almost two thirds (71%) of employers cite scarcity of talent as the biggest challenge impeding their business strategy. Other major concerns include restructuring (42%) and layoffs or hiring freezes (20%).

For employers who are most worried about bringing in new talent, 50% plan to continue replacing talent in all positions, while 33% will scale-back talent replacement across the organization and 21% will hire replacements only for critical jobs. Three percent of employers will not be replacing talent in the near future.

On the other side of the spectrum, attracting talent is equally difficult as 77% of employers report challenges in enticing critical-skill employees and 60% named top performers as a hard commodity to obtain. In terms of retaining their employees, less than half (49%) were having trouble keeping critical-skill employees within the company and 34% had the same problem retaining top performers.

Watson Wyatt’s Workforce Planning Survey was conducted in October 2008 and compiles responses from 129 North America-based employers across a variety of industries.
--Kathleen Koster

Tip of the Day: Get a handle on preventing corporate theft

Apparently driven to desperation by the recession, more employees are stealing from the company cookie-jar, according to a recent study by the Institute for Corporate Productivity (i4cp), which found that 15% of employers have noted an increase in office crime spurred by the economic crisis.

In recent months, nearly a quarter (24%) of all company employers and one-third (31%) of officials from large companies saw an increase of theft of office supplies, company products, electronic equipment, food and other company-owned items. Most serious is the 18% of employers overall and 22% of large businesses that have noted an increase in employee-related monetary theft -- such as padding expense reports or disappearing cash.

Employers hope to offset internal criminal activity with employee communication, a strategy utilized by 28% of all study participants and by 38% of large business representatives. Twenty percent are conducting additional audits (25% in large companies), and 19% of companies overall are paying more attention to background checks for prospective new hires.
-- EBN Associate Editor Kathleen Koster