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HR’s going back to the future

2015 promises more tough going—perhaps some resolution—for bank personnel issues

HR’s going back to the future

I’m dusting off my crystal ball to predict human resource compliance challenges coming for banks in 2015 and beyond.

In most respects, it’s more of the same.

There are plenty of employment laws on the books already, and working out how to navigate through them is an ongoing battle for HR professionals. But even the old chestnuts have some new twists which will impact banks in the future.

First, the usual suspects

Federal contractor status: Banks with more than 50 employees are deemed to be federal contractors subject to affirmative action plan requirements. There are two aspects to this to bear in mind going forward, near-term issues and long-term issues:

Near-term: The effective date of new rules requiring banks with 50 or more employees to implement affirmative action plans (AAPs) for veterans and individuals with disabilities (IWD) was March 24. However, the bulk of the new obligations start to bite with the first plan year to start after that date. For many banks this will be Jan. 1, 2015.

1. Have you revised your Invitation to Applicants to Self-Identify yet? It should include veterans and IWD.

2. Are you ready to conduct a survey of existing employees to determine who is disabled?

3. Have you updated your Affirmative Action Plan narrative to reflect the new rules, including a benchmark for veterans and a utilization goal for IWD?

Long-term: Besides expanded Affirmative Action Plans, recent executive orders require payment of a higher minimum wage and an annual compensation report by race and gender.

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As more such burdens are piled on the backs of federal contractors, more banks are questioning their inclusion within the federal contractor definition. In a nutshell, the positions for and against federal contractor status aserted by rival federal agencies are as follows:

1. The Office of Federal Contract Compliance Programs (OFCCP) says banks are federal contractors if they are issuing or paying agents for U.S. saving bonds. Even if a bank has nothing to do with US savings bonds, the OFCCP’s default position is that banks are parties to “contracts” of insurance with FDIC, a federal agency, and therefore covered.

2. The Federal Deposit Insurance Corp., as long ago as 1980, disagreed with OFCCP’s position that being federally insured constitutes a contract of insurance, and has not changed its position since.

I anticipate this issue will be clarified for better or worse before the end of the Obama administration.

Fair Labor Standards Act: I wrote at length in my previous blog, “H.R.’s Stuck In A Depression-Era Box,” about forthcoming changes aimed at narrowing the so-called white collar exemptions from overtime pay requirements.

Banks are already at particular risk of claims that positions such as lenders, especially mortgage lenders; brokers; private or personal bankers; and “consultant” or “advisor” type job titles have been misclassified as falling within the administrative exemption.

When the U.S. Department of Labor comes out with the new rules, banks will find it essential to have a wage-and-hour audit process already in place to determine whether an exemption applies.

Financial whistleblowers: A perfect storm has been brewing for more than a decade.

The Sarbanes-Oxley Act included sweeping new protections for employees who voice concerns about financial misconduct, and required public companies to implement confidential complaint programs.

The Dodd Frank Act extended employee protections and made it easier for whistleblowers to sue for retaliation. The act also mandated that the SEC pay bounties for information received about wrongdoing.

• The U.S. Supreme Court relaxed the definition of retaliation to include any action that “materially adversely affects the terms and conditions of employment.”

The SEC’s whistleblower bounty scheme has been gathering speed since its inception in May 2011. So far 15 awards have been made, culminating in a record-breaking $30 million award in September. The previous record was $15 million in October 2013.

The program has been criticized for incentivizing employees to bypass internal reporting systems, therefore undermining firms’ ability to discover and correct wrongdoing as early as possible. However, SEC views it as a major success, resulting in more enforcement actions and stiffer penalties for wrongdoers.

Plaintiffs’ lawyers who get to share these multimillion dollar awards see financial whistleblowers as a fertile source of future clients.

Establishing robust, confidential, and credible internal reporting channels will still be the most effective way to deal with financial misconduct. Regular reminders to management about your zero tolerance policy for retaliation are also a good idea.

Act now or pay later.

States lead the way

In the absence of congressional action, we have seen two results: executive action by President Obama and legislative action by the states.

I foresee no slowdown in states’ inclination to fill the legislative gap, as evidenced by recent elections where states voted to increase the minimum wage, legalize marijuana, approve gay marriage, and provide paid sick leave.

All of these initiatives impact the workplace in one way or another. It’s wise to keep an eye on your state’s legislative agenda, and get involved!

Perhaps the most interesting upcoming “state vs. federal” issue involves healthcare exchanges.

Usually, I have steered away from discussing the Affordable Care Act in this blog, leaving that to the experts—there seem to be plenty of them. But when the U.S. Supreme Court accepted King vs. Burwell for review, I was intrigued.

If the Court rules in favor of Obamacare opponents, those who believe that tax subsidies in those states which have not established their own healthcare exchanges are illegal under the ACA, millions of Americans may lose their individual coverage.

This is not an issue for most banks because they continue to provide employer-sponsored plans. However, it poses an interesting dilemma in those red states like Kentucky and Arkansas that have successful state-run exchanges.


Turning from the future impact of federal and state regulation to demographic, cultural and technological developments, here are some topics I predict will continue to pose interesting challenges for community banks.

An aging workforce: The number of retired Baby Boomers (born 1946 to 64) has doubled since 2010, and roughly 10,000 Baby Boomers turn 65 every day. Now is the time to think about best practices for retaining valuable older workers in employment, and to develop knowledge transfer programs to harness their experience.

Work/life balance: Families where both parents work outside the home are now the norm. How women’s career paths have been adversely affected by taking time off to care for children is well-documented.

Increasingly, fathers are taking responsibility for childcare and housework too. However, U.S. employers have not been particularly supportive. What is your bank doing to promote family friendly policies?

Social media in hiring: Using the internet to recruit candidates is virtually universal, but the use of social media in screening applicants is controversial and likely to become more so in the future.

There are legal risks attached to discovering information about race, religion, age, or other protected characteristics, and ethical questions arise regarding invasion of privacy.

My advice? Use social media searches only at the final reference check stage—when protected characteristics are already known—and make sure you only consider information that is truly job-related.

Goodbye … and Hello

I have finally completed my metamorphosis from employment lawyer and H.R. consultant into mystery novelist. This is my final blog post for The Human Element.

Over the last four years, it has been my privilege to share information with you, along with a healthy dose of opinion! Thank you for reading.

I leave you in the expert hands of my ELC partner, Steve Greene.

Steve’s connection to community banking is long and deep. He brings over 35 years of employment law experience to the table. More importantly, he has a practical business-oriented approach that focuses on solutions, rather than problems. He has been a guiding light and a valuable resource in my career, including in writing this blog.

Editor’s Note: Banking Exchange welcomes Steve Greene to our team of expert bloggers. He has a very hard act to follow, but we believe anyone Marian Exall recommends is the genuine article. We look forward to Steve’ debut in January. 

Marian Exall

Marian Exall ( recently retired after a long career as an employment lawyer and HR professional with more than 25 years' experience advising banks and other employers on compliance issues. She was a principal and co-founder of Employment Law Compliance, Inc. which provides HR compliance solutions to banks. For more information on this or other employment compliance topics, please call Employment Law Compliance at 866-801-6302 or go to

Now retired from blogging as well, Marian also writes fiction. Her latest novel is a mystery called A Slippery Slope. For more information and to order, go to

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