Aging Workforce Provided By: Employco USA, Inc

The Aging Workforce Provided by: Employco USA, Inc.

This HR Toolkit is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. © 2019 Zywave, Inc. All rights reserved.

The Aging Workforce | Provided by: Employco USA, Inc.

Table of Contents

Introduction ...... 3 The Aging Workforce and You ...... 3 What You Can Do ...... 3

HR and the Aging Workforce ...... 4 Making Your Workplace Flexible for the Aging Workforce...... 4 Offering Caregiver Support ...... 5 Creating a Mentorship Program ...... 6 Providing Benefits Education Opportunities ...... 8 Medicare Education ...... 8 Retirement Education ...... 9

Legal Considerations ...... 11 What laws are in place to prevent age discrimination? ...... 11 Employee Benefits and Age Discrimination ...... 11 Can I ask employees to waive their rights? ...... 11

Conclusion ...... 13

Appendix...... 14 Flextime Policy ...... 15 Paid Time Off Policy ...... 16 Telecommuting Policy ...... 18 Workplace Flexibility Scorecard ...... 21 Mentorship Program Sign-up Questionnaire...... 22 Medicare 101 Infographic ...... 23 5 Ways to Get Ready for Retirement Infographic ...... 24

The Aging Workforce | Provided by: Employco USA, Inc.

Introduction

In today’s age of the multigenerational workforce, your organization likely has employees from four different generations: the baby boomers, Generation X, millennials and Generation Z. While millennials have become the most predominant generation at many organizations, it’s estimated that 35 percent of the U.S. labor force will be 50 years old or older by 2022.

The Aging Workforce and You

Unlike in decades past, people are working longer than ever and delaying retirement. With this comes several advantages, including:

• More experienced workforce

• Increased professionalism/maturity

• More opportunity for mentorship programs between experienced and entry-level employees

Many of these advantages are only possible through baby boomers working for years, which has allowed them to gain invaluable skills, experience and knowledge of their position, company and industry. When these employees leave, though, they take this honed knowledge with them. This can create a serious skills gap within your organization, a disadvantage that 52 percent of SHRM survey respondents have identified.

Despite knowing the benefits older employees offer to their organizations and the major downsides that their impending retirement present, only 35 percent of HR professionals have analyzed what the aging workforce’s departure will mean for their business.

What You Can Do

This toolkit serves as an introductory guide to developing an aging workforce strategy at your organization. It includes resources on how to accommodate the rapidly aging workforce through workplace policies, education and benefits, how to develop a meaningful recruiting and retention strategy, and how to implement a mentorship program at your business.

Please note that this guide provides an overview of potentially applicable federal, state and local laws for educational purposes only. For legal advice, please consult legal counsel.

The Aging Workforce | Provided by: Employco USA, Inc.

HR and the Aging Workforce

It’s up to you and your organization to develop a compliant strategy to recruit and retain older employees. Being successful in this goal can require lots of effort on your end, especially if you haven’t been focusing on doing so yet.

As previously mentioned, baby boomers are remaining in the workforce longer than ever before. As their years of experience increases, so does the value of their skills and inherent industry and company knowledge. If you don’t plan accordingly, failing to recruit or retain these types of employees can cost your business in more ways than one. In addition to avoiding discrimination, in a tight labor market such as the one the United States is currently experiencing, it’s important to not dismiss a candidate just because of their age. Sometimes, the candidate who’s the best fit for the position and your company may not be who you first thought of.

In addition to spending money filling an unexpectedly open position, your business may also experience a skills gap as newer, less seasoned employees typically don’t have the depth of knowledge that a seasoned worker may have. To avoid facing high turnover costs and a skills shortage, it’s imperative that your company makes an effort to recruit and retain older employees. Consider implementing these strategies to recruit and retain older workers:

• Create and cultivate an age-positive culture.

• Offer flexible working schedules and arrangements (flextime).

• Provide ample health and wellness support.

• Offer caregiver/caregiving support.

• Make targeted skills training a priority.

• Introduce a mentorship program at your organization.

Using these strategies at your company can help you leverage the skills of experienced employees after they retire, transfer experience and knowledge to younger employees, retain older employees and recruit more experienced, older workers.

Making Your Workplace Flexible for the Aging Workforce

According to a National Institute on Aging study, 60 percent of retirees would be willing to return to work if they were offered flexible scheduling. What’s more? Twenty percent of retirees would be willing to take a 20 percent pay cut to receive a flexible schedule.

Having a flexible working environment means that your organization defines “work” differently and, as a result, new guidelines are established for when, where and how employees get tasks done. For 4

The Aging Workforce | Provided by: Employco USA, Inc.

employees, flexibility makes it easier to manage work, health and family obligations. It allows individuals to engage in their roles as a professional, parent or grandparent, coach, avid exerciser or homemaker all at the same time. Workplace flexibility also makes it easier to manage health care appointments.

There are many types of flexible working arrangements being implemented across the nation, which include:

• Part-time employment (reduced work hours)

• Flexible scheduling (employees are available within core hours during the day, but may vary the times they arrive in the morning and leave in the afternoon)

• Telecommuting (working from a remote location)

• Compressed workweeks (working a full schedule in fewer than five days)

• Telecommuting (working entirely through an electronic system without a formal work schedule or location)

• Unlimited paid time off (PTO) policies

Employers may offer these options on an as-needed basis or as part of formal programs for all employees. Employers can also create a workplace that is entirely flexible with no defined work schedule (known as a results-only work environment). Most employers tend to land somewhere in the middle and have formal yet flexible arrangements.

See the Appendix for flexible workplace sample policies.

Offering Caregiver Support

The National Alliance for Caregiving and AARP estimate that 70 percent of working caregivers suffer work- related difficulties due to their dual roles. Moreover, caregivers are forced to miss an average of 6.6 days of work annually because of their caregiving responsibilities. The annual cost of lost productivity due to caregiver absenteeism amounts to more than $25 billion.

As the baby-boomer generation continues to age, it is likely that younger employees will take on caregiver responsibilities. Of the 129 U.S. benefits managers surveyed by the Northeast Business Group on Health (NEBGH) and AARP, 66 percent agree that caregiving will become an important issue to their workers over the next five years. Forty-five percent of these managers say that caregiving benefits are one of their top 10 priorities for health and benefits issues.

According to a survey by the National Alliance for Caregiving and UnitedHealthcare, a large number of employees may be “closet caregivers” who fear that their boss or organization will think they’re not committed to their job if they also provide care for a loved one. This stressor, in addition to the stressors of working while taking care of an ill, elderly or disabled loved one, can lead to employees experiencing 5

The Aging Workforce | Provided by: Employco USA, Inc.

chronic stress. Chronic stress is not only bad for your employees and their well-being, but also for your organization and its bottom line.

Implementing caregiving benefits has been a step taken by many employers across the country to help alleviate some of the stressors caregiving employees face. By offering caregiving benefits at your organization, you will not only establish a culture that is supportive of caregivers, but you will also be giving your employees the tools they need to effectively manage their dual responsibilities.

Creating a Mentorship Program

Older employees typically have lots of industry and company knowledge, so it’s important to create opportunities for them to share such knowledge with younger employees. One effective way to do this is through implementing a mentorship program.

A mentor is an individual in the workplace who shares their knowledge and expertise to help another employee grow professionally. Mentoring programs can benefit not only the mentees, but also the mentors and the company as a whole. The following are some of the benefits of a mentoring program.

Benefits for the Mentee

Mentees can achieve the following benefits through a mentoring program:

The Aging Workforce | Provided by: Employco USA, Inc.

Benefits for the Mentor

Mentoring programs can also reap significant benefits for the mentors themselves, including the following:

Benefits for the Company

In addition, there are significant benefits that can be realized by your company:

Mentoring programs can be a low-cost way to increase retention, attract new talent and improve employee morale—all of which can help protect your bottom line for years to come.

The Aging Workforce | Provided by: Employco USA, Inc.

Providing Benefits Education Opportunities

It shouldn’t be surprising that, as workers get older, they’ll use your benefits differently. This means that you’ll need to adjust your benefits communications and education strategies accordingly. Some things to consider specifically include Medicare and retirement education.

Medicare Education

Medicare entitles individuals who are age 65 or over and eligible for Social Security benefits to receive hospital coverage and, at an additional cost, coverage for doctor’s services, outpatient care and other medical services. These are the two parts of Medicare, known as Part A (hospital insurance) and Part B (medical insurance). Medicare also has a prescription drug benefit (Part D).

With all the different parts of Medicare, it can be confusing for employees to understand how it works. To be able to explain it to them, you must know how it works. Here are the basics.

The Aging Workforce | Provided by: Employco USA, Inc.

Medicare Secondary Payer Rules

Federal regulations mandate how Medicare benefits are coordinated with employer health coverage. In most cases, Medicare will pay secondary and the employer’s health plan must pay primary. Specifically, Medicare benefits are secondary to employer plan benefits for individuals age 65 or over who have employer coverage as a current employee or the spouse of a current employee, if the employer has 20 or more employees.

These regulations also prohibit employers from discriminating against employees who are eligible for Medicare. Employers are required to offer employees age 65 or over the same group health plan coverage that is available to younger employees and may not take Medicare entitlement into account. Employers may not provide incentives for employees to waive employer coverage and enroll in Medicare instead. The employee and spouse have the option of choosing to enroll in the employer plan, Medicare or both. If they choose to enroll in Medicare, the employer may not offer secondary coverage.

The regulations do not require employers to offer health plan coverage if they do not normally do so. However, it does mean that employers must generally extend the coverage to employees who work past age 65 if the employer offers a health plan.

Retirement Education

Saving and preparing for retirement is a key component of your employees’ financial security. Unfortunately, the vast majority of Americans don’t have enough saved for retirement and too many assume that Social Security benefits will be enough to cover their living costs. That’s where you come in. Proper retirement financial education is essential to setting your employees up for success.

How to Provide Education

Educating your employees about their retirement benefits will increase participation rates and their appreciation of the benefits you provide. The following are strategies you can use to increase awareness of retirement benefits:

• Highlight the tools that are available to help employees manage their accounts successfully, such as your intranet, the 401(k) carrier’s website or a retirement calculator.

• Provide contact information for your retirement benefits carrier.

• Refrain from giving any financial advice directly from human resources or managers.

• Consider providing financial seminars hosted by experts.

• Look at the possibility of offering financial planning services as an additional employee benefit to complement your retirement benefits.

The Aging Workforce | Provided by: Employco USA, Inc.

• Contact Employco for access to employee educational materials that you can distribute to employees.

Key Points for Employees to Understand

When educating employees about their 401(k) plans, you will need to provide basic information such as the following:

• How to sign up

• How much employees can contribute

• How much—if any—the company will match

• How to set up automatic payroll deferral into the account

• What the fees are

• What the investment options are

In addition to basic account information, you should also educate employees about how the account works and how they can maximize their benefits and make the best decisions for their retirements. Consider providing resources to help employees navigate various decisions regarding their 401(k) plans, including the following:

• Employees should evaluate their levels of risk tolerance and make investment decisions accordingly. They should also consider how close they are to retirement and whether a low-risk portfolio is a wiser decision as retirement age approaches.

• Consider other retirement savings options, such as an IRA if the employee’s 401(k) contributions are maxed out.

• In a financial emergency, employees should carefully consider making an early withdrawal from retirement accounts. Not only will the money be subject to income tax, but it will, in most cases, trigger an additional penalty tax.

• Tax advantages and compound interest make a 401(k) account a far more important savings vehicle than a regular savings account.

Access additional retirement and financial resources in the Appendix.

The Aging Workforce | Provided by: Employco USA, Inc.

Legal Considerations

There are a host of potential legal issues when focusing on implementing policies focused on the aging workforce. Age discrimination is one of these issues. The Equal Employment Opportunity Commission (EEOC) reports that 21.6 percent of 2017’s workplace discrimination claims were age-related.

What laws are in place to prevent age discrimination?

The Age Discrimination in Employment Act of 1967 (ADEA) protects individuals who are 40 years of age or older from employment discrimination based on age. The ADEA’s protections apply to both employees and job applicants. Under the ADEA, it is unlawful to discriminate against a person because of his or her age with respect to any term, condition or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments and training. The ADEA permits employers to favor older workers based on age even when doing so adversely affects a younger worker who is 40 or older.

It is also unlawful to retaliate against an individual for opposing employment practices that discriminate based on age or for filing an age discrimination charge, testifying or participating in any way in an investigation, proceeding or litigation under the ADEA.

The ADEA applies to employers with 20 or more employees, including state and local governments. It also applies to employment agencies and labor organizations, as well as to the federal government.

Employee Benefits and Age Discrimination

The Older Workers Benefit Protection Act of 1990 (OWBPA) amended the ADEA to specifically prohibit employers from denying benefits to older employees. Congress recognized that the cost of providing certain benefits to older workers is greater than the cost of providing those same benefits to younger workers, and that those greater costs might create a disincentive to hire older workers.

Therefore, in limited circumstances, an employer may be permitted to reduce benefits based on age, as long as the cost of providing the reduced benefits to older workers is no less than the cost of providing benefits to younger workers.

Employers are permitted to coordinate retiree health benefit plans with eligibility for Medicare or a comparable state-sponsored health benefit.

Can I ask employees to waive their rights?

An employer may ask an employee to waive his or her rights or claims under the ADEA only in very limited circumstances and when specific requirements are met. Such waivers are common in settling ADEA discrimination claims or in connection with exit incentive or other employment termination programs. However, employees cannot be asked to sign a blanket waiver of rights that would cover claims that could arise in the future during the employment relationship. 11

The Aging Workforce | Provided by: Employco USA, Inc.

The ADEA, as amended by OWBPA, sets out specific minimum standards that must be met in order for a waiver to be considered knowing and voluntary and, therefore, valid. Among other requirements, a valid ADEA waiver must:

1. Be in writing and understandable

2. Specifically refer to ADEA rights or claims

3. Not waive rights or claims that may arise in the future

4. Be in exchange for valuable consideration in addition to anything of value to which the individual is already entitled

5. Advise the individual in writing to consult an attorney before signing the waiver

6. Provide the individual at least 21 days to consider the agreement and at least seven days to revoke the agreement after signing it

If an employer requests an ADEA waiver in connection with an exit incentive program or other employment termination program, the minimum requirements for a valid waiver are more extensive.

Source: EEOC

The Aging Workforce | Provided by: Employco USA, Inc.

Conclusion

Workers are retiring later than ever before, and if your company hasn’t implemented policies to accommodate the aging workforce, it should invest in doing so. In addition to facing high turnover costs, your organization may also face a large skills gap created by the aging workforce’s departure. It’s up to you and your organization to develop a compliant strategy to recruit and retain members of the aging workforce. Contact us today for more resources on this topic.

The Aging Workforce | Provided by: Employco USA, Inc.

Appendix Sample Policies This section of the appendix includes a handful of sample policies. These policies are also available as stand-alone documents. Contact Employco to access these versions.

Workplace Flexibility Scorecard Use this scorecard to evaluate how flexible your organization is.

Mentorship Program Sign-up Questionnaire Have mentors and mentees sign up for your mentorship program with these forms.

Make the Most of Medicare Infographic Use this infographic to provide employees with Medicare tips.

Are You Ready for Retirement? Infographic Use this infographic to make saving for retirement a top-of-mind concern.

The Aging Workforce | Provided by: Employco USA, Inc.

Flextime Policy

Standard working hours are from [insert hour] to [insert hour], Monday through Friday. A [insert amount of time] lunch period is taken at any hour, which is mutually agreeable between the employee and supervisor.

Flextime is an option available to improve departmental efficiency and morale. Flextime may not be appropriate for all departments or all positions. It is each manager’s responsibility to manage the program so that it will serve the business requirements of the department. The basic principles of flextime are:

• Manager approval is necessary for any department to participate in flextime.

• The work commitments of the department must be able to be met effectively and efficiently without compromising service to internal or external customers.

• Each employee must recognize his or her responsibilities to the company and to colleagues.

• Each employee that uses flextime must work cooperatively to ensure that no problems arise with regard to internal or external service.

• Employees utilizing flextime should establish “standard” hours (i.e., 7 a.m. to 4 p.m. every day) and should not vary hours significantly from day to day, week to week or month to month.

Employees will work a consistent schedule using the following guidelines:

• Shifts must be completed between 6 a.m. and 6 p.m.; start and end times are subject to approval.

• Employees must take either a one-hour or a half-hour unpaid lunch period. Lunch should normally be taken between 11 a.m. and 2 p.m., and should be mutually agreed upon between the employee and his or her supervisor.

Employees cannot work through their lunch period to make up time unless prior supervisor approval is obtained. Such occurrences should be infrequent.

At each manager’s discretion, summer hours may be offered to a department, regardless of whether or not flextime is offered. When using summer hours, employees work four nine-hour days and one four- hour day, however, variations to this schedule may occur with management approval. It is each manager’s responsibility to manage the program in such a way that there is appropriate departmental coverage at all times.

As with flextime, summer hours may not be appropriate for all departments or all positions. Based on business needs, summer hours can be discontinued at any time.

The Aging Workforce | Provided by: Employco USA, Inc.

Paid Time Off Policy

believes that employees should have opportunities to enjoy time away from work to help balance their lives. For this reason, we provide a paid time off (PTO) program to all full-time (if applicable: and part- time) employees.

PTO provides employees the freedom to decide how to use their personal time off. believes this program offers more generous time off with pay than traditional vacation, sick and personal time packages. Employees can use their PTO days in a number of different ways, for example:

• As vacation • For personal business • For periods of illness • For doctor or dental appointments • For personal emergencies • For family emergencies • In the event of severe weather or adverse driving conditions

PTO does not replace the Company holiday schedule. We will continue to have compensated holidays each year.

Eligibility for PTO All full-time (if applicable: and part-time) employees are eligible to earn PTO on a [pick one: weekly/monthly] basis. Full-time employees earn PTO by working at least [insert # of hours] hours per week (if applicable: while part-time employees earn PTO by working at least (insert # of hours) hours per week).

PTO Accrual Employees accrue PTO hours after [insert # of months] months of employment. After that point, full-time employees will accrue PTO hours each pay period. Accrued PTO is available for immediate use. (If applicable: Part-time employees will accrue PTO hours at a rate of 50 percent of full-time employees.) Employee PTO is capped at [insert # of hours] hours.

Employee PTO Accrual Table Date of Hire Eligibility Date Hours Accrued Maximum Accrual Hours for [insert year]

The Aging Workforce | Provided by: Employco USA, Inc.

Maximum PTO Accrual As mentioned above, employee PTO is capped at [insert # of hours] hours. Therefore, would like to remind employees to use their PTO before reaching their maximum accrual, so additional PTO accrual time is not lost.

Use and Management of PTO encourages employees to use their PTO responsibly and, whenever possible, to schedule time for vacations or personal leave appointments in advance. Every time-off request will be evaluated and subject to approval depending on staffing needs at the time. understands there may be occasions, such as a sudden illness, when you may not be able to give sufficient advance notice. In those situations, be sure to inform your supervisor as soon as possible.

PTO also includes time off for unexpected emergencies or illness. Do not use PTO to cover time missed from work due to tardiness, except in the case of severe weather.

Types of Non-PTO Leave Situations that require time off such as jury duty, bereavement and workers’ compensation will not be charged against your accrued PTO. Note: See separate policies on those topics to address these situations.

PTO Tracking has an automated PTO tracking system to keep a record of your accrued PTO balance. The amount of PTO accrued, used and available will be itemized on your paycheck stub each month for your records.

List of Paid Company Holidays

• New Year’s Day • Thanksgiving

• Good Friday • Day after Thanksgiving

• Memorial Day • Christmas Eve

• Independence Day • Christmas Day

• Labor Day

NOTE: Employers should review applicable local and state laws regarding paid sick leave. If an employer wants their PTO policy to comply with a paid sick leave law, the policy must generally meet the minimum requirements for accrual and usage, as provided under the applicable paid sick leave law.

Flexible Workplaces | Provided by: Employco USA, Inc.

Telecommuting Policy

Purpose This policy establishes the guidelines will use to select and manage those employees approved to telecommute.

Scope This policy applies to all employees authorized to work remotely as a primary job function. It does not include those who are temporarily allowed by their managers to work from home or other location on an irregular basis due to extenuating circumstances.

POLICY GUIDELINES

Definitions Telecommuting is defined as working from a home or other off-site location using electronic communications, such as the internet, to connect with the primary place of employment.

Criteria for Selection always strives to provide equal opportunities to all employees when it comes to working situations. However, telecommuting is not conducive to every employee and position. Keeping this in mind, will review all reasonable employee requests to telecommute using the following criteria:

• Is the employee a good candidate for telecommuting?

o Dependable o Flexible o Proven performance o No record of disciplinary action o Comprehensive knowledge of position

• Can the duties of the position be successfully fulfilled through telecommuting?

o Measurable work activities o Little need for face-to-face interaction with co-workers o Clearly established goals and objectives o Duties can be performed alone o Equipment needed is limited and can be easily stored at the off-site location Note: The management of reserves the right to deny or revoke telecommuting privileges at their own discretion.

Responsibilities

Flexible Workplaces | Provided by: Employco USA, Inc.

Position requirements and responsibilities will not change due to telecommuting. Workers face the same expectations in relation to professionalism, work output and customer service, regardless of where the work is being performed. The amount of time an employee is expected to work in a given week will not change, although the exact scheduling of allotted hours will be left up to the discretion of the employee’s direct supervisor(s). If an employee’s physical presence is required at ’s primary work location, he or she is expected to report once given adequate notice.

Contact with Primary Location Employees approved for telecommuting are responsible for maintaining regular contact with their supervisor(s). The supervisor(s) will act as the employee’s primary contact at . Both the employee and his or her supervisor(s) are expected to work together to keep each other informed of any developments that occur during the workday.

Employees must have approval from their supervisor(s) to: • Alter their defined work schedules. • Move company equipment to a new location. • Transfer primary off-site operations to a new location.

Off-site Work Areas has a legal responsibility to provide liability and workers’ compensation coverage to its employees. Such legal responsibilities extend only to authorized, off-site work locations during scheduled work time. is responsible only for injuries, illnesses and damages that result directly from official job duties. also accepts no responsibility for employees’ personal property.

As could foreseeably be held responsible for an injury befalling an employee in their off-site work area, reserves the right to inspect off-site locations for safety concerns. Such an inspection will always be planned in advance for a time convenient for both the inspector and the employee.

If employees have domestic responsibilities they must attend to during scheduled working hours, they are expected to do so in a reasonable manner that will still allow them to successfully fulfill their job duties.

Off-site Security While positions that regularly deal with highly sensitive information may not be ideal candidates, under certain circumstances such employees may be allowed to telecommute. In these situations, it is up to the employee to enforce a rigorous standard for ensuring the security of all sensitive information entrusted to them. Failure to do so will result in loss of telecommuting privileges.

Expenses Working primarily off-site could result in expenses not directly addressed by this policy. If such expenses are necessary for their official duties as prescribed, will reimburse the employees. However, since reimbursement is subject to management approval and is not guaranteed, potential expenditures should always be approved prior to the transaction being made.

Flexible Workplaces | Provided by: Employco USA, Inc.

Equipment Employees approved for telecommuting will be supplied by with the equipment required to perform their duties. It must be kept in mind that: • All equipment purchased by remains the property of . All equipment is to be returned in a timely fashion should the employee cease telecommuting operations for any reason. • Hardware is only to be modified or serviced by parties approved by . • Software provided by is to be used only for its intended purpose and should not be duplicated without consent. • Any equipment provided by for off-site use is intended for legitimate business use only. • All hardware and software should be secured against unauthorized access.

Workplace Flexibility Scorecard

Please contact Employco for more information on or resources for workplace flexibility.

Highly flexible: 6-8 points

Flexible : 3-5 points

Not flexible: 0-2 points This HR Toolkit is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. © 2018 Zywave, Inc. All rights reserved. © 2018 Zywave, Inc. All rights reserved.

The Aging Workforce | Provided by: Employco USA, Inc.

Mentorship Program Sign-up Questionnaire

The Aging Workforce | Provided by: Employco USA, Inc.

Medicare 101 Infographic

The Aging Workforce | Provided by: Employco USA, Inc.

5 Ways to Get Ready for Retirement Infographic