Question

Managing Employee Benefits: A Discriminatory Time-Off Policy

As Karen Jarrod looked over her notes from the human resources (HR) compliance audit that she conducted at her new company, she decided she needed to take a closer look at the company’s time-off policies. Karen joined Staffon Consulting three months ago as the Director of Human Resources for the 1,500-employee company. Her first project in her new role was to review all of the company’s HR practices and policies to identify any legal compliance concerns. A report on the gender mix in the company’s workforce suggests she should take a closer look at some of the company’s policies. Karen’s report suggests some gender imbalance in positions throughout the company. The company essentially has three broad groups of employees: managers, consultants, and clerical staff. As the table below summarizes, overall, women represent nearly half of the company’s employees. However, women are poorly represented in both the manager and consultant categories. This is a concern to Karen because the manager and consultant categories are the higher-paying positions in the company and represent greater career opportunities. Only 20 percent of the managers are women, and only 32 percent of the consultants are women. However, women comprise 75 percent of the clerical staff. Karen notes that she needs to examine the company’s hiring, performance management, and promotion practices to make sure that those processes are free of bias or barriers that prevent more women from becoming managers or consultants. Gender Diversity at Staffon Consulting Position Men Women Total Manager 160 (80%) 40 (20%) 200 Consultant 476 (68%) 224 (32%) 700 Clerical Staff 150 (25%) 480 (75%) 600 Total 786 (51%) 744 (49%) 1500 As Karen notes the lack of gender diversity in these positions, she considers the impact beyond the potential problem of the disparate pay of women in the company. In starting to look at the impact, she notes that there may be a concern with the company’s time-off policies. The company has two policies for time off, one for employees who are classified as exempt workers under the Fair Labor Standards Act and another for employees that are nonexempt. The time-off allocation for exempt workers is fairly generous. Exempt employees are eligible for two weeks of vacation each year upon hiring and three weeks of vacation after five years of service. Exempt employees also receive five personal days each year and may take sick days on an as-needed basis. Nonexempt employees receive one week of vacation each year after one year of service and two weeks of vacation after five years of service. Nonexempt employees receive two personal days each year and are limited to three sick days each year. Karen’s concern is that because the managers and consultants are exempt and the clerical staff is nonexempt, the company’s time-off policy may have adverse impact against women.

1. Do you think that women are underrepresented in Staffon’s workforce?

2. Do you think that Staffon’s time-off policy is discriminatory?

Answer 1

1. Absolutely. Women are women are underrepresented in Staffon’s workforce. This is evidenced from Karen Jarod’s audit which states that about 75% of women are clerical staff whereas managers are 80% men. Additionally, the audit shows that 68% of men are consultants in the company. The managerial and consultant categories are the higher-paying positions in the company and represent greater career opportunities whereas clerical staff do not have these benefits. They are underpaid and no opportunities are provided for their growth.

2. Absolutely. Staffon’s time-off policy is similar to the above classification and categories of men and women in the job categories. Time-off policies are classified further into two policies: one for employees who are classified as exempt workers under the Fair Labor Standards Act and another for employees who are non-exempt. Time-off policies are more generous for exempt employees and it is to be noted that only manager and consultant categories are exempt. This means that men in manager and consultant roles receive the plethora of benefits for being exempt whereas the women in the clerical staff and non-exempt time-off policies receives only few benefits.

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