Question

Employee Benefits, 6th edition, Martocchio

Chapter 3, Caso 2

2. 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.

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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 an adverse impact against women

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

Answer 1

Yes, Staffon's time-off policy is potentially discriminatory. The benefits of time-off policy are based as per the law and there is a clear business justification for providing better benefits to one group over the other. However, women in the organization are at the receiving end of this policy because of their low representation at higher paying roles. The two different time-off policies result in women receiving lesser benefits then me in the company. Staffon may consider making changes to their time-off policies to represent equal benefits for women. Further, their bigger concern must be towards addressing the gender bias at higher payscale positions of manager and consultant. I would suggest them to make temporary changes to their policy to reflect better benefits for Women and switch back to original policy once they have fixed the disparate representation of women at higher payscale roles.