Wednesday, December 31, 2008

Love Contracts - Making Things Easier

The workplace world is more intense than ever. And the likelihood that a workplace romance will develop is increasing - A 2007 Spherion survey showed that about 40% of U.S. workers have dated a co-employee, and another 40% would consider a workplace romance.

Employers generally cannot prohibit employees from dating one another (although you can prohibit supervisors from dating subordinates) - yet 50% of all sexual harassment cases begin when the relationship was consensual.

A non-fraternization policy in your handbook is a start, but generally isn't good enough. More and more, businesses are starting to rely on love contracts as a method to mitigate the chance of problems when the romance eventually turns sour.

Joseph Gagnon, writing on behalf of Fisher & Phillips LLP, says that
Properly implemented and appropriately drafted, love contracts will reduce the likelihood of litigation arising from workplace relationships.
To my knowledge, love contracts haven't been fully tested in the courts yet - but Gagnon's outline of what should be in a 'love contract' and its benefits are useful reading.

Here's the full article.

Tuesday, December 30, 2008

Out of State Residents Subject To California Labor Law While Working In State

If you have employees who occasionally work in California, here's some important news for you.

Sullivan v. Oracle Corp, a recently decided federal appeals court decision, found that California labor law applies to nonresident workers. While the decision was based primarily on exempt/non-exempt status of two Colorado-based employees, the ramifications are endless, as outlined by Christopher W. Olmstead:
  • Does the company have sufficient ongoing contacts within the state of California, such that under the Oracle court’s ruling, California labor laws should apply to its workers while working in California?

  • Does the applicable California labor law provide superior protection to the out-of state resident? (In most cases, the answer will be “yes” because of California’s more rigorous laws.)

  • What rights under California law apply to the workers? Consider, for example, wage and hour law (e.g. exempt status, overtime, meal and rest periods), and fair employment practices (e.g. disability law).
If you have non-California employees who work in California - even infrequently - contact your employment attorney.

If it can happen to Oracle, it can happen to you.

Courtesy Barker Olmsted & Barnier

Monday, December 29, 2008

Bad Bosses and Your Health

Working for a bad boss is never fun.

Now, Swedish researchers have shown that working for a bad boss can kill you.

Employees who worked for four years with managers who were inconsiderate, opaque, uncommunicative and poor advocates were about 60 percent more likely to suffer a heart attack or other life-threatening cardiac condition.

The study tracked 3,100 men over a 10 year period. And it shows that despite best intentions, what happens on the job doesn't stay at the job - people take it home with them.

Is it really worth a job to be tortured by a bad boss? No. Life is too short.

And if you're a boss who doesn't know if you're good or bad - it's time to find out.

Courtesy Fort Worth Star Telegram.

Saturday, December 27, 2008

A "Family Atmosphere" in the Workplace?

I generally get concerned when hearing about a business that cultivates a 'family-like atmosphere'. Although noble in intent, the fact is that you are a business - regardless of your intentions or the size of your operation. I can list case after case where a business owner who wanted to create a 'family' atmosphere ended up getting burned by the eventual employee who becomes disgruntled at work.

And think of the phrase - "we're like a family here". Families have break-ups, problems and issues - and so do businesses.

So when I read this article in the Wall Street Journal, I had reservations.

Decagon Devices, a Pullman, Wash., scientific instruments and sensor maker with about 70 employees, won a Top Small Business Workplace award from the WSJ.

Decagon's CEO, Tamsin Jolley, admits that she had to let some employees go. Although those employees fit in with the corporate culture, they simply weren't doing the job.

It's a short but interesting read. And what I particularly appreciate about Jolley's comments is when she says
" has do to with the value we place on employees...I think it also facilitates communication and employee input across all areas of the company, because employees that know each other well are more willing to speak up and share their ideas with each other."
THAT'S a good corporate culture. Not necessarily creating a 'family', but creating a workplace conducive to communication and productivity.

Thursday, December 18, 2008

Common Sense

Most human resource issues can be focused into one area: practicing common sense.

Jessica De Vault, a columnist for the Fayetteville Observer, went to a corporate holiday party as a guest of an employee. She'd never been to such a party before. After attending, she was moved to write this column outlining ways to behave at a company party.

Ms. De Vault is not a human resources professional nor employment attorney (as far as I know). But her advice is absolutely spot on.

Most of the time, common sense (if actually practiced) is the best way to develop and follow guidelines for good professional behavior.

Wednesday, December 17, 2008

Wal-Mart Settles A Wage & Hour Lawsuit

Over $54 million to settle a lawsuit to workers in just the state of Minnesota.

What did Wal-Mart do this time?

Allegedly, the cut their workers' rest breaks and didn't prevent workers from working 'off-the-clock' in a 10-year period ending last month.

Employees read articles like this and see an opportunity to win the lottery. It's especially prevalent in bad economic times. (In good economic times, it tends to be only disgruntled employees who look to cause trouble).

If Wal-Mart, with a huge staff of human resource professionals, can have this happen - it most certainly can happen to you.

Review your Wage & Hour practices as part of a comprehensive employment audit of your operations.


Tuesday, December 16, 2008

Wage & Hour Issues Engulfs Tom Colicchio

Tom Colicchio, owner and chef at the Craft restaurant empire, is the latest in a never-ending line of employers who have been sued for wage and hour issues.

This time, it's misappropriating employee tips and withholding overtime pay that's alleged in a lawsuit filed by a former employee.

I cannot more highly recommend that any restaurant owner immediately contact an employment attorney or qualified human resources consultant to review tipping practices
Craftsteak Restaurant at the MGM Grand Las Vegas

and all wage and hour issues. It's happening to restaurants like Craft to Starbucks, and it can happen to you.

Sunday, December 14, 2008

Who Should Produce Your Employee Handbook?

It's that time of year again - when businesses need to update their employee handbook - or begin to create one from scratch.

There are 4 ways to do an employee handbook:

1. Have your attorney do it
2. Do it yourself
3. Borrow someone else's (a truly bad idea);
4. Get a qualified consultant to do it.

In this new video release (just a minute long), I discuss the pros and cons of these four alternatives.

Thursday, December 11, 2008

Porn in the Workplace

A new report in Newsweek shows than employees watching internet pornography at work has risen 23% in the past year.

The article quotes several thoughts on the rise:
  • Employees are looking for 'an escape';
  • The huge proliferation in "adult" websites;
  • A younger workforce that believes porn is 'not that big a deal';

Porn Star Valentina Vaughn

The last reason resonates with me - maybe porn is (or isn't) that big a deal to individuals - but it certainly must be for employers.

There's the lost productivity; increased chances of sexual harassment lawsuits; and the potential for viruses that infect many porn websites.

All businesses should have a written policy stating the internet and company-e-mail is for business use only. And discipline needs to occur immediately when violations are found.

Finally, consider having sexual harassment training at your business. The examples many of us have for the lost revenue to employers around the country should result in a sobering experience for everyone.

Tuesday, December 09, 2008

Newspaper Settles Sexual Harassment Lawsuit

I mean, really. As if newspapers didn't have enough problems these days, the Minneapolis Star-Tribune will now have to pay more than $300,000 to two women who accused the paper of sexual harassment.

The charges included vulgar comments, dirty jokes and sex-based statements, according to the EEOC (which filed the lawsuit).

The Star Tribune also agreed to:
  • Take steps toward preventing sexual harassment or retailiation against female employees in the mailroom;
  • Ensure it employs a mailroom supervisor or manager for every shift;
  • Employ a human resources representative responsible for mailroom functions, including monitoring and resolving any complaints; and to
  • Also will provide annual sexual harassment training.
Wouldn't it have been cheaper to do all that before?

From the Minneapolis/St. Paul Business Journal

Monday, December 08, 2008

Tip Pooling and the Las Vegas Casino

Among the most prevalent wage & hour issues in the concept of tip pooling - where employees eligible for tips have all their tip money collected and then distributed - based on factors such as hours worked, time off, etc.

Tip pooling can go horribly wrong (Starbucks was recently ordered to pay $100 million) or it can go well for employers.

Recently, the Wynn Hotel & Casino won a Nevada Supreme Court decision. Wynn made significant changes to their tip pooling program in 2006 (a year after the resort opened) - because supervisors were making less than dealers. The dealers sued, but in an affirmation of an employers' ability to make policy changes with at-will employees (Wynn is not a union shop) - the Supreme Court said the dealers could not pursue their lawsuit.

An excellent summary is from our friends at Jackson Lewis.

Sunday, December 07, 2008

Flexibility During An Economic Crisis

Some of the best advice I've seen for employers during this economic crisis is the need to immediately become flexible.

It's not as easy for large, entrenched companies as it is for smaller companies used to moving and changing rapidly.

But businesses that have adopted flex-options have saved real money by redistributing willing workers’ time. They’ve seen:
  • Increases in both worker and client satisfaction;
  • Retention of well-trained and productive employees; and
  • An increase in employee morale.
Flexibility means creating a cohesive relationship between you and your employees. Before doing a knee-jerk reaction (eliminating jobs altogether), consider what alternatives are available. After all, when the economy rebounds eventually, you're going to need your best employees to help lead the way. Hiring a bunch of new employees when business picks up will not result in proportionately great results.

Consider, the following - as suggested by Dr. Malcolm Smith in the New Hampshire Business Review:
  • Flexible hours that allow workers to get their job done and still have time for family and personal life needs;
  • A compressed workweek that enables employees to work allotted hours over fewer days;
  • Flexible leave, which allows for paid time off to care for children or aging parents, personal illness, personal issues and parental leave for birth, adoption or care of a foster child (this is required for all businesses in California and businesses with more than 50 employees nationally); and
  • Flexible career-planning, which allows for phased–out retirement, as well as professional-development leaves and sabbaticals.
Most importantly - make sure to communicate frequently with your employees on your intentions - get their input. You'll be surprised what happens when everyone works together.

Thursday, December 04, 2008

IRS Lowers Standard Mileage Rates

Gas prices are plummeting, and the IRS has responded by lowering the 2009 Standard Mileage rates.

Effective January 1, the standard business rate will be 55 cents per business mile, down from the current 58.5 cents per mile.

If you reimburse your employees for business travel, I strongly encourage you to put a policy in your handbook that says something along the lines of "Business mileage will be reimbursed at the IRS standard mileage rate." (Make sure this policy, as well as all handbook policies, are legally reviewed).

You don't want to be too specific with the mileage rate; otherwise, you'll be changing your handbook too frequently (this is the third IRS mileage rate change in the past year).

Read the IRS announcement here.

Wednesday, December 03, 2008

Car Wash Employees Get $450,000

Many employers believe that only the 'big companies' can get into trouble with Wage & Hour issues. This belief is usually supported by the media - it's always good copy when a large employer gets hit with a multi-million dollar fine.

But that's not true! All businesses - regardless of size - are liable for violations of wage & hour issues. Like the car wash in Redondo Beach, California.

Turns out the car wash was paying about 60 employees for the first four hours of work, and then letting them work for 'tips only' for the rest of the day.

Big problem.

The California Labor Board conducted an investigation starting in 2006, which resulted in a lawsuit in 2007.

The award, announced in November 2008? $450,000 for those 60 employees.

Can your business survive a fine like that? If not, make sure you're intimately familiar with all wage and hour issues. Get a consultant or employment attorney to audit your practices to ensure you're in compliance.

Monday, December 01, 2008

Retaliation on the Rise - Again

In 1997, retaliation claims comprised about 23% of all cases filed with the EEOC. Last year, that number jumped to 32.3%.

Why the increase?

For one, employment attorneys advise that it's much easier to prove retaliation than the underlying cause (say, sexual harassment). While harassment may often boil down to 'he said, she said', retaliation is often black-and-white.

I've conducted workplace investigations where we were convinced there was no harassment, only to find out an employer retaliated against that same employee. In other instances, I've seen an employee's attorney not contest the harassment only to focus on the retaliation.

Robin Shea, writing in Costangy, Brooks & Smith's corporate newsletter, does an excellent job of summarizing the issues with retaliation.

Sunday, November 30, 2008

Managing A Moody Employee

I like to surround myself with people who are positive. There's nothing more disheartening than having to spend time with people who are negative. Energy - whether positive or negative - absolutely can affect your attitude and those around you.

It's one of the reasons I counsel my clients on interviewing to focus solely on attitude and aptitude. Those are the two things you cannot manage or train.

But eventually we all come into contact with a moody employee - someone who's attitude swings up-and-down all too frequently.

How do you manage a moody employee?

The first step is to focus on why they're moody. Is it a personal issue, or an issue with you, or your company?

Annette Fazio of Seacoast Online has some good tips. All deal with communicating with that employee and asking him or her:

What do you like best about working here?

What do you like least?

What specifically do you like about the way the office/business is handled?

How do you think the phone should be answered? How many rings? Why?

Ask for the employee's solutions to the problem. If he or she doesn't see a problem, that's another red flag. Unless you are skilled at open-ended questions, write them out first. We tend to ask closed-ended questions that require a yes or no answer, and they don't lead you to any solutions. Your aim is to get your employee to talk.

Asking open-ended questions puts the burden on the other person to be responsible for their own attitude and behavior.

Ask permission to take notes. It makes a statement about the serious commitment you have to the employee and your team, and the notes will be handy if you need to have future conversations regarding the situation.

Notice the questions are open-ended; they require more than just a 'yes' or 'no' answer.

This takes care of the business issues that can cause moodiness. If it's personal, don't get into the issues - but remind that employee you expect that everyone's personal life should be left at the door when work starts.

If an employee can't do that, then it's time to start counseling that person out. Negativity is a killer in any workplace.

Tuesday, November 25, 2008

How To Inspire Like Obama

The bad economy brings out fear among workers across America. These workers are looking to their leaders to take measures to improve the situation both in government and in their own workplace.

Instilling confidence is a key trait of all leaders, and inspiring passion is one of the most difficult traits for a new managers to learn.

How do you inspire your team when there's gloom and doom all around?

Effective communication is the key.

Carmine Gallo, a communications coach, points to Barack Obama, who is without question an inspirational figure. But Obama is both inspirational within himself (just look at his life story and who he is) and has the unique ability to inspire others with his remarkable communication skills.

In the November 11 issue of Business Week, Gallo illustrates 7 techniques Obama uses that you can use as well:

Exude passion.
Have a clear, concise vision.
Sell the benefit.
Paint pictures.
Invite participation.
Radiate optimism.
Encourage potential.

I'll add one more - be realistic with your employees.

Sunday, November 23, 2008

Managing Proactively

Many managers make the mistake of letting poor behavior get out of control before stepping in.

One of my maxims on management is: What you allow, you encourage.

When you see inappropriate behavior, address is immediately.

In this Q&A from the Fort Wayne (IN) Journal Gazette, a manager asks if she needs to address issues stemming from a direct report. "Even if she bugs me, do I need to talk to her?"

The answer, from Daneen Skube, is correct of course: "Yes, you do."

A better question, from my perspective, is - "Why did you wait so long to do it?"

Good managers - like good parents - address bad behavior immediately. It may seem easier to avoid a potential confrontation, but once the issue exacerbates, it's must more difficult to correct it.

Thursday, November 20, 2008

Workplace Investigations Actually Work!

When faced with an employee issue - whether an allegation of harassment, a general complaint, or a potential for trouble - the first thing to do is conduct a workplace investigation - pronto.

An independent investigation can alleviate much of the power of a lawsuit, because it shows that steps were taken to solve the issue in a deliberate and professional manner.

Howard University's hospital was recently the beneficiary of conducting an investigation. An independent review undertaken by the Hospital's senior officials satisfied the U.S. Appeals Court that the Hospital's decision to suspend an employee was free from any influence by her supervisor and the court reversed a jury's determination.

The case - Furline v. Morrison - is summarized very well by Karen Gieselman of Fisher & Phillips.

Wednesday, November 19, 2008

The Best Boss I've Ever Had

I frequently conduct Leadership Development Programs for leaders at businesses throughout the country.

Recently, I was conducting this program for a professional services firm in Nevada. I asked the 6 executives in the room to think of the best boss they ever had. Once they had, I asked what was it that made them a great boss.

Their answers were so insightful I thought I'd share them with you:
  1. Believes In Me/Looks Out For Me
  2. Pushed Me; Has High Expectations for me
  3. Lines of Communication are open; asks my opinion
  4. Does not micromanage, but holds me responsible
  5. Supports and encourages me
  6. Treats me as an equal/respects me
  7. Teaches me about both techinical and management issues
  8. Works With Me
Can you say that about your own management style?

Monday, November 17, 2008

Treating Employees With Fairness

The way you treat an employee often makes more points with juries than legal technicalities.

Jeffrey Wortman, a partner at the Los Angeles office of Seyfarth Shaw, LLP, spoke on ways to treat employees fairly at a recent BLR National Employment Law Update conference in Las Vegas.

His Fairness Tenets:

  1. Adequate notice.
  2. Opportunity to achieve.
  3. Consistency.
  4. Document as you go.
But most the most important concept is that fairness starts with you - the manager.

The entire article, courtesy of the California Employer Advisor, is here.

Thursday, November 13, 2008

Communication is the Key For Employers in Difficult Times

In every employee survey nationwide, workers frequently complain about the lack of communication they receive from their bosses. Employees want to know what's going on.

And in this dreadful economy, communication is more important than ever. It's my #1 recommendation for clients asking about how to manage through this downturn.

Some more validation for this advice comes from Hanah Cho at the Baltimore Sun, who quotes a study that says

71 percent [of workers] believe that their company's leaders should be communicating more about current economic problems. And 54 percent of workers said they have not heard from management at all on the impact of the financial crisis on their companies.

Employees have a right to know what's going on in their company. Avoiding these discussion leads to higher anxiety, and lower productivity.

Wednesday, November 12, 2008

"Cheaters" Caught Cheating?

According to the Dallas Morning News, the popular television show "Cheaters" has been sued by the Equal Employment Opportunity Commission for alleged sexual harassment.

No business is immune from charges of sexual harassment; but I frequently run into businesses that attempt to refute these charges by saying something like, "but that's the way our business is."

Nonsense. No business is immune - whether it's in the pornography industry or a white collar, high-tech office.

Take steps to prevent harassment from occurring and remember, no one is immune.

Monday, November 10, 2008

Brinker Gets A Review

As we suspected, the California Supreme Court has granted review of the California Court of Appeal's decision in Brinker Restaurant Corporation v. Superior Court, which interpreted California's meal and rest break requirements.

A California Court of Appeal held, back in July, that:
  1. Employers need only provide, not ensure, that rest and rest periods are taken;
  2. Employers need only authorize and permit rest periods to be taken for every four hours or major fraction thereof worked;
  3. Employers are not required to provide a meal period for every five consecutive hours worked; and
  4. Employers can only be held liable for employees working off-the-clock if the employer knew or should have known employees were doing so.
The Court may take up to one year to final decision in Brinker. In the meantime, employers are strongly urged to stay the course, or consult your employment attorney or a qualified HR consultant.

With thanks to Ford & Harrison's Jesse Caryl.

Sunday, November 09, 2008

2009 Pay Raises in a Bad Economy

The economy is not good (not a surprise there). But how does a business in the midst of that economy find an equitable way of managing any increases in pay for employees?

First, understand that the most valuable employees are the ones who contribute the most to your bottom line success. Identify them. What are they currently making, and are they in an acceptable range versus your competition? (Compensation studies can be incredibly helpful and well-worth the cost).

Secondly - what is the level of difficulty replacing that employee? If they leave, who is going to replace them? The best employees always have the most options for success outside of your company.

Finally, communicate. Consider a modest employee satisfaction assessment program. Find out what employees' concerns are; what they are looking for from you (or in the job marketplace). Take those general trends and apply them to each individual working for you - and then sit down with them one-on-one. Let them know what's going on in the business.

The short-term economic difficulties are just that - short-term. Make sure to balance your long-term corporate goals against your short-term needs.

Wednesday, November 05, 2008

Leading Through Difficult Times, Part 2

I recently wrote about my own theories on managing and leading in a down economy. Maureen Moriarty, whom I respect and frequently quote, has her own (similar) theories. In a nutshell:

What can leaders do?
  • Communicate frequently with the 3 C's: clearly, credibly and candidly. During a crisis, communication is more important than ever. Ambiguity and uncertainty equate to stress. If you go silent, people will make up their own stories about what's really going on with you and the company. Rumors often generate negativity and fan the flames of fear and anxiety.
  • Keep connected. Manage by walking around. You can't afford during times like these not to know what's really going on. Be diligent in seeking out information, even the bad news. It's a mistake during a crisis to hide out in your office with the door closed. Nervous followers need comfort and reassurance from their leaders. Be visible and keep checking in with all levels of staff to see how people are doing.
  • Ask yourself, "What kind of emotional wake do I want to leave behind me today?" The emotions of a leader are highly contagious, so work hard to manage your own anxiety. No one will affect the overall workplace mood and morale more than a senior leader. Be mindful that any negative comments or tone will carry impact. If you show up like a cat on a hot tin roof, your anxiety will spread like a wildfire. Manage your own anxiety by developing a "self-soothing strategy" you can rely on. Find someone you can vent to safely, such as a trusted outside adviser or coach who also can offer an objective perspective.
  • Pay attention to task and people; be alert to their emotions. Don't fall into the trap of thinking all is well or that your people will simply need to "deal with it." Develop a proactive plan to recognize, identify and deal with current challenges and emotions in the workplace. Set time aside in team meetings to allow people to vent and talk about their anxieties and challenges. Listen and acknowledge what you hear them saying.
  • Be the anchor in the storm; display calm confidence and optimism. Model what you want from your team. This is your golden opportunity to truly lead by example and live your values.
  • Keep your team focused. Identify the single most important priority goal that everyone needs to commit to in order to weather the storm. Make sure everyone understands it and is clear what their part will be -- their action item(s) in helping the team achieve it. Let them know there will be no tolerance for the "it's not my job" syndrome for this goal! Create a measurable scoreboard for the goal, review it at every team meeting and recognize/celebrate critical milestones.
  • Engage hearts and minds (particularly your top performers') to increase productivity. Facilitate a session to get all hands on deck. Bring the team or company together to brainstorm creative solutions for the game plan. Focus on core strengths and values, company vision and how to keep customer confidence high.
  • Stay the course. Reinforce the plan with follow-up, recognition, redefining expectations and adequate resource support for weathering the storm. Retaining your top talent during slow growth will be challenging -- they get restless. Work to keep them engaged, well supported and rewarded. On that note, everyone's extra effort should be noted and recognized.
You can read the entire article here.

Courtesy Maureen Moriarty and the Seattle Post-Intelligencer.

Tuesday, November 04, 2008

How to Silence Workplace Gossips

This month, I'll be conducting a nationwide audio conference on issues and solutions to Gossip in the Workplace on behalf of my friends at

I hope you can join us.

The nationwide audio conference is on Monday, November 17 at 10:30am Pacific. To sign up, click here.

There's also a California specific conference through the Employer Resource Institute on Friday, November 21 at 10:30am Pacific. To join us, click here.

I sincerely hope you can join us!

Sunday, November 02, 2008


On Tuesday, I'll have the privilege of voting in my eighth Presidential election. In half of them, I was equally privileged to have an employer who encouraged my vote (since 2000, I am my own employer).

In most states, employers are required to provide time off to employees in order to vote (for the specific state-by-state run down, click here).

I once had a boss who tried to force us to vote by absentee ballot; we revolted. There's something about going into a voting booth and choosing a President that is indescribably American. It's something I'm proud of.

Regardless of your political persuasion, I encourage you to encourage your employees to take time and vote. An hour or two is worth the privilege of a free country.

Thanks to Fisher & Phillips.

Tuesday, October 28, 2008

Leading Through Difficult Times

I had an exchange with a reporter last week. She asked me for advice on how employers can proactively help employees through these times.

Here's my response:
  1. Don’t panic. It is way too easy to make rash, and then regrettable decisions (for example, immediate layoffs).
  2. Get clarity. Get away from the office, re-visit your business plan, and then decide what makes the most sense for your company – not just now, but in a 2-3 year plan. For example, terminating your highest paid employee would lower immediate expenses, but how expensive will it be to replace that employee in the future, when the economy rebounds?
  3. Determine the amount of disclosure, and err on the side of too much information to employees. Employees are just as nervous as employers – and the uncertainty about their employer (and their careers) exacerbates their fears. Employees want and need to be informed and what the situation is in their company. Employees are normally just as invested in the success of their company as the business owner is.
  4. Conduct team meetings and be honest. Get feedback, solicit ideas for expense reduction, or ways to increase revenue, and make this process a collaborative effort. Business owners are normally surprised by the sophistication of such responses. And they are also surprised at what comforts employees are willing to surrender in order to keep the business viable.
  5. Acknowledge employees' fear. No one knows what's going to happen.
  6. Keep an eye open for employees who appear especially troubled, and make sure to engage them. This often can assist in preventing potential violence in the workplace (although almost all statistics show that workplace violence is instigated by a relative of an employee).
  7. Finally, show you’re in charge. Leadership (and resulting confidence by employees) comes from the top. Your employees respond to your emotions and words – and that is magnified to such an extent that employees sense even your subtle mood swings. Showing panic or a dark side is the worst thing an employer can do. Be as positive as possible.

Monday, October 27, 2008

Employee Morale and the Economic Crisis

From the incomparable Tom Peters:
Tough times are in fact golden opportunities to get the drop, and the longterm drop at that, on those who respond to bad news by panicky across-the-board slash and burn tactics and moves that de-motivate and alienate the workforce at exactly the wrong moment.

Tough times indeed require tough and unpleasant decisions—but thriving, not just surviving, is an option for those who mix wisdom and boldness of leadership with transparency and maximized employee involvement and engagement. Without suggesting that there is anything humorous about the pain that bad times cause, one can say that "this is when it gets fun" for truly talented and imaginative leaders at all levels and in businesses of every sort and size!

It's time to go back to basics. What were the decisions that got you to where you are today - both good and bad? The fundamentals of your success are still the same; it's the circumstances that are different.

Adjustments are necessary, but not necessarily radical ones. Don't forget where you came from and what got you there.

Sunday, October 26, 2008

The Elephant in the Room

It's a pleasure to recommend a timely book from my partner, Tony Rose.

The "Elephant in the Room" is that thing - or things - which keep you up at night, which you try so hard to avoid confronting. It could be the current economic situation; a poorly performing but well-liked employee; or something in your personal life.

Tony's book, "Say Hello to the Elephants" looks to embrace that elephant; to tackle the big issue in a positive and efficient way.

He has a 4-step process for dealing with the elephants:
  1. Discover and get clarity on the situation;
  2. Consider and select a solution;
  3. Implement the solution; and
  4. Manage and sustain the result.
I've worked with Tony for many years, and this book is a wonderful summation of his leadership philosophy. I'd highly recommend it (even if he weren't my partner)... - or buy the book here.

Friday, October 24, 2008

Asking Employees For Proof of Illness

Many employers are frustrated with employees who frequently call in sick. And that frustration can lead to major headaches.

Tresa Baldas of The National Law Journal, writing in, identifies several pending lawsuits filed by the EEOC where employers are apparently asking for too much information when employees use sick time. Of particular note is the 'intermittent leave' permitted under the Family and Medical Leave Act.

You've got to consult with your employment attorney or HR expert before making such a request.

In the meantime, I am an advocate of consolidating 'vacation' and 'sick' time into one broader category - paid time off (PTO). If such a program is in place, it doesn't matter why the employee is taking the time off. And once PTO is exhausted, the employee does not get paid for any additional time off - whether sick or vacation.

Thursday, October 23, 2008

California Computer Professional Overtime Requirement Clarified

On September 30, 2008, Governor Schwarzenegger signed into law a bill clarifying that salaried computer software professional employees who earn at least $75,000 a year are exempt from overtime compensation requirements.

Under the new law, hourly employees earning at least $36 an hour and salaried employees earning at least $75,000 a year are exempted from overtime compensation requirements, thus defining clear amounts for both hourly and salaried employees. This new requirement takes immediate effect.

There are important additional criteria for exempting these computer professionals; Baker & Hostetler have them here.

Wednesday, October 22, 2008

Whoops! They Forgot To Teach Us How To Manage People!

I have several law firms as clients - and if there's one thing I see they all have in common, it's friction between young, new lawyers and their support staff.

It's because law schools forget (or worse, don't care) about teaching law students how to manage people.

The fundamental problem is communication. All managers need to understand the motivations of their 'subordinates' - what makes them come to work and why. A mutual understanding, along with frequent and candid one-on-one communication, goes a long way.

It's not about 'do this' or 'do that'. It's about working cohesively together to attain mutual goals.

If there are law schools that include fundamentals of management courses, I'd like to hear about it.

In the meantime, my validation for this argument comes from of New York Law Journal, writing in

Tuesday, October 21, 2008

Independent Contractor Properly Classified

It's our perception that most of the time, employees are improperly classified as Independent Contractors - and the IRS is certainly cognizant of that fact.

But when an Independent Contractor is properly classified, it is a boon to the employer - especially when that person tries to sue their employer for improper termination, discrimination, etc. - because they are not actually an employee

In California's Varisco v. Gateway Science and Engineering, Inc., the 2nd Appellate Court ruled that an Independent Contractor was properly classified, and thus threw out Varisco's wrongful termination claim.

Control is the principal factor in determining whether an individual worker is an employee or an independent contractor. “An independent contractor is ‘one who renders service in the course of an independent employment or occupation, following his employer's desires only in the results of the work, and not the means whereby it is to be accomplished,’” wrote the court, quoting prior cases.

There are numerous secondary factors in determining an Independent Contractor status, very well outlined by Chris Olmstead of Barker Olmsted & Barnier.

Sunday, October 19, 2008

What To Include on a Pay Stub

In California (Labor Code 226), failure to provide any one of these items can subject you to fines calculated on each pay period up to a total of $4,000.00 per employee – plus attorneys' fees and costs.
  • Gross wages earned;
  • Total hours worked by the employee (unless properly exempt from overtime);
  • The number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis;
  • All deductions (all deductions made on written agreement of the employee may be aggregated and shown as one item);
  • Net wages earned;
  • The inclusive dates of the period for which the employee is paid;
  • The name of the employee and the last four digits of the social security number or employee identification number – not the entire social security number;
  • The name and address of the legal entity that is the employer; and
  • All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate.
According to our friends at Fisher & Phillips:

California Labor Code 226 is not a recent statute, but employees have begun regularly including claims under this statute in many actions filed against employers...This is true low-hanging fruit on the litigation tree.

Friday, October 17, 2008

Benefits of Being a Kind Manager

Successful managers practice the golden rule.

And when managers treat employees with respect and decency, superior team performance is the result.

The American Management Association came out with a survey that illustrates how a boss's character affects employee performance and retention rates.

  • 84% of employees who report to 'kind' managers plan to work for their company for a long time;
  • Whereas only 47% of employees who report to bullies agreed.

Managing employee turnover - especially in troubled economic times - can be as simply as applying the golden rule.

Thursday, October 16, 2008

When Women Work For Women

A new study by the University of Toronto says women who have to answer to a female supervisor feel more stressed than if their superior is male. They suffer from far more depression, insomnia, headaches and heartburn than if their boss is a man.

But for male workers, the sex of their manager makes no difference.

Scott Flander, writing in HR Executive Online, quotes experts as saying it may have to do with the fact that many women -- bosses and subordinates alike -- feel more vulnerable in their jobs than men do. And they say HR leaders need to work harder to change that.

My advice is generally gender neutral:
And become intimately involved in the relationships all of your managers have with their employees.

Wednesday, October 15, 2008

Amendments to the Americans With Disabilities Act

President Bush recently signed some significant amendments to the Americans With Disabilities Act (ADA).

As usual with such legislation, the burden on employers will ultimately be adjudicated in the courts, with little specificity as to direction an employer should take.

Here's an exerpt from a recent article by Jackson Lewis:

With the ADAAA going into effect on January 1, 2009, now is the time for employers to review existing procedures for ADA compliance at every stage, including hiring, medical testing, accommodation, leave and termination. Employers must prepare to inject flexibility into their policies and practices to meet the ADA’s demanding standard for reasonable accommodations. According to Mr. Alvarez, “Employers should train supervisors on individualized assessments and develop protocols or guidelines for responding to workplace limitations posed by injuries or illnesses. Forget about trying to discern whether someone meets the ADA definition of ‘disability’ – it’s a litigation issue at best, and, in most cases, a losing one.”

Among other things, Mr. Alvarez suggests employers review job descriptions since they are frequently a starting point for an individualized assessment. Employers also should consider implementing a formalized process for addressing reasonable accommodation requests or reviewing reasonable accommodation procedures already in place. Employers skilled in “individualized assessment” often rely on forms, internal guidelines, or template letters to help facilitate communication with individuals with disabilities and their healthcare providers. These practices will become both more common and indispensable as employers grapple with a more demanding and relevant ADA.

Tuesday, October 14, 2008

Nevada Company Pays $425,000 To Settle Sex Harassment/Retaliation

What's so troubling about this case is not the sexual harassment - which is offensive enough - but the retaliation. Attorneys are finding it much easier to prove retaliation charges than harassment charges. Almost anything done by an employer after harassment is alleged can be construed as harassment.

Also, you would expect to see cases like this in California rather than Nevada. With the economy in Nevada - especially Southern Nevada - sinking - all it takes is one mistake to end your business. Don't be like Scolari's.

Scolari’s Warehouse Markets will pay $425,000 and furnish other relief to settle a class sexual harassment and retaliation lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced on September 5.

The EEOC charged in its lawsuit that 19 female employees, several of whom were teenagers at the time, were subjected to repeated and sometimes severe sexual harassment by the company’s senior officers across multiple stores in the Reno area. The EEOC asserted that Scolari’s senior officers and managers inappropriately touched female employees, propositioned them, made lewd comments and passed around naked photos of themselves, among other acts. In addition, the EEOC charged that Scolari’s management failed to address and correct the unlawful conduct, even when the victims complained about it. Instead, the women were fired or were forced to abandon their jobs after they complained about the harassment.

All this alleged conduct violates Title VII of the Civil Rights Act of 1964. The EEOC filed suit in U.S. District Court for the Northern District of Nevada after first attempting to reach a voluntary settlement (EEOC v. Scolari’s Warehouse Markets, CV 04-229 DAE - RAM). A consent decree setting forth the terms of the agreement was approved by the court on Sept. 5.

Under the three-year consent decree resolving the case, Scolari’s agreed to pay $425,000 to the employees identified by the EEOC to have been sexually harassed or retaliated against. As part of the injunctive relief, Scolari’s further agreed to provide training to all employees; provide reports to the EEOC regarding its employment practices for a period of three years; and, to hire a consultant to review its harassment policies and procedures.

“In a case like this, where several of the victims were young women new to the work force, victims of harassment often feel further isolated and marginalized,” said EEOC Los Angeles Regional Attorney Anna Y. Park. “This case shows that employers need to investigate and act on complaints of harassment before the problem mushrooms.”

EEOC’s Los Angeles District Director Olophius Perry added, “Nevada employers need to be vigilant in protecting workers who have the courage to speak out against harassment. The EEOC is determined to protect the civil rights of all workers, and that includes protecting their right to protest illegal mistreatment.”

Sunday, October 12, 2008

Managing Your Boss

I've written frequently over the past few years about the need to Manage Up. In order to succeed and grow as a manager - as well as getting your employees to equally succeed, it's essential to know how to manage your boss.

Susan M. Heathfield, writing for the HR Daily Advisor, shares some tips (you can read the article here) - and I'm taking the liberty of adding my own comments to those tips.

1. Work to develop a positive relationship.
Any successful relationship - whether professional or personal - requires effort. I've worked for people I couldn't find any common ground with. The relationship deterioriated to the point that if he said the sky was blue, I'd disagree, just on principal. Then at a seminar one day, we were asked to name the most ethical person we'd ever worked with. To our mutual surprise, we named the same person. We discussed it and were able to build a positive relationship from there.

2. Work from the boss's viewpoint.
Just as you're in it for you, your boss is in it for him/herself as well. And since they're the boss, what they say ultimately goes. Find out what their goals are and help in attaining those goals.

3. Look for the best in your boss.
You're not going to change your boss (or your partner, for that matter), so stop trying. You need to adapt to their style and behavior, not the other way around.

4. Learn from the boss.
Whether you like or respect your boss, there are things you can learn from them. Some of the most valuable management skills I've learned are from bosses I didn't like or respect. In learning what I didn't like, I was able to avoid those characteristics in my subsequent leadership roles.

5. Ask for feedback.
Don't rely on the possibility that your boss will give you feedback - ask him or her for it frequently. Bosses should like playing the mentor role, and will be able to work better with you once they've communicated their feedback to you.

6. Value your boss's time.
Schedule meetings, don't interrupt.

7. Accept that sometimes you will disagree.
It's business. He or she is the boss. Understand that when you're in a position someday to make decisions, you may do it differently; but for now, get over it.

Wednesday, October 08, 2008

Picking The Best Health Plan

Whenever I meet with a new client, I prepare a list of questions about their business - both macro and micro. The answers are always diverse and informative - no business has the same issues.

Now matter how many business owners I've met with, however, there is one question they all agree on:

Are you satisfied with your health insurance plan?

The answer given by all, of course, is a resounding "no".

Every October should be the time for businesses to re-evaluate their current benefits program and consider different providers or different options. Health Savings Accounts, for example, have gained some popularity but are not widely known.

And I'm constantly amazed that more businesses don't utilize a Premium Only Plan.

A good start in the struggle to evaluate what's best for your business is this article by Tom Murphy of the Associated Press.

Tuesday, October 07, 2008

Employee Satisfaction Equals Profitability

In an era (to put it mildly) that is economically uncertain, there is a way to bolster both productivity and profitability:

Employee satisfaction.

Employees who are happy in their work are always more productive. Yet businesses seem to shy away from nurturing their satisfaction or - worse - business owners have no idea if their employees are happy or not.

An employee satisfaction assessment (or 360 degree survey) is an easy tool to determine how satisfied your employees are. And, worked with an expert, you can use that information to take steps to enhance that satisfaction.

The downside of low employee satisfaction is higher turnover, lower productivity and ultimately business failure.

The upside is significantly higher.

Businesses with great workplace environments, such as those mentioned in this Wall Street Journal article, will improve the components so essential to success.

Saturday, October 04, 2008

Measuring The Best Hiring Manager

The most critical test for any manager or supervisor is the quality of their hires. Studies show that a bad hire (or any employee turnover, for that matter) costs a company about 50% of that employees annual salary.

In fact, one of my partners now believes that employee turnover costs American businesses over $340 Billion dollars per year.

So hiring the right person is indeed a critical component of a managers success, how do you evaluate that success (or failure)?

Kris Dunn, writing in Fistful of Talent, outlines some essential values when determining how well a manager hires, including a reference to the recent Jack Welch article in Business Week.

Tracking the hiring success of your managers is essential. And if a manager has a poor record of hiring, then the opportunities for training and development are ripe:
  • Teaching the fundamentals of interviewing;
  • Having that manager observe other interviews;
  • Conducting performance appraisals of not just the newly hired employee, but also the hiring manager 90 days after the hire.
Speaking of Fistful of Talent, by the way: Jessica Lee, who is the Employment Manager for APCO Worldwide, has a blog that's must reading for small business owners and managers. And although she's obviously skilled at her job, a book (or two or three) is obviously in her future.

Tuesday, September 23, 2008

Stopping Gossip In The Workplace

What can an employer do about gossip?

Supervisors need to regularly communicate with their employees about what's going on in the workplace. Make sure everyone knows what's going on in the workplace - future plans, etc. Employees need to feel part of the process of the company - especially in small businesses - and if they don't, they'll make it up in the form of speculation and "gossip." The attention and communication will work wonders in stopping the gossip.

Incorporate into your Employee Handbook a policy that discourages employees from spreading of gossip and rumors. For example:
  • Do not participate in spreading gossip and rumors, and do not tolerate it from others. Rumor and gossip sabotages the team's ability to work together effectively. It is disrespectful, nonproductive, and a selfishly motivated act that impedes employees from performing their jobs. If you hear about an issue that pertains directly to you, verify the accuracy of the information by asking the supervisor or the coworker involved, rather than simply passing on the information.
Tell the rumormonger that you're aware of his/her behavior. Describe how his/her behavior results in others not trusting them because no one wants to be the subject of the "gossip." For some, this single statement will be a realization that will result in immediate change. You should also describe the impact the employee's behavior has on the workplace and that his/her continued participation in the spreading of rumors and gossip is a violation of the company policy.

Incorporate the impact the employee's behavior has had on the workplace in his/her performance evaluations.

Sunday, September 21, 2008

Your Job Application May Be Cause for Age Discrimination

Among the myriad of problems a business owner faces is compliance with the numerous federal and state laws pertaining to discrimination.

While experts and consultants see these issues as relatively simple and inexpensive to correct - the fact remains that business owners are either to overwhelmed to manage them; too ignorant to know; or - worse - to callous to even care.

Even the simplest thing can cause major problems. Take your Application For Employment form, for example.

I'm stunned at the number of applications which ask the applicant's age. This is illegal in the United States.

(You can ask if the applicant meets a minimum age requirement if the position requires a minimum age; and you can certainly ask if an applicant can provide proof of authorization to work in the United States - but proof should only be provided after a job offer is made. And in neither situation should you ask for proof of age during the application process).

Yet it continues to happen. Over and over again.

Age discrimination is illegal. And one of the easiest ways to fix this problem is to get an up-to-date employment application from a reputable attorney or consultant.

Courtesy and the Miami Herald.

Wednesday, September 17, 2008

401(k) Fees - The Employers Choice

A great deal has been said about forcing financial institutions to disclose their hidden fees and expenses for 401(k) Retirement Plans.

But businesses - small businesses especially - tend to select a 401(k) provider for their company based on the monthly fee (only $100 per month!) or because the owner's best friend is a money manager and can do 'it all' inexpensively.

It's not the cost of maintaining the program - it's the hidden costs - especially expense fees - that are rarely if ever disclosed.

Demand from your third party administrator or money manager what those expenses are - they are costing you and your employees a reduced return on their investment.

And that means you are costing your employees and yourself - your retirement.

Courtesy Wall Street Journal.

Monday, September 15, 2008

Onboarding a New Employee

Employee turnover is a major reason why businesses don't succeed. There is an enormous cost to replace a new employee - from recruiting costs to selection and the lost productivity.

A recent SHRM survey showed that 46% of new hires are gone within the first 18 months of employment.

With these statistics, it's surprising that more effort isn't put into onboarding - the process of completely indoctorinating a new employee into the company. That doesn't just mean what they will do - it means understanding and being integrated into the company's culture. And it's not just a one-day or one-week process - it's an on-going, long-term process.

Some very good onboarding tips from Mike Russell and Maureen Moriarity.

Sunday, September 14, 2008

On Handbooks And Amateurs

Time and time again, we write about the need to have a professional develop your employee handbook.

And once again, another instance of a poorly developed handbook costing a business.

In this instance, a court allowed an employee to pursue an FMLA claim, even though that employee was ineligible.

The reason? Not all of the FMLA provisions were included in the company's handbook, nor the correspondence the company sent the employee.

How easy (and less expensive) it would have been to simply have a professional or labor attorney update their handbook.

Ironically, when I read that article from Fisher & Phillips LLP, I subsequently read another article of theirs - directed at educators - identifying the top five mistakes made by independent schools.

Mistake #3? Using an outdated faculty or employee handbook!

Thanks to Fisher & Phillips.

Wednesday, September 10, 2008

Don't Borrow Another Company's Handbook!

Many small businesses will 'borrow' someone else's employee handbook in order to save some money.

The problem is that without expert advice, your company could be providing benefits and promises that are not necessary.

For example, FMLA leave is required for businesses that have 50 or more employees within a 75-mile radius. If you have fewer than 50 employees, you need not comply with the FMLA.

UNLESS - your company handbook says so. A 7th Circuit Court ruling illustrates the issue:

According to the federal appellate court, statements in the employee handbook and two letters received by the employee that promised him 12 weeks of FMLA leave may have been sufficient to create an enforceable contract under Indiana law.

Alternatively, the court held that the worker may be able to prove his claim for promissory estoppel because he relied to his detriment on the company’s promises. Peters v. Gilead Sciences, Inc., No. 06-4290, Seventh Circuit Court of Appeals (July 14, 2008).

Courtesy Ogletree Deakins.

Tuesday, September 09, 2008

Immigration Raids Continue In The Workplace

After hearing for months how ICE will be stepping up enforcement of undocumented workers, word comes from Mississippi that the largest ever raid has taken place in the workplace - 595 Howard Industries workers were arrested last month.

It remains unknown if company executives will be arrested.

The fines against employers are increasing, the enforcement has dramatically elevated, and now it's time to make sure you're compliant with all I-9 and related requirements.

If it can happen to a large company like Howard Industries, it can happen to you.

Thanks to Barker Olmsted & Barnier.

Sunday, September 07, 2008

E-Mails & Company Litigation

No matter how frequently we write about the perils of e-mail, litigation continues to happen in this area.

A 2005 survey conducted by the American Management Association and the E-Policy Institute showed that of employers surveyed
  • 25 percent had terminated employees for e-mail misuse,
  • 13 percent of those same employers have been involved in litigation triggered by an employee’s use of e-mail, and
  • 20 percent of the employers have had e-mail subpoenaed in litigation.
Teresa M. Thompson of Fredrikson & Byron, PA, an employment attorney, says that "every piece of litigation that comes across my desk includes an e-mail discovery issue."

It's not enough just to put policies in place that state e-mail is for business use only - now, training is needed to reinforce the seriousness of this issue.

There is no expectation of privacy in company e-mails - and don't think that the opposing attorney doesn't know that.

Thursday, September 04, 2008

Tolerance in the Workplace

The EEOC has issued new guidelines on religious discrimination in the workplace, after receiving the highest number of complaints ever in this area in fiscal year 2007 (it's doubled since 1992).

Accommodating religious diversity in the workplace means more than deciding if a Christmas tree or Menorah should be displayed in the reception area.

There are any number of federal and state laws that may govern this issue, including the Civil Rights Act of 1964.

While employers must assist with all reasonable requests, they are less obligated to leap major hurdles to accommodate a religious request than they would be for a employee with disabilities - but it still requires an acute knowledge of what's acceptable or not.

Make sure to work with your human resources consultant or employment attorney when any matter such as this arises. And read this excellent article from Jennifer Nycz-Conner in the Washington Business Journal.

Wednesday, September 03, 2008

Illegal Workers & The ICE Crackdown Statistics

It can't happen to you? Wanna bet?

The graphic above shows the staggering increase in arrests made in conjunction with the hiring of illegal workers by the Immigration & Customs Enforcement Department (ICE - a part of the Homeland Security Department).
  • In fiscal year 2007, ICE secured more than $30 million in criminal fines, restitutions, and civil judgments in worksite enforcement cases. They arrested 863 people in criminal cases and made more than 4,000 administrative arrests. That is a tenfold increase over just five years before.
  • The number of criminal and administrative arrests has steadily increased over the past few years. Those arrested criminally include a variety of persons–corporate officers, employers, managers, contractors and facilitators. In criminal cases, ICE often pursues charges of harboring illegal aliens, money laundering and/or knowingly hiring illegal aliens. Harboring illegal aliens is a felony with a potential 10-year prison sentence. Money laundering is a felony with a potential 20-year prison sentence.
  • ICE has found these criminal sanctions to be a far greater deterrent to illegal employment schemes than administrative fines.
  • These arrests also include illegal aliens charged with criminal violations. Aliens have been charged with possession or sale of fraudulent documents, identity theft, Social Security fraud or re-entry after deportation.
And it gets more important in the fiscal year 2008 (which ends this October):
  • As of August, ICE made more than 1,000 criminal arrests tied to worksite enforcement investigations.
  • Of the 1,022 individuals criminally arrested, 116 are owners, managers, supervisors or human resources employees facing charges including harboring or knowingly hiring illegal aliens. The remaining workers criminally arrested are facing charges including aggravated identity theft and Social Security fraud.
  • ICE has also made more than 3,900 administrative arrests for immigration violations during worksite enforcement operations.
If that wasn't sobering enough, the ICE website posts their most recent arrests and punishments -all types of businesses are being investigated - from donut shops, agriculture, manufacturing, retaurants and more.

They're not kidding any more. Make sure all your employees are legally authorized to work in the United States; review your I-9's for each employee - and when in doubt, follow the law.

When HR supervisors are getting arrested, you know it's serious.