Nine Steps To Reducing Your Wage & Hour Liability

Yesterday, we wrote about the incredible proliferation of wage & hour claims and lawsuits spreading over the country.

Today, some tips to reduce your chances of being at the wrong end of a filing:

1. Audit all positions classified as exempt from overtime;
2. Re-write your job descriptions, even if they were last done within the last few years;
   
3. Review your policies to determine whether steps can be taken to eliminate or substantially reduce the possibility that an employee can claim to have been working, including reviewing such things as “automatic deductions for lunch,” rounding, and similar practices.
4. Analyze policies and procedures to review deductions from wages and salaries to ensure that they comply with the minimum wage and overtime requirements of state and federal law. These are the first steps toward minimizing liability.
5. Train Managers. Making sure managers understand the rules is paramount. Managers can avoid costly mistakes and spot problems before they become too costly.
6. Think Exempt - Non-Exempt, Not Just Salary - Hourly. Too many employers pay employees a salary and then believe that relieves them from any obligation to pay overtime. Employees need to make sure those employees are properly classified as exempt (someone who is typically not paid overtime) or non-exempt (someone that is generally entitled to overtime).
7. Take Complaints on Wage Issues Seriously. You want to treat wage and hour complaints just as seriously as employment issues including harassment or discrimination. In fact, these wage and hour lawsuits could be more costly to your business.
8. Do Not Retaliate. Never, never, never retaliate against someone that makes a complaint for wage and hour issues.
9. Develop strong policies on pay practices and employee hours. Make sure employees work those hours assigned and do not work off-the-clock. Above all, properly document the number of hours worked because just like in baseball where a tie goes to the runner - if the employer has not documented the hours worked by the employee - the benefit of the doubt will go to the employee.

Courtesy Rush on Business (we wish he was in California!), Elarbee Thompson, Monster.com

Wage & Hour Issues: The Trial Lawyers Dream Come True

More wage claims were filed in federal court in 2006 than in 2003/04 combined. Through April 2008, those claims are on pace to outdo 2007. Entire law firms are being formed to litigate wage and hour claims.

That's because about 70% of all businesses are out of compliance with wage & hour laws.

One Rochester, NY attorney switched from defense to plaintiffs work, saying, "I can hit a company with a hundred sexual harassment lawsuits, and it will not inflict anywhere near the damage that [a wage and hour suit] will."

It’s estimated that corporate America pays out more than $1 Billion a year to settle and resolve wage and hour claims.

We're mostly talking about exempt or non-exempt employees, from not taking meal breaks to tip credits, and overtime. From Starbucks to Oprah Winfrey, no employer is immune.

Tomorrow, we'll talk about ways to prevent these lawsuits and claims from occurring.

Courtesy Rush on Business; Ethics & Legal Compliance Training; Business Week; New York Times (registration required)

Workplace Wellness Programs

Even in this down economy, workplace wellness programs are on the increase. The advantages are numerous - lower health care costs; increased attendance and improved morale.

Employee Assistance Programs (EAPs) are also an inexpensive way to obtain these advantages - and in some cases, spouses and dependents can participate as well.

Wellness programs also increase the attractiveness of an employer. Companies with wellness programs that touch on the physical and emotional needs of staff and their families show the employer's interest in keeping everyone healthy, and keeping them happy.

Courtesy East Indiana Star Press.

When You're Ready For Management

"It's good to be the King," said Mel Brooks in History of the World Part I.

Lots of employees envy the boss; the boss is the one who sets the agenda, enforces the rules, and gets to make the decisions the rest of us must implement.

From the outside looking up, management seems like a great job. Telling others what to do, instead of being told what to do, is really the essence of what many people aspire to.

Yet from the perspective of managers, there's no job more humbling. Making decisions - no matter how benign - that affect people's lives is difficult. The balance between managing and doing is a fine one.

For example, the best salesperson does not necessarily make the best manager. The attributes needed to succeed in sales - supreme self-confidence, self-motivation and determination along with a strong measure of independence - are not those which are desired in a great manager.

Management requires a huge team concept, the ability to admit you've made incorrect decisions and immediately change course.

A very good checklist on "Are You Ready For Management" is available here - written by Jackie Harder in the Miami Herald.

Keep Politics Out of the Workplace

We've written before about the need to keep political discussions out of the workplace. The best practice is to discourage it - emotions can simply get to volatile, and there's no real need to have that discussion in the workplace, anyway.

And don't let anyone throw the first amendment at you, either: political speech at work is generally not protected by the First Amendment.

Where the political issues get troubling is when employees bring political buttons, signs, bumper stickers, etc. into the workplace.

Make sure to review and/or update your employee handbook to make sure these activities are prohibited (usually through a non-solicitation policy).

And, make sure to read this excellent article on the topic from our friends at Jackson Lewis.

Insult Your Boss Day

Happy "Insult Your Boss Day". No, I'm not kidding. It must be official - it even has a website: http://www.insultyourbossday.com/.

It better be tongue-in-cheek. I find very few bosses who appreciate being insulted.

There's a difference, though, between insulting your bosses and legitimate criticism.

Think about a major difference you have with your employer. The best managers invite a contrary opinion; just be careful about how and where you express that opinion.

I never object to an employee who has a difference of opinion. But I would strongly prefer to be criticized in my own office than in front of a number of employees; my initial reaction to the latter situation would be hostile.

Don't insult; do express your opinion - but know where and when to do it the right way.

Courtesy Winston-Salem Journal.

Employers Do Not Need To Ensure Meal Periods

In a decision that California employers have been waiting for, a California Court of Appeals today ruled "...while employers cannot impede, discourage or dissuade employees from taking meal periods, they need only provide them and not ensure they are taken."

In Brinker v. Superior Court, the Court analyzed what California Labor Code § 512 means when it requires an employer to "provide" meal periods to its non-exempt employees. (California Labor Code § 512 requires that an employer "provide" an employee with a meal period if the employee works five (5) hours or more.)

For years, the California DLSE and courts have interpreted the term "provide" to mean employers must require employees to take their mandatory meal periods or be liable to the employee for one extra hour of pay.

It would be a mistake to immediately change any policies you have in place regarding meal breaks; the decision will almost certainly be appealed to higher courts.

The Annoyance of E-Mail

One of my closest friends has an e-mail account, but refuses to give out the address to his friends. "I get enough e-mails at work," he explains, "and the junk I get from my friends is the biggest time waster I can think of."

The overuse of e-mail, and related etiquette violations, are a big annoyance in the workplace.

ABC News has developed a list of "No-No's" when it comes to business e-mails (and they're all great examples of what not to do). They are:

1. Don't 'cc' someone's boss on a criticism unless you really mean it;
2. Hitting the 'reply all' button;
3. USING ALL CAPS

It is suggested that you develop an e-mail etiquette policy for your handbook - but, like all policies, you need to consistently enforce it.

And remember - when you put something in writing - it's there forever.

5 Alternatives to a Pay Raise

The economy is down, and business owners are feeling the pinch. Employees may deserve a pay raise, but you can't afford to provide one.

Here are five alternatives to a pay raise:

1. Increase the number of paid days off.
2. Go to a four day work week twice monthly.
3. Telecommute one day a week (this saves the employee travel time and gas expense).
4. Establish a bonus for high performance during the year; if an employee exceeds billable hours, or productivity standards - your business will improve.
5. Initiate a 401(k) or other savings incentive plan (the incremental costs are very small compared to the perceived benefit)

Remember, it costs far more to replace an employee than keeping one. Reducing your employee turnover is a key component to business success.

Courtesy USA Today.

Same-Sex Marriage & The Affect On Employers

When California's Supreme Court overturned a state law that banned same-sex marriages in May, the impact on employers was not immediately clear. As lawyers and experts have begun to evaluate this decision, their opinions are starting to come out.

Writing in Harrison Ford's Management Update, Jeffrey Ashendorf says that "Employers should review the terms of their benefit plans and employee communications and adopt a clear definition of the term "spouse" to avoid any confusion. Additionally, if benefits are or will be offered to same-sex spouses or non-dependent domestic partners, employers should ensure that their payroll or accounting departments can comply with differing tax treatments under federal law."

Obviously the issue is controversial - and litigious - for employers. Take steps now to ensure you're in compliance.

Retaliation: The New Emerging Issue for Employers

Employment attorneys tell me that the reason retaliation claims are on the rise is that retaliation is much easier to prove than harassment. Some plaintiffs lawyers are even 'giving up' on a harassment complaint and just focus on retaliation as a result.

When I conduct workplace investigations, one of the things I look for is whether retaliation has taken place. It may be that there was no actual harassment - but there was retaliation.

The simplest example is when an employee is terminated shortly after making a harassment or discrimination claim. The burden is on the employer to prove he or she did not terminate because the accusations were made.

And retaliation can be much more subtle - co-workers avoiding the accuser; management moving the accuser to another office or work location.

Make sure you add a non-retaliation policy to your employee handbook. But you need to be vigilant in making sure the policy is truly in practice.

This excellent article from Shaw/Valenza illustrates some recent retaliation decisions made by the courts.

Alternatives to Employee Layoffs

Yesterday, we discussed the downside to laying off employees. It often is a short-term fix at a substantial long-term cost to your business.

But when business turns south (62,000 jobs were lost last month), what alternatives are there?

Michigan-based Pro-Temp Inc. co-owner Cal Van Hemert started snipping away at expenses at the heating, cooling and refrigeration service company.

He replaced the company's formal holiday dinner with a pizza lunch, restructured to get more people into the profitable sales department and is debating whether to trim benefits for his 14 employees.

Cross-training employees in multiple roles can add efficiency with no additional cost.

Employees might agree to sabbaticals, unpaid vacations, lowered salaries, even work furloughs.

415 Productions offered either an overall 5 percent pay cut, or a four-day work week reflecting the appropriate decrease in pay.

Charles Schwab Corp. guaranteed a $7,500 bonus for any affected employee who gets rehired within 18 months. In addition, company founder Charles Schwab and his wife created a $10 million educational fund for these workers. The fund will cover as much as $20,000 worth of tuition over two years at accredited academic institutions.

Your most important investment is in human capital. The cost of turnover is significant.

Thanks to salary.com and themorningcall.com.

The Downside of Employee Layoffs

In a "down" economy, the first thing many businesses decide is to layoff employees.

It's not a great idea, since it is a short-term fix at a long-term cost.

William McKinley, in an article titled Organizational downsizing: constraining, cloning, learning,
wrote that "While downsizing has been viewed primarily as a cost reduction strategy..there is considerable evidence that downsizing does not reduce expenses as much as desired, and that sometimes expenses may actually increase."

Employees should not be viewed as an expense, but as a capital investment.

F. John Reh argues that businesses need to consider the reduced morale and the reduced performance and innovation it will bring, and to consider the reduced quality of the company's overall workforce that will result.

Tomorrow, we'll discuss alternatives to laying off employees.

Courtesy about.com (management).

Getting Coffee For The Boss

So an employee got fired for complaining about having to get her bosses coffee. And then sued for a hostile and discriminatory work environment.

She lost (here's the article in www.philly.com), but certainly created a problem for her former employer.

The best way to deal with this problem - like most problems - is to get in front of it before anything gets out of hand.

For example, the written job description should always include a section that says, "...and all other duties as required by management." And it wouldn't hurt in the job interview to mention that bringing coffee to the boss is considered part of the job.

As for me - I'm fully capable of getting my own coffee every day, and would rather have by associates working that making me a latte.

The fired employee plans to appeal - but one of her quotes was really significant: "...they had no idea that I needed that job as much as I did..."

Managing Your Boss

I've written frequently about the concept of 'managing up'.

Now, Joe Tokash, writing in Business West Online, offers four steps to Managing Your Boss:

1. Choose Good Timing
2. Understand How Your Boss Prefers Information
3. Align Understanding
4. Follow Up and Live Your Word

All excellent steps. Remember - as a boss, it's up to you to encourage and foster communication with your employees. As an employee - it's equally up to you in order to proactively deliver that same communication.

Absenteeism in the Workplace

Many employers - especially smaller ones - get frustrated with frequent absenteeism. It reduces productivity and even minor disruptions can create problems in the workplace.

Sandra Sunken, writing in the Ventura County Star, has several suggestions on improving poor absenteeism - several I don't agree with:

But let's start with the ones I do agree with:

- You can make a difference. As a leader, it's your responsibility to set an example and make sure you set expectations as well.

- Leading by example. I once worked for a boss who believed he should be the first one in the office at least twice a week, and the last to leave at least twice a week.

- Create a bank of personal time days. In the HR world, this is called "Paid Time Off" or "PTO". PTO combines vacation, sick and any personal days an employee is eligible for. When they call in sick, or request a vacation, it is charged to PTO - so it doesn't matter why they're off; they're just off. And when that bank of days is exhausted, they can still be absent - they're just not paid for that time off.

Here's where I disagree with Ms. Sunken:

- Let your employees know you care about them. While this is important for morale, it's not relevent to absenteeism. If you care about your employees AND they care about their job, they'll be there.

- Emphasize the link between attendance and productivity. It seems to me that employees who are frequently absent simply don't care about productivity (or their jobs, for that matter). Explaining the importance of productivity likely will not result in improved attendance.

- Job Enrichment. Why would you go to the trouble of cross-training and developing an employee who doesn't care enough to show up?

- Prize Pool [for punctuality and attendance]. Many companies do this, and I'm frankly opposed to it. Attendance is a minimum expectation of employment. I do not believe in rewarding anyone for something they're expected to do. (However, rewards for exceptional performance are something I highly encourage).

Setting the expectation is critical. This should be emphasized in the job interview, supported in a written job description, and addressed immediately when there is a pattern of absences or tardiness.

Ending Gossip in the Workplace

The bad news first: it's really difficult to put an end to gossiping. Most people have a natural tendency to talk about others (witness the explosion of sites like www.perezhilton.com and www.tmz.com).

Yet gossiping about fellow employers or leaders in a business can truly produce incredible morale issues. My experience shows that if employees are happy, they tend not to negatively gossip in the workplace.

On the other hand, I've seen businesses where gossip is crippling morale and reinforcing already negative attitudes.

So what do you do?

Sam Chapman of Empower Public Relations set forth a 'no-gossip' zone in his office, firing three employees and establishing a strict policy of no-gossiping.

Perhaps a more practical approach is to keep your eyes open for unhappy employees and enforce your open-door policy. Find out what is troubling him or her and make sure your policies, procedures, and decisions are frequently communicated to everyone.

That (naturally) has created some consternation among the experts, as outlined in this article in the Christian Science Monitor.