Independent Contractor or Employee? Better Be Sure, And Fast!

Many employers incorrectly classify an employee as an independent contractor.  Some employers do it intentionally (to avoid workers' compensation and payroll taxes); but most are unaware of what the difference in classification actually is.

If you use Independent Contractors (also known as 1099's), you better audit all of them at once.  The IRS is about to launch comprehensive audits of 6,000 businesses.  The focus is - you guessed it - properly classifying employees.

Please take a moment to review the criteria the IRS uses to determine whether a person should be classified as an employee or Independent Contractor.  It's about control.  I've had clients insist a person is classified as a 1099 simply because that person requested classification that way! (That's wrong as well, by the way).

Get a qualified consultant or employment attorney to audit your practices and procedures as soon as possible.

Courtesy Baker Hostetler

Small Business Planning for H1N1

The Small Business Administration recently published “Planning for 2009 H1N1 Influenza Season Preparedness Guide for Small Business.”

Here are seven H1N1 preparedness steps that the government recommends you review and apply as appropriate to your place of business:

1. Identify a Workplace Coordinator -This person would be the single point of contact for all issues relating to H1N1 and be responsible for reaching out to community health providers and implementing protocols for dealing with ill employees - in advance of any outbreak or impact on the business.
2. Examine Policies for Leave, Telework and Employee Compensation - Obviously this will vary by business, but the emphasis here is on refreshing yourself and your employees about what your company's health care plans cover in the event of sick leave as a result of H1N1. You should also re-evaluate leave policies to ensure a flexible non-punitive plan that allows for impacted individuals to stay at home. Employees may also need to stay at home to care for sick children or telework in the event of school closures - so be prepared for this by implementing appropriate teleworking infrastructures in advance.
3. Determine who will be Responsible for Assisting - Appoint an individual or individuals who will be on-hand to assist ill personnel at your workplace - essentially a "go-to" person, who may be the same as the person chosen as your workplace coordinator.
4. Identify Essential Employees, Essential Business Functions, and Other Critical Inputs - Make plans to maintain communication and ensure clear work direction with critical personnel and vendors (and even customers) in the event that the supply chain is broken or other unpredictable disruptions occur.
5. Share your Pandemic Plans with Employees and Clearly Communicate Expectations - Consider posting a bi-lingual version of your preparedness plan, leave information, health tips, and other H1N1 awareness resources across all your work locations and online if you operate an Intranet.
6. Prepare Business Continuity Plans - Absenteeism or other work place changes need to be addressed early on so you can maintain business operations. Get tips on common sense measures your business can take from Business.gov here.
7. Establish an Emergency Communication Plan - Hopefully your business already has some form of emergency communication plan. If not, document your key business contacts (with back-ups), the chain of communications (including suppliers and customers), and processes for tracking and communicating business and employee status.

Managing Social Media in the Workplace

The impact of social media in the workplace is growing.  Time is being wasted, employees are 'friending' each other and liability for these issues is a litigation attorney's dream come true.

RSJ/Swenson has prepared a special report on Managing Social Media in the Workplace, based on Eric Swenson's recent presentation at the CalCPA Employment Practices Conference.  You can download the report here.

And bosses & managers: Don't "friend" your employees!

Retaliation Claims on the Rise

It's always been easier for lawyers to prove retaliation in the workplace than harassment, discrimination, or even wrongful termination.

With so many people now out of work, it's natural that retaliation claims against employers is now on the rise - 23% this year over last.

The classic example of retaliation comes from an employee who did the right thing - a whistleblower notification, a complaint against a supervisor or fellow employee - and that was terminated, transferred or had other repercussions from their employer.

A good article on this trend is from the Wall Street Journal.

Credit Reports for Hiring? Still A Bad Idea!

Using a credit report is becoming more popular for businesses hiring employees.  We've always felt this was an unnecessary risk to employers because:

1. What is the business justification?  If a job requires an employee to handle large amounts of cash, or have access to the same, that's good justification.
2. If someone has a bad credit report - especially in these economic times - does that make them a poor candidate for a job?  Not necessarily.
3. There is a risk that women and minorities may be disproportionately affected, and that could cause big problems.

So unless you have a good reason to do it, don't!

Managing Swine Flu in the Workplace

RSJ/Swenson has prepared a special report on managing swine flu in the workplace.

Click here to receive your free copy.

Employee Morale: The leading predictor of future growth and profitability

...or so says Roxanne Emmerich, author of "Thank God It's Monday: How to Create a Workplace You and Your Customers Love."I have no reason to disagree with her.

In this economy, there are fewer employees doing more work.  And for those employees who are unhappy - and there are legions - there are no other jobs to get.

While the economy begins to recover but job creation a long long way away, it's time to find out what to do in order to improve morale in your workplace.

Give 'em training, self-improvement courses, or survey your employees to find out what they want.

When this economy recovers, the last thing you'll need is to have all your employees looking for another job.

10 Telltale Signs of Workers' Compensation Fraud

Workers' Compensation rates are once again spiraling.  Here are 10 possible signs of potential workers' compensation fraud:

1. Monday-morning accidents.
2. Unwitnessed accidents.
3. Injuries following discipline, demotion, or transfer.
4. Claims from employees with private disability insurance. 
5. Claims from employees with histories of on-the-job injuries.
6. Claims from employees with high-risk hobbies (such as skiing or snowmobiling).
7. Delays in reporting accidents.
8. Several versions of an accident.
9. Claims from employees with financial or domestic problems.
10. Claims for injuries not received on the job.
11. Discrepancies between reported injuries and medical evaluations.

USCIS Conducting H-1B Site Inspections

The United States Customs and Immigration Service (USCIS) is now conducting more than 20,000 random on-site inspections in 28 cities of businesses that employ H-1B nonimmigrant workers.


The purpose of the inspections is to verify that the H-1B employees are being paid prevailing wages and that they are employed in their positions of record.

Many of the visits - which are unannounced - are being conducted by contract USCIS employees, but at the very least affected employers must ensure that they have maintained proper documentary files for their H-1B employees, in addition to paying them prevailing wages and keeping them in the positions for which they originally petitioned the USCIS.

Why You Should Never Include A "Discipline Policy" In Your Employee Handbook

If your business is in an "at-will" state (and you are, unless you're in Montana), you should never ever include disciplinary steps in an employee handbook.

Latest case in point: Buttrick v. Intercity Alarms, LLC.  This company, located in Massachusetts, had a section in their employee handbook called "Disciplinary Policy"which indicated the severity of any disciplinary action taken by the company would “in accordance with the following: Verbal Counseling . . . Written Counseling . . . Suspension.”.

Guess what?  An employee was terminated after one verbal counseling, but not written counseling or suspension.  That is a business owner's right - unless it's in writing in the employee handbook!

So, the employee sued, and won $41,888 from Intercity Alarms.  (To say nothing of the legal fees incurred by Intercity).

Don't put a discipline policy in your handbook.  Train your management team in appropriate steps and anytime an employee needs to be disciplined, run it by your HR department or your HR Consultant.

A great write-up on the case is here from Ogletree Deakins.

Leading People In A Down Economy

Yes, the economy is slow to recover and things are tough all over.

But now the workforce cuts have largely been made and the question for business owners is – how do I do more with less?

The following are two major trends I’ve noted in working with small businesses (generally less than 200 employees) in the western United States:

EMPLOYEES HAVE TRANSFORMED THEIR MENTALITY…
A few years ago, the typical employee had an ‘entitlement’ mentality – they felt their employer was lucky to have him or her. Unhappy employees could (and did) pick up and leave for a better opportunity at the first sign of disappointment. The typical attitude was not that of a team player – but as an individual who is owed a promotion, salary increases and more attention. This was nowhere more apparent than the “Generation Y” workforce.

Now, things have changed completely on its axis. Everyone has worked with people and are friends with people who have lost their jobs with little hope for a similar compensation program in a future job. As a result, employees now feel privileged to have their job. Everyone knows that layoffs have been pervasive, and they could be the next to go. This will result – if managed properly – in employees who will complain less, work harder, and become more appreciative of the job they have.

BUT THEY ARE REALLY, REALLY UNHAPPY…

Employees are simply grateful to have a job right now, but that doesn’t mean they’re happy in their job. A survey from Adecco North America, released just this week, shows:

• Two-thirds (66 percent) of American workers are not currently satisfied with their compensation.
• 76 percent are not satisfied about future career growth opportunities at their company.
• Almost half (48 percent) of workers are not satisfied with the relationship they have with their boss and 59 percent saying they are not satisfied with the level of support they receive from their colleagues.

Workers are also critical of their organization’s brain trust, with 77 percent saying that they are not satisfied with the strategy and vision of their company and its leadership.

We’ve noticed the number of complaints from workers are way down. People are still being harassed and discriminated against, but they’re afraid to complain because of fear of job loss.

By the way, most large companies have laid off more employees than small companies; that’s because it’s easier to lay off workers at bigger businesses because employees at smaller companies typically perform multiple tasks.

That means when the economy starts kicking into gear, and there are more job opportunities, those employees are going to either leave or file major complaints.

WHAT TO DO?

Lead. The number one thing that business owners and managers can do is actually lead. You're a leader. You are on stage. You're not allowed to show frustration or weakness. Leaders lead - they say "here is the way I believe we need to go," and then go. This is the attitude you must take when managing change. Virtually any change breeds opportunity - the key is finding the opportunity and act on it.

Communicate. It is imperative that frequent and clear communication lead the way to your success. There is fear in the marketplace. Employees are wondering if you’re going to cut staff, perquisites, and their free coffee. Employees are heavily invested in the success of the business, and they have a right to know what you’re doing. Even saying, “I don’t know” is preferable to not communicating. And it’s more than a memo or company-wide e-mail; managers and supervisors must be empowered to candidly talk with their staffs as well.

Performance Management. If you're maximizing the people you have, you won't need so many people! You can get more done with fewer people by knowing what your people do best. Evaluate your talent. Carefully consider your need for every one of your employees. Most businesses are not maximizing each and every employee they have. There are techniques available to ensure talent maximization – so find and replicate your best performers.

In 2009, the business owner and leader who has the ability to honestly evaluate talent, performance and make the decisions necessary to sustain the business not just in the short term, but for the long term, is the leader who will be highly successful both this year and beyond.

Training New Managers

Most managers get that role because they're the hardest worker; the best salesperson; or the smartest person in the office.

But those traits don't translate into being an effective manager.  That's where screening, development, and - most importantly - training - comes into play.

A new article in HR Executive Online discusses how and why to get managers properly trained as well as establishing metrics for success.

And yes, I'm quoted in the article.

Thanks to Scott Westcott and HR Exec Online

Nevada Wage & Hour Lawsuits

We've been warning employers for several months that wage & hour compliance issues will result in numerous lawsuits this year - especially in Nevada.

It's starting to happen.

Wells Fargo & AutoZone have been sued (class-action status is currently pending) for mis-classifying employees.

With Wells Fargo, business banking specialists were allegedly mis-classified as exempt (from overtime, meal and rest breaks) when they were required to be 'on-call' on certain evenings.

In AutoZone's case, Assistant Managers were not compensated for working overtime (this is a case very reminiscent of the Long's Drugstore case in 2004).

The federal government is taking Wage & Hour violations seriously: Labor Secretary Hilda Solis recently announced plans to add 250 field investigators, increasing staff by 33%. The DOL believes 7 out of 10 businesses are not in compliance with Wage & Hour laws.

Garry Mathiason of Littler recently wrote:

No employment-law trend is more certain, universal or important than the total wage-and-hour compliance initiative and stopping the epidemic of wage-and-hour class-action (lawsuits)...

More ominous and prescient are these words from Mathiason (and, I believe, completely true):

With thousands of plaintiffs' attorneys examining every aspect of the payroll process, employers must expect maximum scrutiny..."Every employee who is terminated or demoted, or who experiences an unpleasant workplace event, is encouraged by Internet and television advertising to seek the advice of counsel. In almost every intake interview, the attorney's questioning turns to wage-and-hour issues in an attempt to find additional claims. Inspired by the prospect of turning a small individual claim into a multimillion-dollar class-action, the organization's wage-and-hour compliance goes under the microscope."

Thanks to Las Vegas Sun.

Businesses Taking Action Against E-mails, Linkedin, Facebook

In its 6th annual survey, the security firm Proofpoint reveals some new information regarding social media and e-mails by employees - and it's almost always resulting in bad news for the employees:

• 43 percent of US companies surveyed have investigated an email-based leak of confidential or proprietary information in the past 12 months. Nearly a third of them, 31 percent, terminated an employee for violating email policies in the same period (up from 26percent in 2008).
• US companies are also experiencing more exposure incidents involving sites like Facebook and LinkedIn as compared to 2008 (17 percent versus 12 percent). US companies are taking a much more forceful approach with offending employees -- eight percent reported terminating an employee for such a violation as compared to only four percent in 2008.
• Even short message services like SMS texts and Twitter pose a risk. 13 percent of US companies investigated an exposure event involving mobile or Web-based short message services in the past 12 months.

Read the entire survey here.

Krispy Kreme Fined for hiring illegal workers

If Krispy Kreme didn't have enough problems already - here comes news they've been fined by the EEOC for hiring illegal (undocumented) workers in their Cincinnati factory. The fine amounts to $40,000.

What is remarkable about this fine is how easily it could have been prevented. The paperwork is easy - you just download an I-9 form off the internet. If there is any doubt about the documentation a candidate provides, just login to e-verify that's provided by the Department of Homeland Security. That would have been much cheaper than $40,000 and the embarassment caused by the resulting publicity.

And in case you think it might not happen to you - ICE has announced audits of 652 other businesses in the coming months (and we're sure there are more to follow!). The Obama administration has changed the focus from illegal employees to the employers that employ them.

References, Linkedin, and Common Sense

Just after posting my opinion on job references comes more comments. In a recent Wall Street Journal article, a job applicant was frustrated because potential employers wanted a minimum of three job references, but her prior employers had a policy of not providing such references.

Elizabeth Garone provided good advice, suggesting that supervisors no longer with the same company might be willing to be references (and because they're no longer with the company, may be more willing to talk to a prospective employer).

Again, if I'm leaning towards hiring a candidate, I'm not going to spend time calling references - more often than not, the reference can't give me any good information and the candidate is only going to list references that show that person in the best possible light! It's not worth my time! I can do criminal investigations, skills testing and personality/instinct testing that will more properly predict success than a reference check.

Now, many attornies are warning employers about the hidden dangers of LinkedIn. Specifically, attorneys are advising employers to be wary of giving glowing remarks about employees on the site because the employers risk having the recommendations used against them in a discrimination or harassment suit.

Do References Matter?

You're about to make a job offer to a candidate. Should you call his or her references?

Some people say yes, others say no. I'm in the latter category.

First, unless the candidate is a complete moron, they're not going to give you names of people who provide a negative reference. And most previous employers are understandably nervous about providing any information on a former employee.

Some of our clients like to verify the candidates dates of employment or compensation. Fine - ask the candidate for a copy of their most recent W-2 form or paycheck stub. Other than that, calling references is a lot of time for a very little reward.

Following standard procedures, you can require a background check, drug testing or even skills testing to verify information and make sure the candidate is you he/she says they are.

Here's an article in the South Jersey Courier Post that talks about the reference controversy. However, I seriously disagree with parts of the article that suggest visiting a candidates social networking sites as a pre-hire investigation. As I wrote back in May, using google and social networking sites to evaluate potential candidates is a really bad idea.

What does calling references accomplish?

American Apparel and a Big Immigration Problem

American Apparel has been accused by ICE of employing 1,800 people in Los Angeles who are not authorized to work in the United States.

It begs the question - is your I-9 house in order?

One of the biggest mistakes we see when conducting HR Audits is when businesses screw up their I-9 process.

We've seen I-9's unsigned, misfiled, lost - and - in many cases - business owners who never used I-9's in the first place!

Get an audit completed today - you may be next...

Why Health Care Reform Is Necessary

It's a deliberately provocative title. And this is not an article about which reform is best for our country.

But...

The Department of Labor just came out with their statistics regarding benefits paid by employers.

The cost of medical benefits to private employers has doubled in the past 10 years.

In March 1999, employers paid an average of $1.03 per employee per hour for medical benefits (about 5.4% of total compensation)

In March 2009, employers paid an average of $2.00 per employee per hour for medical (about 7.3% of total comp).

And based on my work with small and medium-sized businesses, the quality of those benefits has declined dramatically in the past 10 years (along with huge increases in deductibles, co-pays, etc.).

Twice the cost with half the benefits. All underwritten by private businesses.

Something must be done.

Nevada Expands Parental Leave Requirements

Effective August 15, Nevada has expanded its parental leave entitlements for employees who wish to attend or participate in school activities of their children.

AB 243 allows parents, guardians and custodians of children in private or public schools up to 4 hours of unpaid leave per school year for each child.

The law requires employers who have 50 or more employees to grant that unpaid leave.

More detailed information from Rick Roskelley of Littler Mendelson.

Management & Leadership Trends 2nd Half 2009

Last week, I gave a presentation in Las Vegas on what I perceive to be the significant trends for managers and leaders during the last half of this year - check it out!

Management Leadership Trends 2nd Half 2009

View more OpenOffice presentations from Eric Swenson.

Can You Prevent Employees From Leaving?

We live in a free society, and all businesses (except Montana and limited other exceptions) must abide by the 'at-will' employment concept - employees can leave at any time for any reason.

Many employers ask us what they can do from preventing valued or critical employees from leaving (and taking their clients or proprietary information with them). The answer is - not much, unless you have a really good employment attorney.

Let's review the basic components (adapted from a terrific article by Joseph Shelton of Fisher & Phillips LLP)

Non-Compete Agreements

A non-compete provision prohibits a departing employee from competing with the former employer after termination. Most states highly restrict their use.

Non-solicitation

Non-solicitation provisions allow an employee to work for a competitive business, but prohibit the solicitation of specific customers. The employee is free to compete and is free to work in whatever territory he or she desires, so long as the employee does not solicit business from a specific group of customers.

Non-recruitment

A non-recruitment (or no-raid) clause is designed to protect your employees from being hired away by former employees. Non-recruitment covenants restrict departing employees from trying to take others with them.

Non-disclosure

A confidentiality (or non-disclosure) provision usually limits the employee's ability to disclose information learned about customers, suppliers, or the employer's operations. While non-disclosure agreements often include the term "trade secrets," most states have a trade-secrets statute that prohibits misappropriation of such information even without a contract.

Return of property

A return of property agreement typically states that the employee must return all company property and all documents related to the company upon termination of employment. While all employers expect their employees to return company property upon termination of employment, there is oftentimes a dispute as to what is company property and what is the employee's property.

For example, many employees may claim that their rolodex or list of business prospects is their "property," despite the fact that such information was assembled on company time and with company resources. A return of property agreement may help an employer avoid such disputes by defining via contract what the company considers to be its property rather than the employee's.

Bottom Line: These agreements are highly legal in nature and should only be implemented with the input and agreement from a qualified employment attorney.

California Labor Complaints - 2008

The California Department of Fair Employment & Housing released its statistics for 2008 last month, and there are some ominous signs that all employers should know:

1. Complaints to the DFEH increased by more than 15% in 2008 (3,000 more complaints);
2. Disability claims were most frequently filed, followed by retaliation, sexual harassment and age discrimination;
3. In fact, disability claims comprised more than 36% of all claims;
4. Prosecutions of employers increased by 28 percent.

California also has a disproportionate ratio of total employee complaints - one out of every 5 complaints in the country is from California.

Time to get your house in order!

And a good analysis of these statistics is found from Christopher Olmstead of Barker Olmsted & Barnier.

Even More Questions To Ask Your Boss

The most important component of management is the ability to communicate.

But communication goes both ways. A manager can't inherently know what an employee wants. Good managers ask - and good employees proactively manage up by asking what their boss wants.

In April 2008, we wrote about great questions to ask your boss, and it remains the most visited article in the history of this blog.

Here are some more questions, courtesy of Caroline Ceniza-Levine via CareerBuilder.com:

1. How will we gauge my success in three, six or 12 months?
2. How do you prefer to communicate and how often?
3. What does my career path look like at this company?
4. What areas do I need to develop to advance my career?
5. What's our top priority?
6. Let me see if I understand this correctly ... am I missing anything?
7. What are my strengths?
8. What can I do to help you?
9. I'm working on X, Y and Z -- do you think I can handle this task?

Workplace Investigations - Who's Telling The Truth?

One of the most difficult things we must determine in conducting a workplace investigation is, 'who's lying and who's telling the truth?'

In interviews, I always have an associate taking notes and acting as another observer.

In one investigation last year, I was interviewing an employee who accused another of sexual harassment. Significant harassment. After the interview, I told my associate that the accuser was in my opinion, completely empathetic and totally believable. My associate looked at me and said, "Are you crazy? She's lying through her teeth!"

As it turned out, my associate was right. (It's always good to have a female associate present when conducting an interview of a female - they can always tell!)

He said/she said scenarios are very difficult. The most an investigator can do is assess both sides and write up a report without a recommendation but with a slant on what we believe.

Louis DiLorenzo of Bond, Schoeneck & King, PLLC has written an article in Business Management Daily with which I completely agree - regardless of the obstacle of he said/she said, the investigation must go on.

English Only In The Workplace? Bad Idea

It's very tempting for employers to mandate their employees speak only English during working hours.

It's also - in most cases - very wrong.

The EEOC provides some examples where English-only would be justified by business necessity:

• For communications with customers, co-workers, or supervisors who only speak English.
  
  
  
• In emergencies or other situations in which workers must speak a common language to promote safety.
  
  
  
• For cooperative work assignments in which the English-only rule is needed to promote efficiency.
  
  
  
• To enable a supervisor who only speaks English to monitor the performance of an employee whose job duties require communication with co-workers or customers.

If you wish to mandate an English-only workplace, we strongly suggest you review the policy with an employment attorney prior to implementation.

It's not worth it!

Wage & Hour Enforcement On The Rise

We've written previously on the increase in wage & hour claims by employees. Now, the federal Department of Labor is joining the fray.

The DOL has proposed hiring 200 new investigators in their wage & hour division for the 2010 budget. This will bring investigation staffing up to the levels last seen in 2001.

Audit. Prepare. Be proactive. It's better than having to react to an investigation or claim.

More information from Ford & Harrison.

Concentration, Poker, Effectiveness and Liz Lieu

Last Friday night, I spent an hour watching (sweating, in poker parlance) a professional poker player in a tournament at the World Series of Poker. It ended up being a lesson in how concentration works in different ways.

Liz Lieu has been a professional poker player for several years; she's won tournaments and had top finishes at other prestigious events. (As a side note, I love watching poker - it's one of the ultimate ways to study people).

You would expect a professional to have incredibly focused concentration; to talk little and always watch other players at the table and how the hands unfold. Not Liz. She had her I-Pod on (several people tell me that an I-Pod improves concentration; that's never been my experience). At every chance (mostly when she was out of a hand), she was on her PDA - twittering and texting. People, mostly other pros, came over to chat and she was gracious and funny with them.

And, by the way, she was winning!

What I also noticed was when she was involved with a hand (or before she even saw her down cards) - she was intense. Behind those sunglasses (the photo, courtesy of Poker News, was taken the day I was sweating her), she wasn't missing a thing. She saw the reactions of her competitors as they looked at their cards - what they were betting, etc. Her face gave away nothing, but she was seeing and processing everything.

What does this have to do with management?

Just as some people work better with a messy desk than a clean one, people have differences in they way they concentrate best. It's a temptation for a manager to insist on a clean desk, or tell an employee to take out their I-pod earpiece. But it's the wrong temptation as long as an employee is performing well.

It's the role of a manager to foster an atmosphere where employees can flourish and perform at their best level.

Although there's no way I could play in a poker tournament while doing all the things Liz does, what she does works best for her. Remember that when the temptation strikes with your employees.

Employers & Body Art

We've previously discussed the growing number of employees (mostly under the age of 30) who have body art. What can you as an employer do about it?

Recently, a Texas hospital wanted to develop dress code and grooming policy for all employees. The proposed policy required all tattoos to be covered, and piercings to be limited to earlobes and a nose stud only.

The proposed changes sparked vigorous debates among employees and even press coverage. It's a sensitive subject!

Even employers that permit piercings or tattoos should set limits. A detailed dress code and grooming policy should clearly spell out what is permitted.

If you permit tattoos, for example, you should prohibit the display of sexually graphic, violent, or otherwise offensive tattoos, or require employees limit the number of visible tattoos.

Traditional dress code and appearance standards are being challenged today more than ever. Employers still retain wide latitude, but the increase in body art is mandating more careful consideration of requests.

Seek employee input before making major changes to employee appearance standards.

Employers and Social Media

Most employers can't get enough 'inside' information on their employees. The temptation to spy on employee's social media sites (Twitter, Myspace, Facebook) is great.

Don't do it!

There's a case coming before a New Jersey court later this month. Employees at a local restaurant created a password-protected myspace chat room, where they could (on their own time) comment and vent on the issues of the day.

The owner apparently got an employee to spill the password, and found out the 'inside information'.

Whether this case has legal merit is another argument for another day.

But ethically and realistically, don't spy. If worktime is wasted on social media, have your IT person prevent employees from using them. But spying can only get you into trouble.

Avoiding EFCA and Leading Better

The EFCA is designed to make it easier for employees to organize into a union. Although the bill has lost some momentum recently, the possibility of your business turning into a union shop is stronger now than at any time since the NRLB was enacted in 1935.

If you don't want your workforce subject to the demands of a union, what do you do?

In 2008, Kenexa Research Institute published a report of a study made of 10,000 U.S. workers. Each participant was asked to agree or disagree with a list of statements about their employers. A significant percentage of those favoring unions responded negatively. Although there were also negative responses from the employees who were not in favor of unions, the number of negative responses was substantially lower. The following are statements for which the “pro-union” employees had a significantly more negative view as compared with employees who did not favor unions:

1. My organization shows a commitment to ethical business decisions and conduct.
2. I have confidence in my company's senior leaders.
3. When my company's senior management says something, you can believe it is true.
4. Where I work, ethical issues and concerns can be discussed without negative consequences.
5. My manager treats me fairly.
6. Senior management is committed to providing high quality products and services to external customers.
7. My company enables people from diverse backgrounds to excel.
8. My manager treats me with respect and dignity.
9. Management shows concern for the well-being and morale of team members.
10. Senior management demonstrates that employees are important to the success of the company.
11. I feel free to try new things on my job, even though my efforts may not succeed.
12. My company supports employees' efforts to balance work and family/personal responsibilities.

How do you know if your employees agree or disagree with those statements? Many employers believe wrongly that their employees are satisfied, but with little evidence to back that up. Remember, employees will tell you what they think you want to hear.

Get an employee assessment/360 degree survey done right away. At a minimum, it will provide a road map to show you how to improve your business.

And at most, it may help you avoid unionization of your workers.

When At-Will Works

At-will employment - the concept that employer or employee may terminate their relationship at any time, for any reason - is subject to so many exceptions that people frequently despair. Depending on the state, at-will can be exempted for such things as violations of public policy, discrimination, or a 'contracted' employee.

Montana is the only state that does not follow the at-will doctrine for general employment. However, an employee in Montana who is still within the company-determined probationary period (or, if the company does not have a probationary period, the first six months of employment) can still be termed under what is essentially an at-will relationship.

HOWEVER - there's good news. Done properly, at-will can benefit the employer. The most important thing is to mention at-will every time (or at least most times) an employee or job candidate signs a document.

Case in point - Radio Shack. A former employee alleged that Radio Shack terminated her for medical reasons. But the employee:

• First, expressly agreed with the terms of her “Preliminary Online Application” that, if employed by the Company, she would be employed at-will. The document also provided that if she was hired, her at-will employment could only be modified by a separate written document signed by the employee and an executive officer of the Company.
• Second, in her formal “Application for At-Will Employment,” the plaintiff again agreed to these same terms.
• Third, in acknowledging receipt of her “Team Answer Book,” the plaintiff signed a form confirming her at-will employment status with the Company.
• Moreover, there was also evidence of a personnel record noting the plaintiff had taken a leave of absence, which stated that “The below named person is an AT-WILL employee and no information on this form shall change the employment status.”

That's a lot of documentation to support the at-will concept. And a good reminder with what to do is here, from McGuire Woods LLP.

Ways To Improve Morale

In the down economy, with layoffs all over the place, its critical for management to take steps to maintain and improve morale of their existing employees. After all, you need your existing employees to do more now that there are fewer people to do the work.

How do you increase morale when budgets are so tight?

The key is constant, frequent, and candid communication with employees. They deserve to know what's going on and what you're doing about this frightening economy.

An excellent summation (including, thankfully, the call for transparency and communication) is found in this Wall Street Journal post about a case study at a company in Boston - Greenough Communications.

Age Discrimination And Pay Reductions

Age discrimination lawsuits are increasing rapidly. The trend of terminated employees contemplating and filing lawsuits are also on the increase.

If you want to terminate an employee for poor performance, then do so. But don't use a layoff as an excuse. And if you replace a terminated employee with a younger one, make sure that you're doing so for proper business reasons only.

Case in point: George Carras, who was in his early 60s, worked as the chief financial officer for a shoe importing business. When management said it was terminating him because of financial pressures, he offered to take a steep cut in pay, down to $60,000. The company rejected his offer and laid him off.

Then Carras found out that his younger replacement was making more than $60,000. When he sued for age discrimination, he told the court it was obvious that economics really hadn’t been the true reason for his termination. The trial court dismissed his case, but Carras appealed.

Now the 2nd Circuit Court of Appeals has reinstated the lawsuit and Carras will get a chance to persuade a jury that his former employer fired him because of his age and not because the company was having financial troubles. (Carras v. MGS 728 Lex, No. 07-4480, 2nd Cir., 2008)

Thanks to Labor Center Blog and Business Management Daily.

Nevada Minimum Wage(s) Increase on July 1

Nevada has a fairly unique minimum wage rule. Actually, it's not one rule - it's two.

Starting July 1 - employers who offer their employees qualified health benefits will pay a minimum wage of $6.55 per hour.

Employers who don't offer qualified health benefits will pay a minimum of $7.55 per hour.

The details here from Fisher & Phillips.

Wage & Hour Issues Dominating Employment Laws

One of the management trends we previously identified for 2009 is the additional assault of wage & hour claims by employees.

It is clear that - in a down economy - terminated employees employment elsewhere (at least not quickly). With time on their hands, those former employees are talking to their friends and attorneys about the 'abuse' they had working for their former employer - you.

In the meantime, attorneys LOVE wage & hour claims. They are relatively easy to prove, are frequently not understood by employers, and the opportunity for a class action is available.

So - what do you do?

First, audit your operations.

Second, read this article by John Skousen of Fisher & Phillips - some excellent practical advice for all employers.

Why Do I Root For Troubled People?

People who have amazing and unique talents fascinate me. Yet so many of those people have problems and issues that their talent can go to waste.

Do we forgive or do we forget?

Two such people are in the news these days - Manny Ramirez and Artie Lange.

Their similarities might surprise you - both have insane talent; both have battled substances; and even Lange (while you might not notice it today) was an All-League Shortstop at Union High School in New Jersey. Both are making incredible amounts of money - Ramirez, about $20 million per year for the Dodgers, and Lange - at least a couple of million a year doing standup comedy and serving as Howard Stern's invariable foil and sidekick on Sirius XM Radio.

Ramirez' troubles have been extensively noted. Lange has battled cocaine (and won) and heroin (an ongoing fight). Ramirez, after infuriating the Boston Red Sox and their fans with boorish antics - was literally given to the Dodgers despite his amazing offensive prowess.

Lange, who is trying desperately to get off of heroin, has missed several days of work on the Stern show; had to cancel a major gig at the Comedy Central Bob Saget Roast (ironically, it was Saget who gave Lange his comeback opportunity when casting him in Dirty Work).

The classic manager in me says they're not worth the trouble. They should be fired or given ultimatums - clean up or your out the next time.

But the human in me recognizes how few people possess the talent that Ramirez and Lange have - Ramirez at 36 already has Hall of Fame numbers, and Lange's legion of fans are notoriously loyal to a man who's appetites have spawned websites such as savebabygorilla.com and artielangedeathwatch.com.

Both are tinkering with losing what's most important to them - their core consitutency, their fans. How long can they expect to keep loyal fans with their screw-ups.

What's worse, and perhaps what makes them more empathetic, is that I don't think either can help themselves. It's easy to write a blog and tell Manny no more banned substances, or tell Artie to shut up, quit drugs and booze cold turkey, and show up to work.

There are demons there, and until they are completely conquered, the demons may end up destroying a talent the precious few of us have.

If you're a manager - do they stay or do they go?

What Generation Y Wants From Their Boss

Volumes of research has been conducted on how to manage Generation Y. I find most of the information way too general and not specific enough - after all, Generation Y, like Gen X and boomers, are still individuals and cannot all be gathered into one generic group.

A couple of people stand out in understanding Gen Y: Jessica Lee and Jennifer Kushell.

Recently, while conducting management training for a bunch of Gen Y'ers, I asked them to think of the best boss they ever worked for. Then I asked them what that person was their best boss. Here are their responses:

• Gave me frequent and good feedback
• Explanations before delegating to me
• Pushed me to better myself
• Helped in my career development/was a mentor
• Provided clear direction and purpose
• Showed concern for a work/life balance
• Treated me as a partner and collaborator, not just an employee
• Trusted me/empowered me
  
• Focused on my strengths
• Was a good teacher

If you manage Generation Y employees - is this the type of boss you are?

What Generation Y Managers Want

I'm in the middle of conducting a Leadership Development Program for a company that is young. And their managers - 11 of them - are really young: the oldest is 29 and the youngest is 23. What's more - none of them have had management training before, so it's been an interesting experience for all of us.

Prior to conducting the program, I asked them what they most wanted from their training. Here are their answers:

1. How to give both positive and negative feedback.
2. How to utilize people's strengths and optimize their weaknesses.
3. How to get subordinates to Manage Up.
4. How to keep my team motivated
5. How to make the most efficient use of my time.
6. How to delegate (this is related to #5).
7. How to manage expectations.

A pretty good list - and, I think, not just limited to Gen Y Managers.

Thoughts?

How Leaders Find Focus

Patricia Sellers, the editor-at-large of Fortune magazine, has three excellent tips for staying focused as a leader (my comments are italicized):

1. Know what you’re not good at. I find that most people know what their strengths are, but most people - especially Gen Yers - don't know what their weaknesses are. Honestly determine what you're not good at, and hire or delegate to those weaknesses. This will help you focus on your strength areas.
   
2. Know what not to do. Just as important as what you decide to do is what you decide not to do.
   
3. Find a focus and stick with it. A major failure of leaders and managers is that they are trying to focus on too much. Successful people are focused like lasers on one thing.
   

Leading During Difficult Times, Part 3

In previous posts, we've discussed leading during difficult times. It's about making hard decisions and communicating them effectively.

Some new studies are now showing issues that leaders and HR departments should immediately address.

Employees across the country reportedly spend an average of nearly three hours a day worrying about their job security, according to a telephone survey of approximately 1,000 U.S. workers commissioned by the firm Lynn Taylor Consulting.

Bosses might be exacerbating employees’ fear by one simple action—staying behind closed doors; 76 percent of employees responding to this survey said that when faced with this scenario unexpectedly, it triggers thoughts of being laid off.

Now, it's about effectively managing those who stay after reductions in force. The concept that 'we must do more with less' needs to have a process in place to make sure it happens.

Workforce Training Myths

A terrific list of workforce training myths from Vince Grassi, the director of global learning and knowledge management at Air Products, as quoted by John Teresko in Industry Week:

Myths of workforce training:

1. If you build it, they will come.
2. When times are tough, training is the first thing you should cut.
3. Just build Web-based (e-learning) courses. It's cheaper.
4. All training must be done in an instructor-based classroom setting in order to be valuable and important knowledge.
5. Once learners go through training, the manager never needs to find out how they are applying what they learned.
6. It is always better to look for your own local vendor. National, regional or global contractors involve too much internal bureaucracy, and they don't understand your special problems.
7. Sending people on a training course will solve all performance problems and development needs.
8. It will be obvious to a skilled trainer what each class participant needs so there is no need to discuss it in advance.
9. I've done presentations. Professional trainers make out that it is far more difficult than it really is.
10. We don't need a university -- we have a learning management system.

The most important part of workforce training - whether you conduct it in-house or use a consultant - is to understand that training is not an event, it's a process. A training course by itself cannot provide the sustainability needed to allow the trained concepts to fully integrate throughout your organization. Follow up is always needed.

To Severance Or Not?

When laying off, or even terminating employees, the inevitable thought and process of offering a severance package comes up. Most businesses - especially small businesses, don't have an existing written policy on severance packages. Therefore, a severance offer is not completely thought through.

I've had two clients in the last few weeks who needed to layoff employees and they had no existing policy. Suddenly, an issue which requires a great deal of thought had to be made immediately. There was even an article in the Wall Street Journal which addressed this.

Some thoughts on offering severance:

1. Get a policy in writing now. This helps greatly with consistency and avoids any claim of favoritism or discrimination. Even if you don't contemplate layoffs, it's still an important item to have in place.
2. When you offer a severance package for laid off employees, be consistent. An example would be two weeks of pay for each completed year of service. You can't show better programs for more favorite employees.
3. Every employment attorney I've worked with says the same thing - never offer money without getting a 'hold harmless' agreement signed by that employee. Consult your labor attorney - it's worth the cost.
4. Consider paying medical insurance for several months. COBRA now requires employers to pay 65% of existing benefits; but offering to pay all of the premiums for longer is a small cost but shows you - the employer - are trying to do the right thing.
5. If you're terminating an 'older worker' (someone over the age of 40), make sure the agreement contains provision required by the Older Workers Benefit Protection Act.

Can A Manager Be Too Nice?

Of course he/she can. And just like raising a child, a parent or manager needs to set clear parameters and goals.

So what happens when a manager is too nice? Alison Green writes in U.S. News that there are four immediate issues from an employee perspective (the italicized comments are mine):

• The boss won't make hard decisions or have hard conversations. That's true. But managers are there to make the hard decisions. That's why their paid more.
• You'll have a slacker working at the next desk over. There are always employees who attempt to do as little as possible. A nice manager avoids confrontation with that employee - which often results in everyone lowering their performance standards.
• You'll receive fuzzy, unclear messages. Managers need to be directive and establish expectations early in the employment cycle. Most importantly, managers must follow up to ensure their expectations are met.
• You won't get useful feedback. Good bosses tell employees how they can grow and develop, which necessarily entails pointing out things they could be doing differently, something too-nice managers often find awkward. Another trait all good managers must have is the ability to help their employees develop. Candid feedback is the only way to accomplish this.

Alison Green also writes a wonderful, succinct advice column for managers. I love her thoughts. You can see them here: http://askamanager.blogspot.com/

Blogging and Networking on Company Time

Facebook signed up its 100 millionth member in August 2008. Just 7 months later, they're about to hit the 200 million member mark.

The time Facebook members spend on the site must be staggering. And much of that time is likely spent during working hours.

Do you know what your employees are doing when they're at work? And if its not myspace or facebook or linkedin, what about their own blog?

These issues illustrate the importance of having a handbook policy regarding blogging—either as a separate policy or as part of your electronic communications policy. The policy provide the following:

• Do not blog on company time.
• Do not disclose confidential information.
• Do not include defamatory or racially or sexually offensive material.
• Do not disparage the employer or its products, or a competitor.
• Do not use the company logo.
• Be truthful and respectful.

Given the increasing use of blogs and social networking sites, its time to update your handbook now.

EFCA: What Employers Can Do

The Employee Free Choice Act has been introduced in Congress, with plenty of vocal proponents and opponents.

The bill has two main elements:

1. It would give workers the option of forming unions by getting a majority of workers to sign cards to join without having to hold a secret ballot election. (Current law leaves it up to employers to decide whether workers must hold an election or can organize via "card check.")
   
2. If employers and workers cannot reach a contract within 120 days, a government arbitrator intervenes and sets terms.

The possibility of many non-union businesses becoming unionized is real. So what can employer do? The best advice I've seen yet comes from Mark Mathison and Abigail Crouse of Gray Plant Moody in this article here. I've summarized their excellent suggestions:

1. Adopt an Internal Position Statement on Unions and Labor Relations
2. Conduct An Employee Issue and Satisfaction Audit
3. Ensure that Communication Lines are Open and that Managers are Responsive to Employee Issues
4. Review Employment Policies and Practices

Further, say Mathison & Crouse, it is important to audit for actual employment practice and policy enforcement within the organization because disparate enforcement adversely affecting unions or employees’ labor law rights can also be unfair labor practices with substantial negative impact in critical situations.

When You Lay Off The Wrong People

So your business needs to cut expenses, and downsizing your workforce is a necessary component in reduction.

But who do you lay off?

It's a complicated task, and you need both an organizational development expert and likely an experienced employment attorney to guide you, because it's not as simple as it seems.

For example, an older and more expensive employee may be your first choice for termination - but there are unforeseen problems. You can't just lay off an employee for those reasons (which is why you need that OD consultant and attorney). Or, if you do, you could spend a lot more in legal fees and lawsuits than you could possibly save with the cutback.

The EEOC reports that age discrimination filings leaped 29% in the year ending September 2008. Over 25% of all EEOC claims are now age-related.