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.

Five Most Read Articles

The five most read articles on our blog since October 1, 2008:

1. Leading In Difficult Times
2. Violence in the Workplace
3. Nine Great Questions To Ask Your Boss
4. Stopping Gossip in the Workplace
5. Pay Raises in a Bad Economy
   

You've Laid Off Staff. Now What?

Perhaps the easiest part of reducing expenses is cutting back on staff. Because the next step - "What Do We Do Now?" is extremely difficult.

What Do We Do Now? You have fewer employees but need to have the same or better performance.

Hopefully, when reducing staff, you took the first important step which is to identify those employees who are capable of doing more and retaining them.

In identifying employees who can do more - look at attitude (desire) and aptitude (ability). Communication (as always) is key - those employees are going to be doing different things and more of them.

The employees who stay need to understand why they're there and what their role is.

Employees who stay after a layoff are even more valuable now. There is some guilt (why did I stay and my friends have to depart?), a lot of trepidation, and no small amount of concern and fear.

It's up to the employer to alleviate those concerns and allow the business to move forward.

Communicating in a Recession

The most important thing an employer can do in this economic downtown/recession/potential depression is communicate with employees. It's one of the cornerstones of my trends for business leaders in 2009.

Because your employees have a vested (albeit self) interest in your success, they deserve to know what's happening and what you're doing about it.

In fact, one of the best things you can do is survey your employees and find out what they'd do to cut costs and improve performance in the short- and long-term.

Note - I said communicate 'with' employees, and not just 'to' employees.

This article in cnnmoney.com offers more advice.

You Know You're A Bad Boss When...

Comedian Jeff Foxworthy created a cottage industry when he started saying, "You know you're a redneck when..."

This post talks about a similar awareness: "You Know You're A Bad Boss When..."

And awareness is the key component. Employees will always tell you what they think you want to hear. If you aren't completely aware of what's going on in your workplace, then you're failing as a manager.

The other key component in awareness is to be completely honest with yourself when assessing your strengths and weaknesses. It takes a courageous manager to ask employees what is good and bad about his or her management style. (A 180-degree survey is also helpful, and most managers are rightfully scared to death of them).

Steve Wyrostek, the Chicago Small Business Strategies Examiner (www.examiner.com), wrote a recent article that inspired my post. Among his excellent thoughts:

You just might be a poor boss if ….

• You claim an open door policy and wonder why no one comes through that door.
• Your employee has to ask you why her check increased instead of you telling her prior to payday that you gave her a raise.
• You feel sorry for the Dabney Coleman character in the movie “9 to 5”
• The turnover percentage in your area is the same as the winning percentage of the White Sox.
• Your leadership role models are Machiavelli, General Patton and Atilla the Hun.
• You find a copy of A Survival Guide for Working With Bad Bosses: Dealing With Bullies, Idiots, Back-stabbers, And Other Managers from Hell by Gini Graham Scotton an employee’s desk.
• You have a budget of 30k to spend on employee bonuses and never use it.
• You think it’s good management to come in under the paltry 3.5% budget available for salary increases.
• You think that losing your temper is an indication of management strength.

Remember, being honest with yourself is the first, most important step in improving both your skills and performance - and those who work for you.

The Dangers of E-mails in the Workplace

There is no such thing as an innocent e-mail in the workplace. While people believe it's electronic and potentially harmless, e-mails live in storage forever, and often are resurrected by lawyers when it comes to employee litigation.

In a recent newsletter, Fisher & Phillips attorney Tillman Coffey top lines the reasons why e-mails are so dangerous. We've also written about it here and here.

There are several reasons why both managers and employees should re-thinking sending an e-mail hitting the "Send" button:

1. E-mails about employees are discoverable. Comments on an employees performance (including comments whether they are too old, or sick, or ineffective) are actionable. Lawyers love to see these e-mails.
2. Among the most common problems in e-mail: Messages that create a sexist, racist or hostile work environment, note experts. One e-mail message that made the rounds at Chevron in 1999 was titled "25 reasons why beer is better than women," Flynn said. Four female executives used it as evidence of a hostile work environment and were awarded $2.2 million.
3. The tone of an e-mail is easily misconstrued (using all CAPS, for example).

Before sending an e-mail, take a breath. Ask yourself if you'd like to answer questions about it in front of a jury.

Make sure to get an e-mail policy included in your handbook.

And remember, hitting the send button memorializes your comments forever.

Tardiness on the Rise

So 20% of American workers are late to work at least once a week.

In an era where jobs are becoming more and more precious (and conversely, layoffs are becoming more common) - it's disturbing to think that 1 in 5 workers think so little of their jobs that they're willing to gamble on being late once a week.

The usual culprits are excuses: traffic, dealing with children or pets, etc.

I am beginning to advise employers of the benefits of a high employment rate - that is, you can get a much more qualified worker now than ever before. And if that worker has been out of a job, they will be more loyal, work harder, and improve your productivity.

Jobs are scarce. Workers had better value their job (and show up on time), because there are many people out there who would take that job more seriously.

New I-9 Form Due April 3

It's once again time for a new I-9 form to be used by all employers.

All employees hired must complete the form within 3 days of hire. The revisions are minor, but the new forms must be used as of April 3, 2009.

Employers need not have existing employees complete the new form; the old form will suffice for them.

Who or What Is Lilly Ledbetter?

Lilly Ledbetter was an employee at an Alabama plant of The Goodyear Tire and Rubber Company, plant from 1979 until 1998. She filed a complaint with the Equal Employment Opportunity Commission in 1998, alleging her supervisors gave her poor performance evaluations because of her sex.

In 2007, by a 5-4 decision, the U.S. Supreme Court found in favor of Goodyear.

President Obama recently signed a law that overturned that ruling. The new law will make it possible for employees to assert claims of discrimination in compensation virtually without any time limit. Depending on how the statute is construed, it could affect other discrimination claims as well. As a result, employers not only will face increased discrimination claims, but also difficulty defending against them. (Even more ominous is the law backdates any claims to May 2007, when the Court made its ruling).

So now what?

1. Review your pay practices. Conduct a pay/compensation audit for your entire company to ensure your procedures meet the criteria of the Ledbetter Pay Act. This includes reviewing your past pay practices as well.
   
2. Train and educate your management team. Everyone who conducts performance reviews needs to understand the ramifications of this act.
3. Review your records retention policies.
   

Management & Leadership Trends 2009

My recent article generated enough interest that I recently turned it into a presentation. Here it is in PowerPoint format.

Management & Leadership Trends 2009

View more presentations from Eric Swenson.

Facebook - Another Employer Dilemma

Some recruiters and hiring managers just can't get enough information about a job candidate. And the restrictions on what you can - and cannot - ask in the interviewing process are restrictive.

So therefore, there is no reason for any employer to search Facebook, MySpace, etc. for further information on a candidate. Sure, you might find more information - but it may or may not be true. And if you find information that you're not supposed to know, then you could be liable for a wrongful employment decision - whether you used that information or not.

Just say no to Facebook when hiring an employee.

Jackie Ford at Marketwatch has a good article which articulates specific, additional reasons why employers can be liable.

When Employment Applications Go Bad

Starbucks narrowly missed losing another employment-related lawsuit - this time, about their employment application.

A California State Court of Appeal overturned a decision that would have made Starbucks liable for $26 million because of an improper employment application.

In California, it's permissable to ask if a candidate has previous criminal convictions - except for minor offenses, such as possession of marijuana. The Starbucks application made no such provision.

An excellent summary of the case is written by Richard S. Rosenberg of Ballard, Rosenberg, Golper & Savitt here.

What is of bigger concern is what application form most businesses are using. One of the first things we review during our HR Compliance Audit is the employment application. Small businesses often use applications from their local office supply company.

Big mistake.

Each state has different criteria, and the employment application needs to be state-specific and legally reviewed.

Time to check your employment application!

Alternatives To Employee Layoffs

When consulting on potential workplace layoffs, the first thing I try to do is get an employer to quantify how valuable an employee is. For example, when the economy eventually rebounds, what will it cost that employer not to have that employee there?

It's easy to make a rash decision to eliminate jobs, but the long-term consequences can be significant to a business.

Now, the California Employment Development Department has issued a "Guide For Worksharing Employers" - an alternative to employee layoffs. It’s an Unemployment Insurance program, which allows certain employers to reduce employee hours while the employees collect partial unemployment insurance benefits.

The program may help employers with cost-cutting as well as keep key employees. and avoid the mad hiring dash later.

An employer may be able reduce the employee workweek from five days to four - which results in a 20% reduction. The employees would be eligible to receive 20 percent of their weekly unemployment insurance benefits—and are spared the hardship of full unemployment.

There are qualifiers - but this is a good example of yet another alternative that should be considered when contemplating employee layoffs.

If You Don't Act, They Will Come

There are a number of missteps an employer can make when faced with an employee accused of harassment or discrimination.

But the easiest mistake to avoid is often the first decision an employer makes - to ignore that accusation.

Employers are mandated to take "prompt corrective action". In most cases, that means conducting an independent, unbiased workplace investigation; consulting with a labor attorney; avoiding retaliation; and taking appropriate action against the accused.

These steps are appropriate and necessary for all businesses. I'm constantly amazed, however, how large corporations replete with well-staffed human resources employees get accused in this area.

Case in point: The Cheesecake Factory, which was recently sued by the EEOC for failing to respond to accusations of same-sex sexual harassment.

The case is documented by Melissa Fleischer, Esq. in the Employment Law Information Network blog.

"Linkedin.com" and the Employer's Dilemma

Most employers have a policy in their Employee Handbook (as they should), limiting the use of internet to 'business use only'). Many employers also have 'firewalls' to ensure appropriate use of the internet and to mitigate the intrusions of viruses.

Myspace and Facebook are clearly social sites and - in my opinion - should not be used during worktime.

But what about linkedin.com? This is a business networking site which toes the line between social ("look up old classmates") and networking for professional opportunities.

The answer? It's really up to the manager. While professional networking can increase visibility and potential sales, a lack of productivity may result as employees spend too much time 'networking' and not enough time producing.

My recommendation is to monitor each employee's productivity individually. If productivity is falling, then consequences should result.

And remember - a lot of linkedin users are on the site to network for another job...

An article from Eric J. Sinrod via cnet.com adds some more perspective.

Creating Value For Your Employees

In the last two employer assessment surveys we conducted for medium-sized businesses (both since the recession started) - both employers were ranked very low by their employees with the statement "I know what my benefits are". In addition, employees felt their benefits package was inferior.

One way small businesses can manage those issues (which go directly to morale and performance) is to communicate precisely what those benefits are worth to each employee. In fact, we're designing those communications for those clients right now.

The best communication tool I've seen in this area in a long time comes from Jessica Lee, an HR executive with APCO Worldwide, and blogger at Fistful of Talent and now her own blog.

Take a look how she designed the compensation summary - it's clear, concise, and communicates not only what is included in the employee's benefits package but the dollar value on what it costs the company.

Beautiful

Pitfalls of Reductions-In-Force

We're presently working with a number of clients on reducing their workforce. There are a number of organizational development issues related to a RIF (such as who stays, who goes, what does the company look like after the reduction and how will all the tasks continue to be done).

But there are a number of compliance issues as well.

Baker Donelson has a good piece on some of those pitfalls.

A reduction-in-force is not simply "let's eliminate 'x' number of positions"; it takes careful decision making; excellent organizational development consultation; and a good employment attorney.

What's The Best Way To Communicate In The Workplace?

One of the cornerstones of my management philosophy is:

Without the ability to communicate well, a manager is doomed to failure, no matter how well he or she does in every other required area.

How should you communicate?

Lindsey Pollack, writing at abcnews.com, suggests that how you communicate information is predicated on the person you're communicating to. [By the way, she's right!]

That means you must understand your boss (or your subordinate) well enough to be able to make that correct decision.

Employers: Get a new Employment Application

When we conduct HR Compliance Audits for our clients, one of the first things we look at is their employment application (assuming they even have one).

Most smaller business go to Office Depot and pick up a packet of standard applications. Big mistake. Most of those applications are not state-specific and may even ask questions prohibited by state laws.

A legally reviewed employment application is critical. Solely relying on a resume does not solve the problem: you should get signatures that the candidate signs understanding that you're an at-will employer; that they approve of you getting references or background checks; and that any lies on the application could result in failure to hire or termination.

Also - studies suggest that up to 70% of all resumes contain false or misleading information.

An even clearer argument is made by Jennifer Brown Shaw and Matthew Norfleet in this post on the Shaw Valenza website.

Management and Business Trends For 2009

2009 is shaping up to be a challenging year for small businesses with a world full of unknowns. The businesses that succeed will be those who can quickly adapt to change; embrace unknowns; and innovate.

Successful small business owners don’t look at this recession as a challenge – they look at it as an opportunity. Your competition is going to struggle, but that doesn’t mean you have to.

For the purposes of this article, we’re defining a small business as one who employs between 1 and 500 people. Here are our predicted employment trends for 2009, and ways you can use these trends to sustain and improve your business for the long term.

1. Employees have transformed from an ‘entitlement’ mentality into a ‘privilege’ mentality.

We’ve observed over the past several years that employees have generally viewed their employment as that of entitlement – they are owed by their employers for the work they do. With a robust, growing economy, that means they can pick up and leave for a better opportunity at the first sign of disappointment. It also means their attitude is generally not that of a team player – but as an individual who deserves promotion, salary increases and more attention. This is no longer the case. 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.

2. Adapting to change is key to success.

Change is one of the most misunderstood and feared actions in business. No one knows how to deal with it well. When things are going well, you don't want change. When things are going badly, change can't happen fast enough. To employees the fear relating to change is simply the fear of the unknown. People get into comfort levels and resist mightily when someone or something attempts to break that comfort zone.

Regardless of whether it's good or bad change, it rests upon management's shoulders to incorporate the changes with a minimum of difficultly. The first thing to do is find a way to make the change work for you and your employees. What can you do within your power to mitigate the negative aspects of the change? How can you emphasize the positive aspects of change, if any?

Next, realize that you're a leader. You are on stage. Your team will know your nuances, so you're not allowed to show frustration or weakness in front of them. 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.

Some people never accept change. They are the ones who have to leave or they become so jaded and negative they no longer are functioning members of your team. When change happens, it happens. End of story.

Virtually any change breeds opportunity - the key is finding the opportunity and acting on it. Focus on the positive.

3. Wage & Hour lawsuits will become even more prevalent.

Your house needs to be in order before you take action. Labor lawyers are changing their practices to focus solely on wage and hour lawsuits, which are easy to prove and violations are myriad in businesses throughout the United States.

Employees everywhere are reading about the huge sums of money ‘won’ by disgruntled ex-employees filing lawsuits against their employers. The major focus will be on exempt or non-exempt status, meal and break periods and whether an ‘independent contractor’ should properly have been classified as an employee.

Think it can’t happen to you? Or is your excuse that you’ve never had it happen to you before?

All it takes is one employee to talk to an attorney. Ask Wal-Mart, Starbucks, Electronic Arts, and the thousands of small businesses that have paid hundreds of millions of dollars in the past year. If you’re going to terminate or reduce an employee, they’re going to look for a way to get money – especially in a dismal job marketplace.

4. The opportunity is now to do more with less.

If you're maximizing the people you have, you won't need so many people. You can get more done with fewer people. How? 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. Find your best performers. Decide you can best support you and your efforts both over the next year and the next few years.

5. Businesses that communicate effectively are those who will succeed.

There is fear in the marketplace. Employees are wondering if you’re going to cut staff, perquisites, and their free coffee. They’re wondering what you are doing to sustain your business this year. It is imperative that frequent and clear communication lead the way to your success. Your employees are heavily invested in the success of their business, and they have a right to know what you’re doing. Even saying, “I don’t know” is preferable to not communicating. And you need to do more than put out a memo or company-wide e-mail. Your managers and supervisors must be empowered to candidly talk with their staffs as well. The last thing you need is to lose a great employee simply because they didn’t know what was happening in your business.

Before you consider cuts, survey your employees: What benefits would you cut if we needed to? You will be surprised that the suggestions you get. The things you think employees hold dear are not necessarily the ones they believe are important.

6. Adversity breeds innovation.

Too many businesses over the past several years have become complacent. And that complacency (“we’ve always done it this way”) has failed both businesses and employees. When times become difficult is the exact moment to innovate. I never saw a successful manager who didn't take a calculated risk now and again, or who was not considered an innovator. On the other hand, I've seen many average managers miss becoming great because they were afraid to make a mistake. Great leaders do not avoid or fear trouble: they embrace it.

Put together groups of your employees into focus sessions. Ask them what they would do if they were in your shoes. Encourage participation and never denigrate an idea. At this time – any idea is worthy of exploration.

Your competition will be inert this year. The best way to excel over your competitors is to honestly re-evaluate your business. Solicit the advice of your employees and make no pre-conceived notions of them.

For my book, I developed a list of hallmarks of great managers of people. Several years later, they are even more appropriate for business owners and leaders:

• Vision. They know where they want to go and, equally important - they know how to get there.
• Communication. They are world class communicators.
• Equality. They treat employees the way they want to be treated and they are no more demanding of others than they are of themselves.
• Decisiveness. They can make decisions quickly, are accountable for those decisions but are never so rigid they are wed to those decisions.
• Leadership. People want to work for them. (There's a big difference between liking someone and wanting to work for someone).
• Knowledge. They know their position, their industry and what their employees do better than anyone else.
• Accomplishment. They get things done.
• Style. They are not so entrenched with their professional lives they forget that a quality personal life is the most important thing to most people.
• Commitment. They are committed to the success of their business unit, of the people who work for him, and to the company they work for.
• Temperament. Employees want to work for a person who has a great temperament – someone who isn’t moody or subject to numerous highs and lows, but one who has an understanding that he or she is always on stage, because employees are always looking at their leaders to set high standards of both temperament and judgment.

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.

Managing Layoffs

A lot of large businesses have been laying off employees, and small and medium-sized businesses are doing the same.

The difference is that (generally speaking) large corporations have large teams of attorneys and HR specialists managing that process, while smaller businesses do not.

If you're considering laying off employees, slow down. The process is fraught with potential for lawsuits if not managed properly.

We have gained many clients in the past few months who wish to layoff segments of their workforce, and doing it properly is key.

If this is a consideration for you, read this article from our friends at Jackson Lewis first.

New California Law for 2009 - Reporting Workplace Injuries

A new amendment to the California Labor Code has changed reporting of work-related injuries and illnesses.

Employers currently must file a form 5020 with the Division of Labor Statistics and Research (DLSR) within five days of an incident. Once new regulations are finalized, insured employers must file a form to be prescribed by the Division of Workers’ Compensation (DWC) with the DWC, and self-insured employers must use a new, yet to be created, electronic form within the time specified by the DWC.

Talk to your insurance carrier or human resources consultant to ensure you're using the most up-to-date forms.

The 2009 Handbook Review

Your employee handbook should be reviewed on an annual basis, and now's the time to do it.

You may ask, why do I need to review the handbook?

D. Albert Brannen of Fisher & Phillips outlines, in this article, some excellent reasons for why your handbook should be reviewed and outlines 10 policies that should be included. (Here's our list as well).

Of the many things to procrastinate on in early 2009, the handbook is not one of them. Diane Krebs, writing in the New York Law Journal, indicates that "todays environment has primed employees to sue."

A terminated or laid-off employee is not going to find another job easily. And the time spent not working is time that employee will consider looking for an attorney, or learning more about other laid off employees who have won huge sums by suing their previous employer.

FMLA - Can You Require An Employee on Leave to Check In?

Yes. Even a daily phone call is acceptable.

The 8th Circuit Court of Appeals ruled that an employer can mandate daily check-in calls for an employee who's on FMLA Leave.

I'm not sure that it's necessary to mandate 'daily' call-ins, but frequent check-ins are a good idea. But make sure that policy is in your employee handbook - and enforce it consistently.

Thanks to Maria Greco Danaher of Ogletree Deakins.

Sexual Harassment Training is a "Sham"?

Alexander McPherson, a professor at UC Irvine, wrote an op-ed in the Los Angeles Times recently outlining his reasons for not participating in mandatory Sexual Harassment training.

His rationale proves that even professors of molecular biology can be idiots.

He cites three reasons for refusing to comply with California law:

1. The training is 'a disgraceful sham';
2. "The state, acting through the university, is trying to coerce and bully me into doing something I find repugnant and offensive...I am being required to do it for political reasons. The fact is that there is a vocal political/cultural interest group promoting this silliness as part of a politically correct agenda that I don't particularly agree with."
3. [The training] "violates my academic freedom and my rights as a tenured professor."

Of course, Professor McPherson hasn't attended the training yet, and is relying on others:

As far as I can tell from my colleagues, it is worthless, a childish piece of theater, an insult to anyone with a respectable IQ, primarily designed to relieve the university of liability in the case of lawsuits...

Actually, the university has nothing to do with it; the law was passed by the state legislature and is required for all businesses with 50 or more employees.

In FY 2007, the Department of Labor received over 12,000 charges of sexual harassment. That does not take into account the number of harassed employees who went directly to their attorney, or (in California), went to the state labor board with complaints.

Professor McPherson obviously is too important and too intelligent to lower himself to the level of every other supervisor and manager in California by taking the course. It's two hours long and not the end of the world.

There is no 'vocal cultural/political interest group' promoting the training. Unless you count the thousands of businesses who have paid hundreds of millions of dollars because their management did not know how to manage a hostile workplace, or avoid retaliation.

The EEOC alone fined employers nearly $50 million for harassment charges. Someone is paying for all of that.

The imposition of training that has a political cast violates my academic freedom and my rights as a tenured professor. The university has already nullified my right to supervise my laboratory and the students I teach... It has threatened my livelihood and, ultimately, my position at the university. This for failing to submit to mock training in sexual harassment, a requirement that was never a condition of my employment at the University of California 30 years ago, nor when I came to UCI 11 years ago.

Uh, no it doesn't. If you were a professor only, you wouldn't have to 'submit' to the training. But you supervise a laboratory and others - you are in a position leadership and responsibility.

And the fact that training was never a condition of employment 30 years ago? Wah.

30 years ago, you could still smoke in the workplace. It was likely that women and minorities did not have an equal opportunity for promotions. Times change. Professor McPherson has not.

No one is impacting his livelihood other than the good professor himself. If he 'lowered' himself enough to attend a 2 hour class, there would be no impact.

But clearly he is too self-impressed and too important to do what everyone else in the state has done.

Sexual harassment training won't eliminate harassment or absolve employers from liability. But it's the law. Same as stopping at a stop sign.

Buckle up and deal with it, professor.

Additional Leadership Tools in a Recession

Since publishing my special report on Management Trends for 2009 earlier this month, I've received many e-mails on additional ideas for business owners and managers. Here are some ideas:

Mark Roden, a Subway Franchise Owner, as quoted in azcentral.com:

"This is a time when you have an excuse to cut back, but now is really the time to show your commitment to your employees."

From an Adecco article:

• Keep the line of communication open and honest -- Don't hide vital information from your employees.
  
• The only thing worse than laying someone off is losing key talent because they feared for their jobs.
• Talk frequently -- Communicate as often as possible, striving to keep your staff well-informed about what's happening internally and externally and how it will affect their place a the company.
• Be creative -- companies will need to be as innovative and creative as possible to successfully meet the current challenges.
• Treat everyone with respect -- Unfortunately, the effects of a recession are not limited to the workplace. Many of your employees will be under additional stress in their personal lives. Going the extra mile and making sure everyone is treated fairly will not go unnoticed and will yield huge benefits in the form of better retention when everything turns back around.

More coming in the upcoming weeks...

Ways To Motivate Employees In Tough Times

While I don't agree with every suggestion offered by HR author Peter R. Garber, I do agree that innovative ways of motivation are crucial to maintaining a productive work environment in tough economic times.

Adversity breeds innovation. And businesses that think about innovation first are those that will succeed in this economy.

Courtesy HR Daily Advisor, through my friends at blr.com.

Layoffs & Wrongful Termination Lawsuits

When businesses get hit by a recession, employee layoffs inevitably follow. And when layoffs occurs, wrongful termination lawsuits inevitably follow as well.

Generally, layoffs should be a last resort; there are many other techniques available to reduce your payroll costs that should be strongly considered before terminating your employees.

Extreme care must be used when terminating or laying off employees. You need to consult with a qualified Human Resources expert or employment attorney.

Do you know about the WARN Act?

Do you know about the Older Workers Benefit Protection Act?

Are you completely comfortable with knowing that your layoffs will not result in a discrimination or wrongful termination lawsuit?

Extreme care. Use it in these situations.

Age Discrimination Begins Early

The Age Discrimination in Employment Act (ADEA) bans discrimination on the basis of age, and age in this act is defined as any employee 40 years of age or older.

Emily Brandon, writing in usnews.com, quotes a report from Gray Hair Management, an Illnois-based outplacement firm. Gray Hair survey 900 executives to determine at what point does age begin to negatively affect hiring decisions. The executives said:

• Before age 50: 24 percent
• Between age 50 and 54: 39 percent
• Between age 55 and 59: 23 percent
• Age 60 or older: 11 percent

This is the first time I've seen statistics involving age discrimination by age.

Never ask a candidate how old they are. Never ask for proof of identification UNTIL AFTER a job offer has been given.

And never take any job action against an employee until you're sure you can defend that action on the basis of business, and not a protected class such as age.

$185 Million For Wage & Hour Violations

Earlier this month, the EEOC announced that it has collected $185 million in unpaid wages on behalf of more than 228,000 workers nationwide. This was for their fiscal year 20087 alone, and represents an increase of 40% over 2001 numbers.

Violations enforced by the EEOC include minimum wage, overtime, and child labor provisions of the Fair Labor Standards Act.

What this number does not include are class-action lawsuits and other legal proceedings where the employee didn't bother to go through the EEOC. And in states such as California, the state has their own enforcement department.

The biggest issue facing small businesses is compliance with the complex wage and hour issues. Ignorance is not an excuse.

Special Report - Management & Leadership Trends in 2009

2009 is shaping up to be a challenging year for small businesses with a world full of unknowns. The businesses that succeed will be those who can quickly adapt to change; embrace unknowns; and innovate.

Successful small business owners don’t look at this recession as a challenge – they look at it as an opportunity. Your competition is going to struggle, but that doesn’t mean you have to.

I just published a special report for our clients - "Management and Leadership Trends for 2009".

It's available free by clicking here.

How To Avoid Burnout

The economy has moved the overall workforce from an 'entitlement mentality' to a 'I'm just happy I have a job' mentality.

But with layoffs already taking place and more sure to follow, it means fewer workers will have to work harder. This leads to stress and burnout - and this is a realistic theme for 2009.

It's a major decision for an employee to make - do I hate my job? Or, - am I burned out?

If you truly hate your job, you need to quit. Life is too short to be saddled with a miserable existence for one-third (at least) of your life.

But if it's burnout, there are a number of steps you can take to turn it around. It always starts with you. Only you can change your attitude.

Sherri Campbell and Bob Rosner of workplace911 have these tips on turning around workplace burnout.

Courtesy ABC Action News in Tampa Bay.

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.

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

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.

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

"...it 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.

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.

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.

Courtesy msnbc.com

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.

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.

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.

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

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.

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.

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.

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.

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.