HR That Works Blog

“Knowledge has to be improved, challenged, and increased constantly, or it vanishes.”  — Peter Drucker

This issue discusses:

• Editor’s Column: What CEOs are Looking for from HR
• Seven Ways To Improve Your Employees’ Experience
• Social Security ‘No-Match’ Letters Return
• The Accommodation Process: Hurdles, Pitfalls, and Getting Out of Your Own Way
• Deductions From Pay: Dos and Don’ts

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: What CEOs are Looking for from HR

When I gave a webinar for nearly 500 CEOs in the Vistage community, they asked me to respond to these questions:

• How do you drive productivity and customer service where the primary delivery is person-to-person?
• Would you address the Employee Free Choice Act?
• When facing downsizing, how do you keep key staff motivated?
• How do exempt and non-exempt employees differ?
• What are the best practices for hiring?
• What are the best practices for performance reviews?
• How do you engage employees?
• How do PEOs and outsourcing HR impact employee productivity?
• How do you get managers and supervisors on board when they, as well as employees, focus on this downward economy?
• What are the barriers to changing organizational culture?
• How do you structure a bonus plan that’s objective and motivates everyone, especially top performers?
• What can we do to help departments work together?
• How do you increase productivity and, in general, change corporate culture with an older “veteran” workforce?
• What do we do to calm the nerves of people who remain employees during layoffs?
• How do you hold people accountable without making them feel that you’re beating up on them or getting overly defensive?
• What are the best practices for employee retention? What metrics do you monitor?
• What’s the most successful method to reduce “blame games?”
• How do you get people to admit responsibility for their actions?
• With our current economic conditions, how do you perceive HR as an asset to an organization, i.e., revenue generating?
• How can I help people with strong and different personality types get along so they can truly listen to one another?
• In a small company where people wear many hats and must adjust expectations quickly, how do you conduct performance reviews?
• What’s the single largest change we could make to improve productivity?
• How do you feel about using profit per employee as a productivity metric?
• What are your thoughts on the pros and cons of telecommuting?
• What are the top five techniques for getting the most from contractors?
• Which Web sites can we use to find information about our specific state laws?
• What are the keys to success for a new work-from-home employee?
• What are the major differences in manufacturing environments versus office or other workplaces?
• How do you keep a pipeline of qualified desirable employees even if there are no openings at present?
• How would you handle operating in a community with high drug use, high turnover, and absenteeism?

These questions are similar to those that all employers face — focused on hiring, performance, and retention. HR That Works offers excellent tools in each of these areas to help. So use them today!

Seven Ways To Improve Your Employees’ Experience

Management is concerned about employees meeting the specifications of their jobs. Beyond this, it makes sense to manage your employees so that they motivate themselves to exceed these requirements. Here are some guidelines that can help the cause:

• Be clear about what you expect from employees. One of my favorite questions is: “What are the five most important things you do in your job and how would you know if you are doing then well—without you having to ask me or without me having to tell you?” Until all of your employees can answer this question, they don’t understand their job clearly. Make sure that the employee’s “job description” covers not just what they do, but how they should do it – and what results you expect from them.
• Respect their need to manage their time. Don’t ask employees to waste time on nonsensical or nonrevenue producing tasks. Allow them to work in their highest and best use. If you want employees to grow you must delegate work to them. Even better, invite them to take work away from you and when they do, help them figure out a way to delegate their lowest-value work, perhaps to a new employee, intern, or third party.I would also help employees do a better job of understanding time management. Most managers and employees have not taken time management classes. To join the class I’ll be doing on July 14th, click here. If you can’t make it live as an HR That Works Member, you’ll be able to view the presentation on a stored basis later.
• Help them to understand the difference they make every day. Do your employees understand the “processional impact” of what they do? For example, does the tailor fully understand the joy a well-sewn dress brings to the bride? Does the customer service rep truly understand how good service that they deliver to a client or customer will pay dividends? Do we understand that how we treat each other ends up affecting how we treat loved ones? When we understand these “processional impacts” of our work, we can move closer towards the goal of self-actualization – literally feeling good about the work that we do every day. When employees create connections with fellow employees, customers, clients, vendors, etc. they make their work that much more meaningful.
• Encourage their personal growth. Let employees know what their future at the company can look like and what it would take for them to get there. Then offer them the skill testing and training they need to move forward.
• Consider their health. Whether it’s how you manage your employee health insurance or your wellness program, helping employees do a better job of managing their health will go a long way towards boosting their productivity, attendance records, general mood, creativity, etc. Find out how your health insurance broker can help you install a wellness program at your company.

Those are a few ways in which you can improve your employees’ work experience and gain their commitment. Think of how you can use these factors in your workforce.

Social Security ‘No-Match’ Letters Return What’s an Employer To Do?

From 2009 until recently, the Social Security Administration did not issue “no-match letters” – the notices from SSA that alert an employer to a mismatch between an employee’s name and social security number. The SSA halted these letters due to substantial controversy – and litigation – that challenged rules promulgated by the Department of Homeland Security mandating how employers had to respond. Now that the SSA has resumed sending these letters, you need to understand what responses are and are not appropriate.

A mismatch between an employee’s name and SSN might be due to a simple mistake (a misspelled name, oversight in registering a name change with the SSA) or illegality (an undocumented worker using a fraudulent SSN). Under the SSA’s new procedures, employers will get a no-match letter when the individual can’t be reached directly about the discrepancy. The letter states, “This letter does not imply that you or your employee intentionally provided incorrect information about the employee’s name or SSN. It is not a basis, in and of itself, for you to take any adverse action against the employee, such as laying off, suspending, firing, or discriminating against the individual.” The letter warns that taking action against the employee might violate the law. However, failing to take action in response to the letter or taking the wrong action can subject an employer to criminal investigation and prosecution, such as for knowingly employing or “harboring” unauthorized workers if the worker is in the country illegally.

A guidance document from the U.S. Department of Justice’s Office of Special Counsel (OSC) offers these recommendations for employers in responding to these letters:

• Check company records to see if there’s a clerical error.
• Ask the employee to verify the exact name and SSN number on his/her card. Although the OSC guidance does not so state, the no-match letter specifies that, while an employer should ask the employee for this information, “the employee is not required to show you the Social Security card. However, seeing this card will help ensure that the records are correct.”
• If the mismatch remains, have the employee contact the SSA to resolve the matter (and give them reasonable time to do so). An OSC frequently asked questions document notes that, although no statute defines “a reasonable period of time” SSA discrepancies can take up to 120 days to resolve.
• Meet with the employee periodically to learn and document the status of their efforts to address or resolve the mismatch.
• Follow the same procedure with all employees regardless of citizenship status or national origin.
• Review any document the employee offers that demonstrates resolution of the mismatch and submit any corrections to the SSA.

The OSC guidance document also makes these recommendations about what an employer should not do:

• Do not assume a mismatch conveys information about an employee’s immigration status or work eligibility.
• Do not use the letter as the sole basis to terminate, suspend, or take other adverse action.
• Do not attempt to re-verify the employee’s employment eligibility immediately by requesting the completion of a new I-9 based solely on the letter.
• Do not require that employees present specific I-9 documents to address a no-match.
• Do not require employees to provide a written verification report from the SSA as it might not always be obtainable.

Neither the SSA nor the OSC provides any guidance on what to do if the employee is unable to resolve the mismatch. However, consistency in the way you address these issues is critical to avoid violations of anti-discrimination laws (including discrimination based on national origin or immigration status), and you must make decisions about whether to keep employing individuals who can’t resolve the matter. Otherwise, you might face a charge of “constructive knowledge” that you employed undocumented workers. We’d recommend that you work with counsel to develop policies that address these matters and resolve individual “no-match” cases.

Provided courtesy of the Worklaw® Network firm Shawe Rosenthal.

The Accommodation Process: Hurdles, Pitfalls, and Getting Out of Your Own Way

What causes the accommodation process to break down? Job Accommodation Network (JAN) studies on the costs and benefits of job accommodations for people with disabilities show that there are three major hurdles to effective job accommodation solutions:

Hurdle #1. Lack of information on what medical documentation an employer can request. Employees might not understand that their employers can request them to provide certain medical documentation in response to an accommodation request, and if they fail to do so, they might not be entitled to the needed accommodation.

To determine whether a particular employee has a disability, you may request medical documentation that shows whether the person has an impairment that substantially limits one or more major life activities. You may require that this documentation come from an appropriate health care or rehabilitation professional, including – but not limited to – doctors (including psychiatrists), psychologists, nurses, physical therapists, occupational therapists, speech therapists, vocational rehabilitation specialists, and licensed mental health professionals.

For more information on medical exams and inquiries, including forms for employers, individuals, and medical professionals, visit http://AskJAN.org/topics/medexinq.htm.

Hurdle #2. Lack of clarification on determining the essential functions of a position. Employees might request the removal of an essential job function without realizing that this isn’t required as a reasonable accommodation.

You may require an individual with a disability to meet the skill, experience, education, and other job-related requirements of a position, including the performance of its essential functions with or without an accommodation. To determine whether a job function is essential, begin by determining if the employee in the position is actually required to perform the function. According to the Equal Employment Opportunity Commission, other criteria include: (1) a limited number of other employees available to perform the function or among whom the function can be distributed; and (2) the need for special expertise or ability to perform the function. To determine whether a job function is essential, consider these factors:

• The employer’s judgment
• A written job description prepared before advertising or interviewing applicants for a job
• The amount of time spent performing the function
• The consequences of not requiring a person in this job to perform a function
• The work experience of people who have performed the job in the past and are currently performing similar jobs.

Although employers are not required to eliminate an essential function, lower production standards, or provide personal use items, they can do so if they wish. For information on identifying the essential functions of a job, including other relevant factors and examples, visit http://AskJAN.org/links/ADAtam1.html#II.

Hurdle #3. Lack of agreement on effective reasonable accommodations, including the role of temporary accommodations, leave time, and reassignment. Employees might reject an offer of reassignment, not realizing that reassignment to a vacant position is a form of reasonable accommodation when there is no accommodation available in the current position.

In most situations, you should first consult with the employee who requested the accommodation to clarify what the individual needs and identify the appropriate reasonable accommodation. The employee will often be the best resource for information about accommodation needs. By talking with the employee who requested the accommodation and obtaining medical information if needed, you should be able to identify the problem, which is the first step in determining effective accommodation solutions.

Once you have identified the employee’s limitations and abilities, the next step is to determine how they impact the employee’s ability to perform the job. To make this determination, consider what specific job tasks, work environments, equipment, or policies are creating barriers to successful job performance. It might sometimes be necessary to go beyond a traditional job description and consider other factors, such as the equipment used to perform a task, where the work is performed, and why certain policies are being followed.

Once you have identified the employee’s limitations and abilities and determined how they impact job performance, you’re ready consider accommodation options, such as temporary accommodations, leave time, and reassignment.

For more information on determining accommodations, see JAN’s Five Practical Tips For Providing And Maintaining Effective Job Accommodations at http://AskJAN.org/media/FivePracticalTips.doc.

You can often avoid these hurdles by discussing the situation in advance and expedite the process by understanding your rights and responsibilities. To discuss your case in detail, contact JAN directly for one-on-one consultation.

Thanks to JAN Principal Consultant, Beth Loy, Ph.D.

Deductions From Pay: Dos and Don’ts

Many employers are confused over what they may or may not deduct from pay. Here’s what the FLSA has to say:

“[T]o qualify for exemption under the FLSA generally an employee must be paid at a rate of not less than $455 per week on a salary basis. As a rule, if the exempt employee performs any work during the workweek, he or she must be paid the full salary amount. An employer may not make deductions from an exempt employee’s pay for absences caused by the employer or by the operating requirements of the business. If the exempt employee is ready, willing and able to work, an employer cannot make deductions from the exempt employee’s pay when no work is available.

“To qualify for exemption, employees generally must meet certain tests regarding their job duties and meet certain compensation requirements. Job titles do not determine exempt status. You should also review the other sections of this Advisor for help in determining whether the employee meets the duties tests for exemption.
“Deductions from pay are allowed:

• When an employee is absent from work for one or more full days for personal reasons other than sickness or disability.
• For absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness.
• To offset amounts employees receive as jury or witness fees, or for temporary military duty pay.
• For penalties imposed in good faith for infractions of safety rules of major significance.
• For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions.
• In the employee’s initial or terminal week of employment if the employee does not work the full week.
• For unpaid leave taken by the employee under the federal Family and Medical Leave Act.

“In addition, deductions may be made from the pay of an exempt employee of a public agency for absences due to a budget-required furlough, and special rules apply when such employees take partial-day (or hourly) absences not covered by accrued leave.”

Each of these allowable deductions is described elsewhere in the Compensation Requirements section:

What kinds of deductions are not allowed?
“Deductions for partial day absences generally violate the salary basis rule, except those occurring in the first or final week of an exempt employee’s employment or for unpaid leave under the Family and Medical Leave Act. If an exempt employee is absent for one and one-half days for personal reasons, the employer may only deduct for the one full-day absence. The exempt employee must receive a full day’s pay for the partial day worked. Other examples of improper deductions include:

• A deduction of a day’s pay because the employer was closed due to inclement weather.
• A deduction of three days pay because the exempt employee was absent for jury duty.
• A deduction for a two-day absence due to a minor illness when the employer does not have a bona fide sick leave plan, policy or practice of providing wage replacement benefits.
• A deduction for a partial day absence to attend a parent-teacher conference.

What’s the effect of isolated or inadvertent improper deductions?
“Improper deductions that are either isolated or inadvertent will not violate the salary basis rule for any employees whose pay had been subject to the improper deductions, if the employer reimburses the employees for the improper deductions.

What if the improper deductions are not isolated or inadvertent?
“If an employer makes improper deductions from employees’ pay (as opposed to isolated or inadvertent improper deductions), the salary basis rule will not be met during the time period in which the improper deductions were made for employees in the same job classification working for the same manager(s) responsible for the actual improper deductions. Therefore, the affected employees will not have been paid on a salary basis as required for exemption during that time-period.

How do you distinguish between isolated or inadvertent improper deductions and an actual practice of making improper deductions?
“A practice of making improper deductions demonstrates that the employer did not intend to pay employees on a salary basis. The factors to consider when determining whether an employer has an actual practice of making improper deductions include, but are not limited to:

• The number of improper deductions, particularly as compared to the number of employee infractions warranting discipline.
• The time period during which the employer made improper deductions.
• The number and geographic location of employees whose salary was improperly reduced.
• The number and geographic location of managers responsible for taking the improper deductions.
• Whether the employer has a clearly communicated policy permitting or prohibiting improper deductions.

“If an employer has a clear policy prohibiting improper pay deductions that includes a complaint mechanism, reimburses employees for any improper deductions and makes a good faith commitment to comply in the future, the salary basis of pay will not be violated unless the employer willfully violates the policy by continuing to make improper deductions after receiving employee complaints.

What if the employer does not reimburse the employee for the deductions?
“If the facts show that the employer has a practice of making improper deductions and the employer fails to reimburse employees for any improper deductions or continues to make improper deductions after receiving employee complaints, the salary basis rule is not met and the exemption is lost during the time period in which the improper deductions were made for employees in the same job classification working for the same manager(s) responsible for the actual improper deductions.”

Readers lucky enough to have to comply with California’s laws can go to http://www.dir.ca.gov/dlse/FAQ_Deductions.htm for more information.

Form of the Month

HR Monthly Report (PDF) – Use this form to inform your CEO about the strategic activities you engage in every month.

(HR That Works Users can access this form in Word format by logging on to the site).

Podcast

Click here to to listen to this month’s newsletter podcast.

“Punishing honest mistakes stifles creativity. I want people moving and shaking the earth, and they’re going to make mistakes.”  —Ross Perot

This issue discusses:

• Editor’s Column: The Two Views of Human Resources
• Dealing with Body Odor and Other Hygiene Problems
• The Lawsuits are Coming! The Lawsuits are Coming!
• Auditing Your Wage and Hour Practices
• Are Your Employees Grumpy About Groupon?
• Workforce Planning Risks

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

The Two Views of Human Resources

Here’s what HR professionals are told to worry about most:

• FMLA, ADA, EEOC, DOL, OSHA, NLRB, FLSA, OFCCP, GINA, HIPAA, COBRA, Title VII, etc.
• Discipline, termination, layoffs, bullies, violence, EPLI, etc.
• Protecting ourselves from all the above.

Here’s what should concern them most:

• Hiring, orientation, training, performance, teamwork, leadership, time management, systems, strategy, branding, communication, quality, customer service and marketing.
• Creating a constant improvement process in each of these areas because they help to grow the company.

Of course, you can’t ignore compliance concerns as the article below points out. However, the legalistic concerns can overwhelm and distract us to the point that they blind us to what really matters. Here’s my challenge to HR professionals – whether you’re part or full-time; young or old; experienced or inexperienced, and no matter the size of your company. Carve out time to help your company improve in these strategic growth areas. Make yourself relevant to the bottom line. HR That Works offers a variety of excellent tools to help you do exactly that.

Dealing with Body Odor and Other Hygiene Problems

HR folks have to deal with some unpleasant subjects, and this is certainly one of them. Body odor can present a real workplace challenge. Just ask any space shuttle astronaut or submarine officer. People can have offensive odors for a number of reasons:

• Soiled clothing or shoes
• Lack of bathing
• Bad breath
• Incontinence
• Menstruation
• Liver and other organ problems
• Diet
• Bad perfume
• Too much perfume
• Smoking
• A problem with sweating
• Disability

Employers can try to prevent this problem in general by providing effective air circulation systems, odor eaters, employee uniforms, employee flexibility – and, if necessary, a human resource policy.

To deal with body odor, follow these steps:

• First, verify all complaints personally to make sure there’s no teasing, bullying, etc. Then verify the complaint personally.
• If the employee has body odor, have a direct conversation – don’t beat around the bush. Often, employees won’t realize they have a problem until you tell them. Say, “We’ve had complaints from a number of co-workers about offensive body odor and I have had those complaints verified. (If appropriate: I can understand their concern). Are you aware that you have this problem?
• At this point, an employee can deny knowing about the problem (honestly or otherwise) or, they can admit knowing about it. They can say either that they’ll try to take care of the problem or that they don’t care what other people think about it. They might also claim that they’ve tried to do all they can, but they have a physical disability that prevents them from doing any better.
• If an employee does not claim to have a medical problem and won’t do anything to improve their condition, you have the right to terminate them, or perhaps even better, give them unpaid time off to think about whether they want to come back to work a “fresher” person. If they claim there’s a medical basis, you need to have an accommodation discussion (more on that later). Either way, ask the employee to take care of the problem and ask if there’s any way you can help them. This is a matter of common decency, whether required by the ADA or not.
• Watch out for any potential discrimination or national origin claims that the employee might make based on what you say or by what managers or co-workers have said. Go back to these employees and let them know you’re taking care of the problem and that they should not tease or discuss it with the employee.
• Consider holding accommodation discussions. If the employee claims the problem arises from a disability and you’re subject to the ADA (15 or more employees) or FEHA (five or more in California), you’re required to have an accommodation dialogue. Begin by starting a paper trail and have the employee get their physician to identify the nature of their disability, the limitations, and ways to mitigate its effects. Use the forms on HR That Works. Accommodations might include working from home, allowing the employee to obtain the appropriate treatment, moving their working location, or perhaps reassigning them to another job.

Ultimately, if there’s no “reasonable” accommodation because anything you can do would cause an undue burden on the company, you do not have to accommodate that employee. For further accommodation information, check out the HR That Works ADA Training Module. Also, consider looking at the Job Accommodation Network’s Web site at www.askjan.org.

The Lawsuits are Coming! The Lawsuits are Coming!

A recent article in Corporate Counsel Magazine discussed the reality that “employees are suing like never before.” For example, “skycaps, bank loan officers, bartenders, phone company engineers, financial research associates, exotic dancers, drug store assistant managers, computer technicians, janitors, paramedics, delivery truck drivers, exterminators, waiters, cable TV repair workers, and chicken processors all sued their employers over pay issues in 2010.” Defense counsel claims that the employment law arena is like “the new slip and fall cases for plaintiffs’ attorneys.” Of course, the recession, layoffs, high unemployment, and an administration that encourages victimization have a lot to do with it.

Companies today face constant challenges from new regulatory requirements. Under the Obama Administration we’ve had updates to the FMLA and ADA, an expansion of the NLRB and EEOC agenda, more wage and hour and discrimination claims filed than ever, and a continuing class-action frenzy. Not surprisingly, many of these cases lack merit. Just as plaintiffs’ counsel will file large class action claims, knowing that they will probably force a company to settle rather than litigate, many individual claims also lack merit. The EEOC settles approximately 80% of claims without any finding of discrimination.

Wage and hour class action claims remain the biggest concern for large companies, Most of the companies of the size that use HR That Works (with an average of 15 to 500 employees) are too small to create a class large enough for most plaintiffs’ lawyers. However, companies remain subject to individual wage and hour claims, as well as allegations of discrimination.

Finally, there’s a widespread fear of discrimination litigation. According to the EEOC, these cases involved: Race (35.9%), sex (29.1%), disability (25.2%), and age (23.3%). Interestingly, the largest category of claims filed involved retaliation (36.3%), most of them based on Title VII complaints. Other categories of claims involved national origin (11.3%), religion (3.8%), the Equal Pay Act (1%), and GINA (.02%). As far as I can see, there’s no end in sight. We’re only beginning to deal with an activist NLRB. The EEOC wants to extend its reach, especially in background checks and compliance concerns related to government contractors. The commission has been on a hunt after 1099 misclassification cases, and 22 states have introduced legislation to outlaw bullying in the workplace.

The article concludes by noting that the U.S. Supreme Court will be ruling on three large class action cases, including Duke v. Walmart. How the court decides these cases will have a huge impact on large companies and a lesser effect on small to medium-sized firms.

Here’s the lesson in all of this: Although you might be small enough to avoid the notice of the plaintiffs’ employment bar for the moment, the odds will catch up with every employer eventually. Sound risk management requires you to have comprehensive Employment Practices Liability Insurance (EPLI), together with the necessary policies, procedures, and training. Once an employee lodges a complaint, investigate it promptly and thoroughly, usually with the help of counsel.

Auditing Your Wage and Hour Practices

Given the wage and hour litigation that misclassification claims generate, I wonder why companies pay anyone but their top executives on a salary-exempt basis. The so-called “prestige” and extra effort from employees that a company gains by offering the exempt status does not offset the potential loss of time, money, and resources arising from litigation. To minimize unnecessary wage and hour claims, the HR That Works Compliance Audit recommends some of these guidelines.

• Audit your exempt status employees. Do they truly fit under a professional, managerial, administrative, computer or other exemption? If you determine that they don’t, see the White Paper: So You Have a Wage Claim Exposure – What Do You Do About It?Consider having attorneys conduct or manage these audits.
• Make sure to have time records recorded and maintained accurately. Perhaps the biggest challenge in the area involves employees having time for rest and meal periods deducted automatically when, in fact, they didn’t take those breaks at the specified time. Teleworkers, remote workers, and portal-to-portal issues come up in many suits. Many smaller companies don’t have time clock mechanisms and rely on either manual entries or word of mouth. If such a company faces an audit, they’d find it hard to disprove an employee’s allegation of overtime. Make sure your managers and employees receive proper training on time-keeping protocols.
• Have employees certify that their time records are accurate. This newsletter offers a form to help with this.
• Consider using sophisticated methods to tie-in time clocks with time on the computer, at the register, clocking in and out of buildings, and so on.
• Store your personnel, time and wage records for at least four years.
• If you require employees to drive in company vehicles to and from a job site, or to transport heavy equipment to and from work, make sure that they receive proper pay for this time.
• Provide adequate rest periods, including at least 30 minutes for lunch.
• Be sure that salaried, non-exempt employees receive overtime pay, even without authorization.
• Provide supervisors with overtime authorization forms (including the client or work project, work to be done and expected amount of overtime), which they must sign before an employee works overtime.
• Make sure that your sales compensation program clearly defines when employees “earn” commissions, and what happens to uncollected commissions after the employee leaves the job.
• Provide a cap on accruals in your PTO and vacation policies.
• Comply with labor enforcement standards for the employment of minors (obtain work permits, etc.).

Are Your Employees Grumpy About Groupon?

Although more and more establishments are taking advantage of such programs as Groupon and Living Social, many of these firms – and their employees – come to regret the experience. Failure to manage these programs properly can destroy their value. Before you run an online promotion such as Groupon, ask yourself these questions:

• What are the short-term and long-term benefits of this promotion? How does it fit into your overall marketing plan? Are you prepared to lose money on the deal short term to capture a long-term customer?
• How will you staff around the promotion? A few days after the promotion hits, you can expect a mass influx of customers. Bear in mind that business might also peak in the last few days of the promotion as people scramble to cash in their coupons.
• How do you position the promotion to your team? Why should they get on board with it? What’s in it for them? If you’re running a restaurant, how will you prepare employees to deal with more business, and unfamiliar, possibly annoying customers? Will you be helping them with additional staffing and/or paying overtime? Anticipate employees’ potential concerns and resistance before you launch the promotion. Get them involved in ideas that can make it a success.
• What type of training will you provide to make sure the promotion goes according to plan? For example, when a restaurant customer presents a server with a Groupon coupon, will they react with a smile because they see a new customer and the promotion is working, or a frown because they anticipate a poor tip? Train servers to say something like “I’m glad to see that you’ve taken advantage of the Groupon promotion! My name is Amy, and I’m here to give you great service today. Please let me know how I can help. Have you been here before? (The idea is to start getting important information about new customers). Offer customers some type of “cheat sheet” to fill out and then attach to the coupon they hand in. Remember, you want to capture as much data as possible to know if this is truly a first-time customer or just someone taking advantage of the current discount.
• How will you help the customer recognize that the wait staff lives on their tips or salespeople on their commissions? For example, I’ve heard that many Groupon restaurant customers offer lower tips, especially because they base their math on the cost of the coupon. You might want to show a recommended tip on the bill (15% of a normal bill = X. 20% = Y).
• So that you’re on top of managing the promotion, plan to get feedback from your staff right away, and be ready to make changes on the fly.
• Know how you’ll end the coupon customer’s experience. At the end of the visit, you might have employees say: “Thanks for visiting us today! You know, if you give us your e-mail address or phone number, we’ll e-mail or text the great specials we offer on a regular basis. If you have a business card, we’ll enter the information into the program or I can give you a card to complete. If you want to discontinue receiving these promotions at any time, just cancel the notifications.” If you’re running a restaurant, put a notice on the menu or bill to the effect that “Many customers love taking advantage of our frequent promotions. If you haven’t signed up for our notifications, please ask your server about this.”

Promotions are great. The right ones can help grow a business quickly – and destroy one quickly, too! Make sure to plan your promotions well and include your entire team in the process.

Workforce Planning Risks

Workforce planning refers to everything from filling open positions to the inclusion of HR metrics. For our purposes, think in terms of the flow of employees through the company. As with any risk management, begin by assessing the risks involved:

• Access to available talent
• Cost per hire and time for hire
• Retention and turnover
• Productivity and quality
• Layoffs and downsizing
• Retirement and redevelopment
• Compensation structures
• Compliance exposures, including Title VII violations and compensation violations.

For example, if your turnover rate is 15% and the industry rate is 11%, your company might be at greater risk. However, if your higher turnover rate results from strict performance demands, you might end up having the most profitable company in the industry. Be sure to weigh the specific risks in every situation. For example, if a company has to pay overtime because it can’t staff positions quickly enough, it ends up not only paying higher compensation, but burning out the workforce and increasing turnover, thus exacerbating the problem. The company might plan to ameliorate this risk by using a temporary staffing firm to help them with their short-term staffing needs.

Other risks are more difficult to quantify, such as a failure to conduct proper succession planning. Great companies know who’s in the pipeline for all critical positions – sometimes the bench is two or three players deep. Other companies “run bare,” putting themselves at risk if they should lose one of their key employees. One solution: Key Person insurance.

Do you have a plan to manage the workforce planning risks most critical to your organization? HR That Works provides training and strategic tools that can help you deal with many of these risks.

Form of the Month

Time Sheet Certification Form (PDF) – Use this form to make sure that employees report their work hours accurately.

(HR That Works Users can access this form in Word format by logging on to the site).

Podcast

Click here to to listen to this month’s newsletter podcast.

In this one hour radio show recording, HR That Works president, Don Phin, discusses with Workplace Matters host, Phil Kessler, the problems faced with the Victim, Villain and Hero roles we play in the workplace.

“You don’t get paid for the hour. You get paid for the value you bring to the hour.” – Jim Rohn

This issue discusses:

• Editor’s Column: Describing the Physical Demands of a Job
• When Managers Don’t Speak Up
• Social Media Policies: Be Prepared
• Overtime Back Wages Settlement Costs Levi Strauss $1 Million+
• Managing Mental Disabilities
• Does the Employee Fit the Job?

We have also provided you with the Form of the Month

Please click here to view the newsletter in PDF.

Editor’s Column: Describing the Physical Demands of a Job

I recently saw a job posted for an HRIS expert at an auto dealership. Curious, I scrolled through it, where it stated at the end in bright red print:

“Important Notes: Environment and Physical Activity

“The environment for this position is an open office that’s mostly clean and comfortable. The job involves driving a personally owned vehicle approximately 20% of the time, which includes exposure to outside weather elements and moving mechanical parts. It might include some minor annoyances such as noise, odors, drafts, etc. The incumbent is in a non-confined office-type setting, in which he or she is free to move about at will. The incumbent spends time writing, typing, speaking, listening, lifting (up to 25 pounds), carrying, seeing (such as close, color and peripheral vision, depth perception and adjusted focus), sitting, pulling, walking, standing, squatting, kneeling and reaching.

“The incumbent might operate any or all of these devices: Copy and fax machines, adding machine (calculator), typewriter, personal computer and related printers.

“The work environment characteristics described here are representative of those an employee encounters while performing the essential functions of this job.

“The physical demands are representative of those that an employee must meet to perform the essential functions of the job.

“Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions.”

Have we regressed to this, for a job that involves someone sitting at a computer all day? Really?

When Managers Don’t Speak Up

I’ve handled more than 3,000 “hotline” calls from managers trying to deal with their employees. I find that very often they don’t let employees know about something—when they should do so. These include: Poor performance, body odor, bringing personal problems to work, wasting time on gossip, using social media, shopping online, coming and going late, 20-minute breaks, smelling like a chimney when they return from the break, their dress, their communication skills, the time they waste on the basketball pool, being on the layoff list – the list goes on. The real question is: Why don’t managers speak up? In my experience, there are many reasons: The employee intimidates them, they’re new to the management role, they get no support if they want to act, they prefer to avoid conflict, they don’t want to be become “villains,” they fear having their shortcomings pointed back at them, they don’t want to cause a lawsuit – you name it!

What are you doing to help your managers move past this fear-based limitation in a way that can make them proud? How can they face these concerns and build a relationship with employees in the process? By the way, what are you holding back on with anyone you manage?

Social Media Policies: Be Prepared

Social media and networking sites have become commonplace in today’s workplace. The most popular sites (such as Facebook, Twitter, LinkedIn, and YouTube) connect people by enabling them to search for former classmates, colleagues, and friends. Users can leave public messages for their “friends,” and/or create interest groups or “networks.” The problem for employers is that employees might be posting negative, misleading or defamatory information about their company, its employees or its products on social media sites. More and more businesses have instituted policies to help protect against posting such negative information on social media sites. A recent case settled by an employer in response to an unfair labor practices charge brought by the NLRB illustrates one of the pitfalls concerning such policies. The company, American Medical Response, had fired an employee for bad-mouthing her boss on Facebook. The NLRB held that the employer’s policy, which prohibited employees from “making disparaging, discriminatory or defamatory comments when discussing the Company or the employee’s superiors, co-workers and/or competitors,” was overly broad; because it violated Section 7 of the National Labor Relations Act, which permits employees to engage in “concerted activities for the purpose of … mutual aid and protection.” In settling, the company agreed to revise its social media policy to ensure the protection of employees’ rights to discuss working conditions.

Bear in mind that, even in a non-union workplace, employees have the right under the NLRA to share information regarding working conditions. Before taking disciplinary action against employees for their social media activities, consider whether the employee’s conduct could arguably constitute protected concerted activity.

To ensure that your social media polity does not violate employee Section 7 rights, we’d recommend following these guidelines:

• Employees may not use company equipment or systems to “twitter” or log onto social networking sites.
• Twittering on personal cell phones, Personal Data Assistants (PDAs), etc. may not interfere with working time.
• Employees should not tweet or post information on any social networking site on behalf of the employer, without approval by management.
• Employees may not use company logos or trademarks in tweets or twitpics (a service that enables users to post pictures to Twitter) or any other social networking site without company authorization.
• Employees may not promote the company’s products or services on any social networking site or online message board without prior management authorization and disclosure of their employment relationship.
• Employees may not post information on any social networking site that disparages the company’s products or services, contains false statements, or breaches the employer’s confidentiality policies.
• Employees who have any information on their social networking site about the company should provide a disclaimer on their profile page that the opinions are their own, and not those of the company.

Article courtesy of Worklaw® Network firm Shawe Rosenthal.

Overtime Back Wages Settlement Costs Levi Strauss $1 Million+

This recent news story carries a lesson for every employer.

Levi Strauss Agrees to Pay More Than $1 Million in Overtime Back Wages to Nearly 600 Employees Following U.S. Labor Department Investigation

Overtime violations found at retail stores nationwide

SAN FRANCISCO — Levi Strauss & Co. has agreed to pay $1,011,413 in overtime back wages to 596 employees nationwide after the U.S. Department of Labor found that the company violated overtime and recordkeeping provisions of the federal Fair Labor Standards Act.

An investigation conducted by the San Francisco District Office of the Labor Department’s Wage and Hour Division determined that the San Francisco-based company misclassified several groups of workers, including assistant store managers of newly acquired stores, as exempt from overtime. Although their counterparts at previously existing stores were exempt from overtime compensation, the newly hired employees were not.

“Misclassification of employees has serious and adverse consequences for employees, as well as for corporations,” said Secretary of Labor Hilda L. Solis. “When violations of federal labor laws are discovered, this department will take appropriate action to ensure that workers receive the wages they deserve.”

The company failed to record all hours employees worked in its payroll system. Instead, the misclassified assistant store managers were required to work off the clock during late night closings, early morning openings, and staffing shortages. Various administrative employees working at the company’s headquarters also were misclassified as exempt from FLSA coverage and found to be owed overtime back wages.

This investigation covered back wages for time worked over a two-year period. Levi Strauss has agreed to pay the back wages and committed to upgrade its time and attendance system, as well as maintain future compliance with the law. The applicable employees are now treated as non-exempt under the FLSA.

Founded in San Francisco in 1853, Levi Strauss was the first company to manufacture blue jeans. Today, the company operates 164 retail stores and employs more than 4,000 workers in the U.S., and its global operations span more than 100 countries.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers are required to keep accurate records of all hours worked by covered employees. The FLSA provides an exemption from both minimum wage and overtime pay for workers employed as bona fide executive, administrative, professional and outside sales employees. It also exempts certain computer employees. To qualify, employees generally must meet certain tests described in the act regarding their job duties.”

Lesson Learned: Unless you have a legitimate business need for classifying employees as exempt, you’re far safer classifying them as non-exempt and adjusting their hourly pay so their take-home, including overtime, matches their exempt salary. We’d recommend that HR That Works use the Overtime Authorization form to reduce unauthorized or unnecessary OT usage.

Managing Mental Disabilities

It takes the EEOC 56 pages to define a “mental disability.” Approximately 58 million Americans, one in four adults, experience a mental health impairment in a given year (National Alliance on Mental Illness, 2007). One in 17 individuals lives with a serious mental health impairment, such as schizophrenia, major depression, or bipolar disorder (National Institute of Mental Health, 2008).

Common mental impairments include:

• Bipolar disorder, sometimes referred to as manic depression, “is a medical illness that causes extreme shifts in mood, energy, and functioning. Bipolar disorder is a chronic and generally life-long condition with recurring episodes of mania and depression that can last from days to months that often begin in adolescence or early adulthood, and occasionally even in children.” An estimated 10 million American adults have bipolar disorder.
• Borderline personality disorder (BPD)is “an often misunderstood, serious mental illness characterized by pervasive instability in moods, interpersonal relationships, self image, and behavior. It is a disorder of emotional dysregulation. This instability often disrupts family and work, long-term planning, and the individual’s sense of self-identity.” It’s estimated that 1% to 2% suffer from BPD.
• Major depressionis “persistent and can significantly interfere with an individual’s thoughts, behavior, mood, activity, and physical health. Among all medical illnesses, major depression is the leading cause of disability in the United States and many other developed countries.” There are approximately 15 million American adults with major depression.
• Obsessive compulsive disorder (OCD)“occurs when an individual experiences obsessions and compulsions for more than an hour each day, in a way that interferes with his or her life.” Estimates indicate that 2% of American adults have OCD.
• Panic disorderoccurs when a person “experiences recurrent panic attacks, at least one of which leads to at least a month of increased anxiety or avoidant behavior. Panic disorder may also be indicated if a person experiences fewer than four panic episodes but has recurrent or constant fears of having another panic attack.” Approximately 2% to 5% of American adults suffer from panic disorder.
• Post-traumatic stress disorder (PTSD)is “an anxiety disorder that can occur after someone experiences a traumatic event that caused intense fear, helplessness, or horror. While it is common to experience a brief state of anxiety or depression after such occurrences, people with PTSD continually re-experience the traumatic event; avoid individuals, thoughts, or situations associated with the event; and have symptoms of excessive emotions. People with this disorder have these symptoms for longer than one month and cannot function as well as they did before the traumatic event. PTSD symptoms usually appear within three months of the traumatic experience; however, they sometimes occur months or even years later.” It’s estimated that 2% to 9% of adult Americans (including 15% to 30% of veterans) have PTSD.
• Schizophrenia “often interferes with a person’s ability to think clearly; to distinguish reality from fantasy; and to manage emotions, make decisions, and relate to others. Some 2 million American adults are schizophrenic.
• Seasonal affective disorder (SAD) is “characterized by recurrent episodes of depression – usually in late fall and winter – alternating with periods of normal or high mood the rest of the year.” Note: SAD is not regarded as a separate disorder by the DSM-IV (APA, 1994), but is an added descriptor for the pattern of depressive episodes in patients with major depression or bipolar disorder.

Here’s a quick overview of some job accommodations that might be useful for people with mental health impairments.

Maintaining Stamina During the Workday:

• Provide flexible scheduling
• Allow longer or more frequent work breaks
• Allow employee to work from home during part of the day, or week
• Provide part-time work schedules

Maintaining Concentration:

• Reduce distractions in the work area
• Provide space enclosures or a private office
• Allow for use of white noise or environmental sound machines
• Allow the employee to play soothing music using a portable player and headset
• Increase natural lighting or provide full spectrum lighting
• Plan for uninterrupted work time
• Allow for frequent breaks
• Divide large assignments into smaller tasks and goals
• Restructure job to include only essential functions

Staying Organized and Meeting Deadlines:

• Make daily TO-DO lists and check items off as they are completed
• Use several calendars to mark meetings and deadlines
• Remind employee of important deadlines
• Use electronic organizers
• Divide large assignments into smaller tasks and goals

Dealing with Memory Deficits:

• Allow the employee to tape record meetings
• Provide type written minutes of each meeting
• Provide written instructions
• Allow additional training time
• Provide written checklists

Working Effectively with Supervisors:

• Provide positive praise and reinforcement
• Provide written job instructions
• Develop written work agreements that include the agreed upon accommodations, clear expectations of responsibilities, and the consequences of not meeting performance standards
• Allow for open communication to managers and supervisors
• Establish written long term and short-term goals
• Develop strategies to deal with problems before they arise
• Develop a procedure to evaluate the effectiveness of the accommodation

Interacting with Coworkers:

• Educate all employees on their right to accommodations
• Provide sensitivity training to coworkers and supervisors
• Do not require employees to attend work-related social functions
• Encourage employees to move non work-related conversations out of work areas

Handling Stress and Emotions:

• Provide praise and positive reinforcement
• Refer to counseling and employee assistance programs
• Allow telephone calls during work hours to doctors and others for needed support
• Allow the presence of a support animal
• Allow the employee to take breaks as needed

Maintaining Attendance:

• Provide flexible leave for health problems
• Provide a self-paced work load and flexible hours
• Allow employee to work from home
• Provide part-time work schedule
• Allow employee to make up time

Dealing with Change:

• Recognize that a change in the office environment or of supervisors may be difficult for a person with a mental health impairment
• Maintain open channels of communication between the employee and the new and old supervisor in order to ensure an effective transition
• Provide weekly or monthly meetings with the employee to discuss workplace issues and productions levels

To learn more, visit the Job Accommodation Network’s Accommodations Ideas for Mental Health Impairments.

Does the Employee Fit the Job?

I’m a big fan of using character assessment tools – and one of my favorites is www.zeroriskhr.com. My team and I are currently using their post-employment program to help improve our communication and make me a more effective boss. The folks at ZeroRisk reminded me that the employer’s goal is to match skills and natural abilities with job function. As the saying goes, “Put square pegs in square holes!”

To help reach this goal, consider how employee personalities can differ:

People Orientation

• Reads people – can sense how to be effective with different individuals
• Needs others to feel good
• Enjoys individual interaction
• Enjoys people in group settings
• Prefers to not deal with the feelings and individual needs of others
• Likes to help others

Results Orientation

• Has good practical judgment
• Likes to get things done using their hands
• Enjoys solve thinking problems
• Likes to apply theories to real-life problems
• Prefers to think about things, rather than applying them to business issues
• Likes to put things where they belong – creating or preserving order

Environment Needs

• Is comfortable with a routine
• Likes order, structure, and certainty
• Enjoys planning and organizing
• Needs variety in using creative thinking
• Needs to work in a top-level, winning company

Behavioral Characteristics

• Thinks out of the box
• Obeys the rules, no matter what
• Able to do things exactly as instructed
• Able to do repetitive tasks consistently
• Thinks in terms of the team and belonging to the team
• Will be protective of company policies, standards, and mission

Individual Characteristics

• Is an individual and needs to express their individuality
• Able to handle rejection –has a thick skin
• Has a lot of courage
• Is passionate about their work
• Able to keep secrets
• Likes to be in the middle of things
• Flexible in midst of change and surprises
• Likes to be the center of attention
• Team player – little self-glory
• Accurate at knowing what they’re best suited to do
• Capable in a highly competitive environment
• Accurate ideas about their own strengths and weaknesses

Ambition Characteristics

• Committed to personal growth
• Likes to win
• Needs rewards to be directly tied to their work
• Driven to excel and improve
• Strong sense of accountability
• High achievement drive
• High degree of initiative

The point is: Match the personality to the job!

Form of the Month

Employee Compensation and Benefits Survey (PDF) – To make sure that your benefits are working for you and your employees, give them this survey.

(HR That Works Users can access this form in Word format by logging on to the site).

Podcast

Click here to listen to this month’s newsletter podcast.

“Soon is not as good as now.” – Seth Godin, Poking the Box

This issue discusses:

• Editor’s Column: What’s Going on Out There and How it Affects Your Business
• Are Your Employees Worth What You’re Paying Them? Really?
• The Causes of Workers Compensation Retaliation Claims
• The Indirect Cost of Accidents and Lawsuits
• The “Going and Coming” Rule
• Failure to Communicate Ruins Employee’s FMLA Claim

We have also provided you with the Form of the Month

Please click here to view the newsletter in PDF.

Editor’s Column: What’s Going on Out There and How it Affects Your Business

Every week I read Time, Business Week, and The Economist, together with about a dozen other periodicals. I’d like to share a number of the main themes “going on out there” and how they might apply to running your business. Remember, what’s going on out there is a reflection of what’s going on “in here.”

1. Education equals wealth. All three magazines tend to piggyback stories from each other. All three have discussed recently how income disparities nationwide and worldwide are impacting society. Fact is, those with the greatest level of education also have the most amount of wealth. The U.S. remains a world leader in education. We have nine out of the world’s top 10 endowed universities and remain the primary source of global innovation. For example, Harvard faculty members have earned more Nobel prizes than either France or Russia.

According to one of the articles, the world’s standard for wealth remains at $1 million in the bank. Another article concluded that it takes approximately $70,000 per year to be happy (i.e., middle class).

How this applies to managing your business: The wealthiest companies will also be the most educated ones, with the most educated owners, managers, and employees. They will place a high value on constant training. Successful companies will give employees an opportunity to learn more so they can earn more.

2. Tiger moms, tiger bosses, and the tiger self. Battle Hymn of the Tiger Mother by Amy Chua, a book written by a controlling Asian-American parent, describes the strictness with which she raised her two daughters. It caused a lot of discussion online, in the media, and among my wife and her friends. Of course, the liberal reaction was that the parent was too harsh. By her own admission, this was sometimes true. However, look at the results. She has two highly talented, healthy, and well-behaved young adults who claim to have no regret with their mother’s tough parenting style. On the other hand, we have an entire generation of parents more interested in being their kid’s best friend than a parent. Many of these kids get to do whatever they want to do, including watching hours of TV, texting friends, or playing video games. These children are disconnected and will not be prepared to compete with the tiger children. Their only hope will be to be more innovative than their counterparts. Unfortunately, I don’t see how hours of TV or video games will help them to be more innovative.

Dan Kennedy reminds us that if we want to be rich, we shouldn’t do what the huddled masses do with their time – which includes watching TV, engaging in gossip, spending hours on social media, fantasy football, and anything to do with Kim Kardashian or Charlie Sheen. I believe that there will be a demarcation not just between the intelligent and the unintelligent, but also between the watchers and the doers.

How this applies to managing your business: Are you a tiger boss? Are you overly demanding of your employees? Do they appreciate or resent your strict ways? Do you have a tiger self? Are you tough on yourself? Are you unnecessarily tough on you? In my opinion, the workplace, like the home, requires a balancing act. I expect nothing but the best from myself and the people around me at work and home. Anything less than excellence is simply not acceptable. I understand the importance of discipline, planning, and process. I also understand that my employees need permission to think for themselves and not to be so afraid of punishment for making mistakes that they fail to push themselves to higher levels.

3. A continuing loss of faith in institutions. There’s a breakdown in confidence with our financial, educational, political, and business institutions. Politics and economics are transitory. Yesterday’s regime is not current enough to be trusted and today’s is not experienced enough to be trusted. As we lose faith in institutions, we’re gaining faith in communities. We trust those who are closest to us. Given the advent of social media, somebody can be very “close,” yet 6,000 miles away. On the other hand, you might connect with a political activist two blocks away from you that you’ve never met before.

How this applies to running your business: Business is an institution. Statistics have shown and common sense reveals that we’re less enamored with our institutions today than ever, whether it’s Congress, the local school board, GM, or your company. There’s less loyalty to business entities among consumers and employees than ever. Employees today trust in and are loyal to the communities that involve their work and personal activities. Today’s leader realizes that they have to foster those communities and motivate them toward profitable ends. You can entertain and talk with people all day long, but as the IBM commercial says, “How do you make money at this?” The answer is to build this community outside of your four walls with your clients, customers, and prospects. A recent book I read, Crush It, encourages us to talk about what we’re passionate about. Do your employees have permission to do this? This might be something as simple as an account manager talking about the passion she has for doing a great job for her clients every day.

4. Hard times for democracy. There’s been a decline in democratic governments. Certainly, imbalances in wealth could be one cause for this challenge. The age-old challenge of trying to get government to spread the wealth through capitalist and democratic means is falling prey to fear and greed. Even here at home, we’re losing faith in our democratic institutions, even as we continue to realize that they’re the least of all evils.

How this applies to your business: First, the workplace is not a democracy, even if it’s unionized; it’s a business. The challenge I see is that business owners in tough times who operate more out of fear than greed, can move toward an authoritative management style. This will produce short-term results at best and resentment and eventual overthrow at worst. Ask how you can be more “inclusive” of the thoughts and feelings of your workforce.

5. The Consumer Electronics Show. Listening to and reading about what went on in Las Vegas assures me that people are becoming increasingly detached from their natural environment. Whether it’s Apple TV, Wii games, or new tools for texting, it appears that the only way we’ll be connected in the future is through digital means. I saw a news video recently in which a woman, while texting to a friend at a mall, tripped over a knee-high wall and fell in to a water fountain in the middle of the mall. One of the employees released the video thinking it was hilarious, and it became a YouTube sensation. Of course, the woman expressed her outrage at this insensitive act and her lawyer had the guy fired! Amazing.

What this means for your business: First, it’s hard to fight today’s reality. Think Kung Fu. Go with the flow! We have to be willing to communicate through these tools as owners and employees. Sticking our head in the sand or playing dinosaur means going out of business. However, as John Naisbett warned more than 25 years ago, the more we go “high-tech,” the more we need “high-touch.” Today, the company that can go high touch will win not just people’s minds, but their hearts and wallets as well. Going high touch in a high-tech world is the single most powerful way to show you care.

6. Us versus Them. Where would the good ol’ plot be without “goodness triumphs over evil?” More than half of the content in these leading news magazines focuses on some type of conflict: Democrats vs. Republicans, North Sudan separating from South Sudan, Arabs vs. Jews, Libyan vs. Libyan, China vs. the world — and all of the violence, destruction, pain, and war that these conflicts create.

What this means for your business: No matter how hard you try to be a good boss, at some point you’ll need to deal with conflicts — employers vs. employees, like cats vs. dogs. As leaders, we need to acknowledge this fact, stand it on its head, and not let workers portray themselves as our victims. If you want to play us vs. them, then do it with the competition.

7. Increasing financial and environmental debt. It doesn’t seem that this trend is going to stop or go away any time soon. Grim realities such as the mortgage scandal, the oil spill, and global warming aren’t going away. In fact, there’s no reason for things not to get worse. We’ve been mortgaging our future for our present and will leave an awful legacy for our children and grandchildren.

What this means for your business: First, we have to teach employees financial literacy. HR That Works members can start by watching the Accounting Game Webinar. Then watch Coach George’s webinar on what you can do about the impact of financial stress on your workforce. You don’t have to become LEED-certified, but you can certainly attempt to recycle paper and reduce waste. Encourage your employees to come up with suggestions about how you can make a greener company. It’s a “cool” thing for them to do.

8. Sometimes the greatest risk lives next door. If the Tucson tragedy taught us anything, it’s that mayhem can show up anyplace at any time.

How this applies to your business: Sometimes we’re so busy looking at the risks we face from the “outside” we forget that the greatest risks that lie closest to home. For example, most auto accidents occur within a one-mile radius of our home or business. The greatest risks we face in our business generally come from the inside as well: The sales manager who did such a bad job that sales were cut in half; the marketing executive that endorsed a risky campaign damaging our brand for years; the driver addicted to crystal-meth who drove head-on into that family. In the end, the greatest risk to you or your business is … you and your business!

9. Last, but not least, there’s been a change in our Zodiac signs! Millions of new-agers have been thrown into psychic turmoil. Think of all the wasted horoscopes. The horror of it all.

What can you do about this at work? Absolutely nothing but to sympathize with those folks who thought that it meant anything in the first place.

That’s my report of today’s news and how it affects your business.

Are Your Employees Worth What You’re Paying Them? Really?

In an interesting Freakonomics podcast, authors Levitt and Levine discuss whether expensive wines are worth the price. Their conclusion: They are not. Here’s an example of an interesting experiment. Participants were asked to rate two different wines. All they knew was that one was a $10 bottle and one was a $50 bottle of wine, when in fact it was the same $20 bottle. The participants overwhelmingly chose the $50 bottle as having the better taste. Interestingly, some participants asked the testers if it could, in fact, be the same bottle of wine. When told that they’d have to decide for themselves, most of them reached the “logical” conclusion that they had to be different wines because of their different pricing – so they rated the more expensive wine as better.

Here’s the point: We often value things more simply because we pay more for them. If this holds true for wine and cars and dates, then why wouldn’t it be true for employees? Employers have tried to finagle with compensation systems from Day 1. What’s the right mix of compensation to help generate the greatest return on investment of an employee or workforce? Because it’s a mistake to underpay or overpay employees, how do we decide just how much to? Here’s an easy three-part solution:

1. Identify the market rate. What does the “average” employer pay for a certain level of employee? You can learn this by going to the statistics at BLS.gov, your state labor agencies, sites such as Salary.com, or your local employers’ group. You might also have industry-related associations and can hire some competitive intelligence to provide these rates. In my experience and opinion. To pay anything more than 25% above grade is essentially throwing away money. For example, in the fast food industry if $8.50 is the norm, it might make sense to pay $10.50, as In-N-Out Hamburger does in California, or the premium Costco pays its employees. However, it doesn’t make sense to pay even 1% above grade if it’s not going to buy you a more productive employee. Perhaps there are other ways to attract productive employees. You might be able to attract them by being the most outrageous or flexible or cutting-edge workforce.
2. Think team bonuses. When I perform employee surveys at companies, I always ask whether employees prefer incentives based on individual performance, on that of a team, or of the entire company. Over the years, I’ve found that where there’s a great deal of trust, people prefer team-based incentives. If trust is low, they prefer individual incentives. Of course, we trust those people to whom we’re closet. As an owner, if I wanted to help generate trust, I would offer team-based incentives. As the saying goes, “A rising tide floats all boats.” I would recommend a bonus (say 10% of net profits) and then distribute it based on employee’s gross compensation. For example, if one employee makes $50,000 per year and one employee makes $25,000, the person making $50,000 gets twice the bonus. This is a simple formula that avoids a lot of wasted time and energy trying to finagle 2% here, 4% there, etc. If an employee displays outstanding performance, the chances are that they’re in line for a raise or promotion. This is how you manage going forward.
3. Award people immediately on an individual basis when they go the extra mile. According to Barber’s 1001 Proverbs, “The greatest benefit is the one last remembered.” Don’t underestimate the power of: (a) rewarding what you want to reinforce, and (b) doing it immediately. These rewards need not be expensive; they’re as much about acknowledgment as they are about money. Of course, a little bit of cash helps too.

The Causes of Workers Compensation Retaliation Claims

I conducted an examination of California Labor Code, Section 132(a) Workers Compensation retaliation claims filed over many years. When filing a Section 132(a) claim, “in addition to establishing that the industrial injury has resulted in some detriment, the worker must also prove that he or she was singled out for disadvantageous treatment because of the injury.” This is typical of how other states handle Workers Comp retaliation claims. Some states allow workers to bring separate claims outside the comp system. Here’s a summary of these cases:

Conduct that will not result in a 132(a) verdict:

• Where there is truly no work available.
• Where the employee is unfit for duty because they will risk further injury or aggravation to an injury.
• Where there are safety issues related to the employee or third parties.
• Where there’s a business necessity (such as lack of funds or a change in company direction).
• If they were terminated for cause (and consistently with how others were treated in engaging in similar wrongdoing).
• If there’s a layoff or reduction in force.

What’s not OK:

• If there/s a change in pay, hours or duties without a business justification.
• Where they were “singled out” or otherwise treated “differently” than others.
• Where the company makes return-to-work or light-duty decisions without medical proof.

Note that ERISA often preempts benefit discrimination claims in this area.

The Indirect Cost of Accidents and Lawsuits

Risk management experts, safety experts, accountants, actuaries, and other professionals make the distinction between direct and indirect costs of accidents, lawsuits, and so forth. For example, the cost of turnover in the HR That Works Turnover Cost Calculator includes the direct costs (such as paying for a Help Wanted ad) and indirect costs (such not growing the business due to lack of manpower). Two of the most commonly insured employee risks are those for work-related injuries and employment practice claims. This means that the direct costs associated with a Work Comp injury are those related to medical expenses and expense reimbursement, which the Workers’ Compensation carrier usually pays.

We usually recommend that our clients pay the compensatory portion of the claim because if they don’t, the insurance company will pay it and then get their money back by increasing your experience modifier over the next three years. In a sense, they don’t pay these claims, they finance them. In addition to the increase in the experience modifier (MOD) and cost of future insurance, there are also indirect costs:

• Damage to property (building, tools, machinery, etc.)
• Emergency supplies, cost
• Possible media exposure/brand change
• Investigation time, claim management time
• Affect on employee morale
• Overtime, costs of replacing employee
• Increased experience modifier
• Damage to client relations if accident is “on site”
• Injury to third parties
• Additional legal fees

Of course, these ratios depend on the type of claim or injury, type of business, days lost from work, and so forth. When it comes to an employment practices claim, direct costs are for attorney fees, litigation costs and any settlement or verdict payout. The indirect costs include: Loss of employee morale, damaged customer and client relations, copycat claims, loss of knowledge base, training, and experience.

The risk management literature offers a wide range expert opinion on the range of direct to indirect costs. Only one out of seemingly dozens of surveys identifies indirect costs as lower than a 1:1 ratio to the direct costs. Some go as high as 20 times the direct costs (for example, when an expensive piece of machinery is destroyed in the process). Based on my personal experience and that of experts I agree with, we can safely assume at least a 1:1 ratio in most circumstances. For example, you might have to pay out $50,000 to settle the lawsuit, plus another $50,000 to replace the employee! Unfortunately, these indirect costs are often uninsurable, and in many cases dwarf the insurable costs in a given risk scenario. Interestingly, the indirect cost ratio has been diminishing as medical and legal expenses continue to soar.

These ratios also depend on such factors as:

• Type of claim/injury
• Type of business
• Claim value
• Days lost from work
• Legal jurisdiction
• Management response

Finally, check out the $afety Pays e-tool.

The ‘Going and Coming’ Rule

The theory of respondeat superior makes employers vicariously liable for wrongful acts committed by employees during the course and scope of their employment. However, the “going and coming” rule generally exempts employers from liability for wrongful acts committed by employees while on their way to and from work, because employees are said to be outside of the course and scope of employment during their daily commute. A well-known exception to the going-and-coming rule arises if the use of the car gives some incidental benefit to the employer. Thus, the key issue becomes whether the employer derives an incidental benefit from the employee’s use of the car. This has been referred to as the “required-vehicle” exception. The exception can apply if the use of a personally owned vehicle is either an express or implied condition of employment, or if the employee has agreed, expressly or implicitly, to make the vehicle available as an accommodation to the employer, and the employer has “reasonably come to rely upon its use and [to] expect the employee to make the vehicle available on a regular basis while still not requiring it as a condition of employment.”

For example, Section 401.011(12) of the Texas Labor Code, which codifies this general rule, states:

Course and scope of employment means an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer and that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer. The term includes an activity conducted on the premises of the employer or at other locations. The term does not include:

(A) transportation to and from the place of employment unless:

• the transportation is furnished as a part of the contract of employment or is paid for by the employer;
• the means of the transportation are under the control of the employer; or
• the employee is directed in the employee’s employment to proceed from one place to another place; or

(B) travel by the employee in the furtherance of the affairs or business of the employer if the travel is also in furtherance of personal or private affairs of the employee unless:

• the travel to the place of occurrence of the injury would have been made even had there been no personal or private affairs of the employee to be furthered by the travel; and
• the travel would not have been made had there been no affairs or business of the employer to be furthered by the travel.

In insurance policies, the general definition describes coverage, and travel must meet both its components to be in the course and scope of employment. Subsections (A) and (B) are exclusions, each followed by exceptions. Subsection (A) has three, disjunctive exceptions; if any one is met, the exclusion does not apply, and travel to and from work is not excluded from the course and scope of employment. Subsection (B) has two, conjunctive exceptions and applies unless both are met. Subsection (B) is somewhat convoluted. More simply put, it does not exclude work-required travel from the course and scope of employment merely because the travel also furthers the employee’s personal interests that would not, alone, have caused him to make the trip.

A recent California case, Lobo v. Tamco, 182 Cal. App. 4th 297 (Cal. App. 4th Dist. 2010), interpreted this standard very broadly. Here are the facts of this case:

“Daniel Lobo, a San Bernardino County deputy sheriff, was killed on October 11, 2005, as the result of allegedly negligent operation of a motor vehicle by defendant’s employee Luis Duay Del Rosario, while acting in the course and scope of his employment by defendant Tamco. Del Rosario was leaving the premises of his employer, Tamco. As he drove his car out of the driveway and onto Arrow Highway, he failed to notice three motorcycle deputies approaching with lights and sirens activated. Deputy Lobo was unable to avoid colliding with Del Rosario’s car and suffered fatal injuries.

“Deputy Lobo’s widow, Jennifer Lobo, filed a wrongful death suit on behalf of herself and the Lobos’ minor daughter, Madison. Kiley and Kadie Lobo, minor daughters of Deputy Lobo, filed a separate wrongful death action through their guardian ad litem. Both suits alleged that Del Rosario was acting within the course and scope of his employment by Tamco at the time of the accident…..

“When Del Rosario left Tamco on the day of the accident, he was going home. However, if he had been asked to visit a customer site, he “would have gotten in [his] car and used [his] car to go to that facility,” just like on any other day. He kept boots, a helmet, and safety glasses in his car.

“This evidence is clearly sufficient to support the conclusion that Tamco requires Del Rosario to make his car available whenever it is necessary for him to visit customer sites, and that Tamco derives a benefit from the availability of Del Rosario’s car. Tamco, however, emphasizes that it was rare that Del Rosario visited customer facilities or jobsites, and contends that in all cases in which the “required-vehicle” exception to the going and coming rule has been found applicable, driving was an “integral” part of the employee’s job and that Del Rosario’s occasional use of his own car to visit customers is insufficient as a matter of law to invoke the exception.

“Tamco has not cited any case in which a court has addressed a contention that the employee’s use of his own car was too infrequent to warrant application of the exception and we have found none.”

Lesson learned: Realize that allowing employees to use their personal vehicles on company business can expose you to liability. Make sure that employees know the parameters and have good driving records, and make sure there is plenty of insurance to handle any possible claims.

Failure to Communicate Ruins Employee’s FMLA Claim

The Seventh Circuit Court of Appeals recently upheld the termination of an employee who sued, alleging FMLA interference and retaliation after termination for failure to contact his employer during a nine-day leave of absence to address a medical emergency involving his mother. In Righi v. SMC Corp. of America, a sales representative, while attending a mandatory training seminar, received word that his mother was experiencing a medical emergency. The employee left the training session and, despite informing a co-worker that he was leaving due to a family emergency, made no attempt to contact his supervisor. The next day, the employee sent his supervisor an e-mail stating that his mother, who was a diabetic, had slipped into a coma. After stating that he would need the next few days off to make arrangements for his mother’s care, he wrote: “I do have the vacation time, or I could apply for the Family Care Act, which I do not want to do at this time.” Upon receiving the e-mail, the supervisor repeatedly attempted without success to contact the employee by phone to inquire further about his need for leave.

Finally, after nine days of silence, the employee called his supervisor and was terminated the next day for violation of the employer’s leave policy, which provided that an unapproved absence of two or more consecutive days was grounds for termination. After the district court granted summary judgment on the employee’s claims of FMLA interference and retaliation, the employee appealed. The Seventh Circuit Court of Appeals held that the employee’s e-mail, in which he mentioned that his mother was in a diabetic coma, was sufficient to alert the employer that the employee might qualify for FMLA leave, and that the employer was obligated at that point to make further inquiry regarding the employee’s need for FMLA leave. The Court also found that the employer properly attempted to fulfill its obligation by making numerous calls to the employee and that the employee’s failure to respond to his employer’s calls caused his FMLA claims to fail. The employee was required under both the FMLA and his employer’s written policy, to contact his employer to let the employer know of the likely duration of his requested leave, which he failed to do.

Article courtesy of Worklaw® Network firm Shawe Rosenthal.

Form of the Month

Best Practices for Managing Confidential Client and Customer Information (PDF) - You don’t need to be a financial institution to develop these best practices.

(HR That Works Users can access this form in Word format by logging on to the site).

Podcast

Click here to listen to this month’s newsletter podcast.

“Skills don’t last a lifetime. They depreciate. Any company has to recognize that not only is the human capital of their employees a major asset, it is also a depreciating asset that needs continuing investment.” – Gary Becker, Noble Laureate in Economics

This issue discusses:

• Editor’s Column: Create an Emotionally Efficient Workplace
• The EEOC’s Web Site Keeps Improving
• The Workforce Trends that Matter Most
• Recession: Good For Some Things – Not So Good For Others
• Who Checks on What?
• What I Learned from Scientific American Mind this Month
• Pre-Employment Inquiries

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Create an Emotionally Efficient Workplace

The bottom line goal of most business is to make money. Well-run businesses make their money more efficiently and last longer than their competitors (Southwest Airlines offers a perfect example). Michael Gerber taught us in The eMyth that we should build our business as if we’re going to franchise it. Dr. Deming taught us about systems, systems, systems. Theoretically, we want to rid our organizations of any unnecessary or wasteful dramas. Ideally, we’d cut out all the nonsense and become increasingly productive. Workers would support each other as team members and continually educate themselves because that’s the smart and logical thing to do. That makes sense, doesn’t it?

As Mr. Spock on Star Trek never fully grasped, much of what goes on in organizations today is nonsense! As I state in my workshops, “If it doesn’t make sense, don’t try to make sense out of it!” Every day we bring to work an emotional self that needs drama and connection in order to express itself. Shrewd executives and managers realize the power of tapping into this need, rather than trying to control or dampen it. They know that while systems are important, people are not robots and their emotions need, demand, and deserve attention.

We should address this emotional need by creating great employee experiences – and do so with as little energy, effort, or dollars as possible. At first, this thought might seem Scrooge-like. However, it’s far from that. Any marketer will tell you the importance of trying to get the highest return on marketing dollars by creating great client or customer experience as efficiently as possible. There’s absolutely no reason not to apply this principle toward motivating your workforce too!

There’s a two-step approach to getting this right. The first is to identify the basic needs of each group of employees. The easiest way to do so is through understanding Maslow’s Hierarchy of Needs (click here to watch my quick video on it). After identifying these needs – in a sense, understanding your marketplace – analyze your efforts, using the formula of cost, ease, and impact, just as a marketer would. For example, a marketing firm might determine if they want to use a direct mail approach or telemarketers. They can identify the cost of each approach, evaluate the ease or difficulty of implementation, run test studies to identify the impact, and then roll out the more efficient program, while continually testing to improve it. A perceptive employer will take the same approach when marketing to its employees. What’s the cost of the program? How difficult will it be to implement it? What will its impact be? You can easily identify the first two and survey for the third, eliminating any guesswork.
Consider two examples. In the first, I recommended that one of my clients, who was going through difficult times, assemble a “fun committee” to balance out the negative dramas with some positive ones. I suggested that the company contribute $10 per employee per week toward this committee. The employees could implement any program they wanted, as long as they followed the “formula.” They decided that they were either going to provide healthy lunches every Friday or wash people’s cars at the end of every other Friday. The cost was the same for both programs, as was the ease of implementation. The carwashes won out over the lunches 2 to 1. Now that’s a 100% and enormous distinction when it comes to the ROI of those dollars!

In the second example, the owner of a temporary construction firm told me one of his employees wanted a full-blown Health insurance program, understanding that he would have to pay a portion of it. Up to that point, the owner had provided employees with a medical services discount card that cost him $50 per month. Of course, he was shocked when he saw Health insurance would cost him and his employees roughly $300 per month each! When confronted by the high expense of these plans, he decided to give me a call before he made any decision. I began by asking him how many employees had made this request. He told me it was only one. Based on a hunch from the first example, I suggested that he ask his employees (almost every one being someone who drove his truck to work every day), if they’d rather have a co-pay medical plan that would cost them $300 a month or have their trucks washed for free every Friday. As you can probably guess, these employees preferred having their trucks washed (there’s a reason that most of them were temporary workers). This solution saved the business owner thousands of dollars, and created some very happy employees, driving home with a clean truck every Friday.

The bottom line: Bring good strategic thinking to your soft stuff, as well as the hard stuff. Building great employment relationships is essential if you want to have a great company.

The EEOC’s Web Site Keeps Improving

Although I certainly disagree with some of the EEOC’s agenda, it’s important to point out what they have done right. One of those things is using their website to provide information. Of course, the primary purpose of the commission is, and must be, protecting workers. However, they – and the DOL, OSHA, NIOSH, JAN, and others – have also done a better job of getting info out there for employers. You’ll find this directory at the bottom of the site’s home page (www.eeoc.gov). The fact that more EEO claims were filed in 2010 than ever, and the apparent EEOC agenda of generating even more claims, should put all employers on notice. We’ll continue to share great government-related content and provide our Members with strategies, tools, and support to avoid destructive and expensive employee claims.

The Workforce Trends that Matter Most

According to the U.S. Bureau of Labor Statistics, the workforce is getting older, more ethnic, more temporary, less unionized, and more sophisticated. The BLS expects the highest growth in the areas of private educational services (2.4%), health care and social systems (2.3%), professional and business services (2.1%), and construction (1.7%). All other sectors had less than 1% growth expected during the next nine years.

What really matters is the workforce trends that relate to your business. For example, if you’re in the utility industry, which is expecting a negative growth rate, how will you be able to attract talent? If, on the other hand, you’re in health services, how will you retain your highly valuable employees?

Prudent business owners and HR executives should consider how these trends will impact them during the next five years. I believe that the single most important trend you will face is the continued fading of control as a management model in today’s workplace. It’s difficult to control bright people when they can easily work for themselves should they choose to do so.

Recession: Good For Some Things – Not So Good For Others

An interesting SHRM post-recession workplace report showed that the recession had a highly negative impact on employee morale and financial concerns but actually had a positive effect on competitiveness, retention, efficiency, and creativity. Big surprise. My two cents: We should be worrying about morale, finances, competitiveness, retention, efficiency, and creativity in any economic environment. By the way, HR That Works offers a variety of tools to help with each of these concerns.

Who Checks on What?

The December HR Magazine shared these statistics from a SHRM survey:

• Companies doing criminal background checks? 73% all, 19% selectively, 7% no
• Companies doing credit background checks? 13% all, 47% selectively, 40% no
• Companies conducting pre-employment drug testing? 55% all, 17% selected, 21% no

As with most SHRM surveys, most of the companies surveyed are very large. Usually less than 15% are the size of our Member base. Nevertheless, where does your company fit in this? We’d advise you to do criminal background checks and drug tests on everybody, and credit background check on everybody you’re allowed to by law. This will eliminate exposing yourself to unnecessary risks.

(Note: The EEOC is severely restricting credit background checks on a disparate impact basis. Work with our partner, www.globalhrresearch.com to get it right!)

What I Learned from Scientific American Mind this Month

One of the ways we can get great ideas in HR is to read outside the field and ask how that learning applies to managing people. Here are a few articles from a recent Scientific American Mind that provide insight:

1. “Any Excuse for Busyness.” According to this article, people who find reasons to occupy their time with activity rate themselves as happier. I’m always amazed at how people waste time when they’re waiting in the airport, flying, sitting on a bus, or driving. I find that this time provides a wonderful opportunity to learn, making the hours fly by while I become that much smarter.
2. “Beware Your Beverage.” This study concludes that people judge alcohol drinkers as less intelligent, even if they themselves are drinking at the time! A word to the wise: If you’re trying to get a job, advance up the corporate ladder, or close a deal, a sparkling water with lime will do fine.
3. “When Mom Has Favorites.” This article argues that children who receive unfair treatment versus their siblings are more likely to grow into depressed adults. Now those adults are working for you and have become highly sensitive to unequal treatment. Because they’re adults, they can actually do something about it, such as filing a discrimination claim. In addition, the favored children (insert employee) can experience guilt about their preferred status, extra demands from parents (insert boss), and resentment from siblings (other employees). Bottom line: Watch out for the unintended consequences of playing favorites.
4. “The ‘Me’ Effect.” One of my Top 10 favorite business books, Leadership and Self-Deception, reminds us how we can deceive ourselves into believing that we make more positive deposits than we do negative ones. According to recent research, most people do not know what their own “trait-affected” presence is. “It’s not very easy to detect, because you don’t actually get to see what the world is like when you’re not around,” says Noah Eisenkraft. The article reminds us that each person gives out a vibe – what the researchers call a trait-affected presence – that affects everyone they come in to contact with in the same way. So much so that “certain emotions (such as discouragement, frustration, and stress) — are affected as much by who you are interacting with as by who you are.” So not only can we deceive ourselves about being discouraging, our very essence can have this affect on people.
5. The article, “Their Pain, Our Gain,” points out that we actually enjoy each other’s misery. The Germans use the word schadenfreude to describe that small, private rush of glee in response to somebody else’s misfortune (i.e., it’s blasting snow where I grew up – and I’m so glad to be in the sunshine). When measured in the brain, this feeling is similar to the satisfaction from eating a good meal. The researchers posit that humans probably developed the instinct to notice, and profit from, the weakness of their competitors. When groups feel schadenfreude it can become more potent and invidious, driving deep-seated prejudices that can lead to harmful, even violent behavior. That’s why Alfred Cohen reminded us to beware of schadenfreude in his book, The Case Against Competition. Competition, whether focused on an external or internal adversary, can have negative effects if not managed properly.
6. “What Makes a Good Parent?” As with the previous article on parenting, this one also applies to management. Here’s the Top 10 list, beginning with the most important:
   1. Love and affection
   2. Stress management
   3. Relationship skills
   4. Autonomy and independence
   5. Education and learning
   6. Life skills
   7. Behavior management
   8. Health
   9. Religion
   10. Safety

   For example, although we might not use the word “love” nor be openly affectionate at work, we certainly can have a deep, healthy respect for the other person. We can realize too that they have their weaknesses, as we have ours. As another example, owners have the right to share their religious conviction, but not in a way that’s disruptive or discriminatory. Each of these other factors relates directly to managing performance, motivation, and teamwork.

7. “Dunbar’s Number.” Revolutionary biologist Robert Dunbar argues that our brain has limits on how many people we can truly keep within our social group. The maximum is about 150 people. Of course, this takes different types of relationships into account. At one end of the spectrum, we have a core group of people we talk to once a week. At the other end, we have acquaintances with whom we speak about once a year. This makes me question someone who brags that they have 5,000 people on their Facebook page.
8. Perhaps the most interesting article in the magazine had to do with a meeting of the minds between top-end psychologists and magicians – including some from Las Vegas that we all know. Here’s a summary of the conclusions:
   • Humans have a hard-wired process of attention and awareness that’s “hackable.”
   • When people focus on one thing, their brains automatically suppress everything that happens around them. Magicians have devised a number of techniques that exploit this “tunnel vision.”
   • People can pay attention in various ways. Magicians exploit “top down” or deliberate attention by, say, asking a person to scan a book. They capture “bottom up” attention with distracting displays, such as doves fluttering out of a hat. Magicians will have you focus on one big thing while they go about doing a number of smaller things underneath your radar.
   • Interestingly, if an action seems to have an obvious purpose, such as adjusting your hat, an audience generally won’t notice that the magician has moved to put something under that hat. The best con of course, is the most natural one.
   • When magicians do their verbal patterning, they aim to generate an internal dialogue in your mind – a conversation with yourself about what’s taking place. This results in a great deal of confusion. It slows your reaction time and leads you to second-guess yourself.
   • Many magicians introduce delays in the method behind a trick and its effect to prevent you from linking the two. They call this “time misdirection.”

The bottom line: Beware of tricksters using these techniques!

If there were ever a magazine that will stretch your thinking, this one is well worth a subscription. Go to www.scientificamerican.com/mind.

Pre-Employment Inquiries

Although it’s not binding on employers, a recent informal discussion letter from the EEOC about the use of criminal records as an employment-screening tool reminds us that employers must be careful when making certain inquiries during the pre-employment phase. Here are 10 tips from the letter:

1. Ask questions related to the applicant’s qualifications. The purpose of an interview is to obtain sufficient job-related information to make an informed employment decision. Questions that aren’t job-related will be viewed as suspect, particularly if they appear to have an impact on a protected class.
2. Be careful about questions regarding outside activities. Questions about an applicant’s membership in clubs, organizations, or about hobbies, if not job related, can be problematic if they reveal information about protected characteristics.
3. Don’t ask about familial status or intentions. The EEOC will assume that the purpose of such inquiries is to screen out individuals who answer “incorrectly” and that the questions will have a discriminatory impact on women.
4. Avoid asking about child care arrangements. This is an area of questioning that might screen out female applicants. However, it’s entirely proper to present the specific job schedule and ask all applicants whether they can regularly comply with this schedule.
5. Stay away from physical and mental health inquiries. It is illegal to ask an applicant questions that relate to health or medical conditions, with one exception: If an applicant’s apparent disability legitimately calls into question his ability to perform a job, the person may be asked how he would perform the job, with or without a reasonable accommodation.
6. Age is not a permissible inquiry. The Age Discrimination in Employment Act makes it illegal to discriminate based on an applicant’s age. It’s best to avoid all inquiries, such as when an applicant attended or graduated from school, because such an inquiry might reveal her age.
7. Don’t ask about discrimination charges or lawsuits. It’s illegal to retaliate against a potential employee for complaining about discrimination. Failing to hire someone because of his answer to this question might imply that your company engages in unlawful retaliation.
8. Avoid asking about prior Workers’ Compensation claims. It’s illegal for an employer to discriminate against someone because of Workers Compensation claims that they have filed.
9. Arrest record inquiries are improper. The EEOC and courts have held that questions about arrest records can have an intimidating effect on members of certain minority groups and can’t be justified by business reasons. Although questions about an applicant’s criminal convictions are legal, take convictions into account in the hiring decision only if they’re related to the job in question.
10. Be careful with post-offer requests for information. Wait to obtain certain types of information until after you have made an offer of employment. For example, you may require pre-employment medical examinations post-offer, so long as you make this requirement of everyone in the same job classification. Ask for information for insurance and benefits purposes, which may include personal characteristics and familial status, only after hiring.

Note: HR That Works members can use our post-offer fit-for-duty tools and watch Don’s webinar on Getting Pre-Hire Physicals Right.

Article courtesy of Worklaw® Network firm Shawe Rosenthal.

Form of the Month

Hazard Assessment Checklist (PDF) – Use this form to check for hazards common to most environments.

(HR That Works Users can access this form in Word format by logging on to the site).

Podcast

Click here to listen to this month’s newsletter podcast.

“What would you become if you identified your greatest strengths and removed your worst constraints?”     – Flip Flippen, author of The Flip Side

This issue discusses:

• Editor’s Column: Become a Human Resources Superstar!
• The Disability Interactive Process
• ‘Got A Minute?’
• Wage & Hour Insights: Salary Deductions for Exempt Employees
• Most Employers Fail FLSA Compliance
• What Documents Should an Employee’s Personnel File Not Include?
• Distracted Driving
• Occupational Fraud and Abuse

We have also provided you with the Form of the Month

Please click here to view the newsletter in PDF.

Editor’s Column: Become a Human Resources Superstar!

Seth Godin defines the new American Dream as: “Be remarkable. Be generous. Make art. Connect people and ideas.” Today’s strategic HR executive embraces this concept. As I see it, four attributes or characteristics make or break an HR executive’s ability to generate powerful relationships (of course, these four factors apply to everyone else, too). They are: Trust, direction, communication, and commitment.

Trust. The first concern every business owner or executive should be to surround themselves with people they can trust. What makes a person trustworthy is the fact that they can do something and have a desire to do so because they have the skills, training, and experience.

One way to become a trustworthy human resource executive is to become a PHR or SPHR. Another way is to be a constant learner: Turn off the TV and pick up a book, or read one of the many reports on HR That Works. Desire motivates the successful HR person to get things done – new things, not just familiar ones.

Direction. Superstars have a clear sense of their direction, vision, mission, values, goals, and plans. Unfortunately, as Mary Kay was famous for saying, “Most people plan their vacations better than their careers.” Just how good do you want to be? What do you have to do to get there? Have you mapped out a plan to get you there step by step? Is your plan in alignment with the greater needs of the organization? Have you had this conversation with your boss or the owner?

Then, give yourself benchmarks to determine how you’re doing. How would you know if you were on course? What results must you achieve, and by when? Break these benchmarks down into a clear plan for the week. What are your typical recurring tasks, and when will you perform them? What value-added tasks will you accomplish this week? When? How long will they take? At the end of the week, evaluate how you did, make adjustments, and set your plan for the next week.

Remember, successful executives have a clear sense of direction. As Napoleon Hill stated in Think and Grow Rich, “They have a burning desire for a particular purpose.”

Communication. One of the top challenges in any relationship involves communication, including how you talk with yourself. To be a good communicator is an inside-out job. What’s your daily “self-talk”? One business school study found that 80% of self-talk is about what we want to have that we don’t, or who we want to be that we’re not. What an incredible waste of time!

Instead, look to the Scriptures. For more than 2,000 years, the 23rd Psalm has reminded us that we “shall not want.” Focus on your gifts: Your intelligence and drive, the people around you, your clients, the fact that people need your work, and so forth. When my self-talk focuses on glorifying what I’ve been given, life becomes far richer both emotionally and financially. That’s good self-talk.

What’s the value of your communication with others? If I asked your significant other, BFF, or a colleague what you could do to communicate more effectively, and then asked you to guess what they said, you’d be fairly accurate. Most of us know what we can do to become better communicators. For one thing, we can listen more closely. This requires us to be present and stop running for a moment so that we can focus on the other person. Try this for five minutes. You’ll be amazed by how others respond to it.

Next, focus on making more positive deposits than negative ones. The authors of the excellent book Leadership and Self-Deception point out that most people deceive themselves into believing that they do more positive communication than negative. This is a natural by-product of running 75 miles per hour. Ask yourself this: When you’re running 75mph and someone’s trying to talk to you, how does it feel to them? Does it feel like a positive experience? Does it feel like you care? Probably not. This is why, although you might have good intentions, your outcomes might not be good. Finally, focus on creating a positive experience in your relations with others by making them feel good about themselves – finding the good that’s in them. Then you might even laugh together.

Commitment. Successful executives are committed. Good old Zig Ziglar provided me with a favorite quote about commitment: “Commitment is doing those things you said you were going to do long after the mood you said them in has worn off.” How committed are you? You might get the things I’ve stated above, but are you committed to delivering on them? Think in terms of rainy day commitments. Successful people commit to getting things done even when it doesn’t feel good to do them. “Sunshine commitment” is always easy. Our personal culture shows up when things feel unfair, not when everything is nice and sunny.

If it feels unfair that your success isn’t coming fast enough, consider the “flywheel effect.” As Jim Collins states in Good to Great, success doesn’t happen overnight. Like a flywheel, it takes some time to kick in. Then you’ll wonder what took it so long. Commitment requires a balance between urgency and patience. Because nothing happens without people taking action, we need a sense of urgency. At the same time, like a Zen master, we have to allow things to unfold as they are – not necessarily as we wanted them to be. I can tell you from personal experience that if you remain committed to something long enough, you will achieve success — just not when or how you expected it!

So, let’s sum up. If you’re in the HR role, what makes you trustworthy to your superiors? They can trust you with payroll and benefits administration, but can they also trust you to think strategically in a way that helps grow the bottom line? Do you have a written plan for this, with short and long-term goals, and specific benchmarks? Just how good do you want to be? What expectations do you have of yourself? How well do you work with others? Do you play team? Are you a pleasure to work with? Do you give as much as you take? Are you capable of being present and in the now, if even for short periods? Just how strong is your commitment? How would your superiors know this without you saying anything about it? What actions would they expect to see? What bridges are you willing to burn and what are you willing to stop doing as part of this commitment?

Here’s hoping that this either confirms the path you’re on and helps to reinforce it, or alternatively, serves as the good swift kick you might need. Success is a choice. Every one of these strategies should inherently feel right. Apply them toward your success.

The Disability Interactive Process

The law requires that employer and employee engage in an interactive dialogue concerning accommodating a disability. This process includes these issues:

1. The employee’s limitations.
2. The nature and requirements of the job.
3. Identification of essential job functions versus marginal ones.
4. Modification of the job to meet the employee’s limitations.
5. Distribution of certain duties to other employees or dispensing with them entirely.
6. The employer’s record of requiring jobholders to perform certain disputed duties.
7. Possible undue hardship on the employer from granting certain accommodations.
8. Provision of an alternative vacant position for which the employee is qualified.

The courts have been quick to recognize that much of the data is in the employee’s hands when it comes to their disability and in the employer’s hands when it comes to possible accommodations. Remember, the side that gives up on the accommodation dialogue first generally loses.

For accommodation support, go to the Job Accommodation Network website or contact the HR That Works Hotline.

‘Got A Minute?’

One of the most difficult challenges managers or executives face is having their days ruled by “got-a-minutes.” The executive or manager is usually more proficient or knowledgeable about a certain subject, which makes it tempting for employees to avoid taking personal responsibility for finding an answer and going to an “easy” source. All too often, this source is you. Answering a “got-a-minute” is like throwing that employee a fish: It disrupts your concentration and prevents them from learning how to fish.

To help avoid interruptions to your days by “got-a-minutes?,” tell your subordinates that you’re willing to give everyone at least five minutes between 4:00 and 4:30 to discuss any issues that are semi-urgent in nature, leaving less serious issues for the regular weekly meeting. The only immediate “got-a-minute” questions permitted will be those rated as “emergency issues” (9 or above on a scale of 10). Work with your team to define these issues. Let employees voice their concerns and reach a consensus. Agree that you too will refrain from throwing “got-a-minutes” their way.

This approach should eliminate more than 80% of the trivial “got-a-minutes” that knock you off course. Moreover, during these 4:00 meetings, employees will be more focused on their requests. Let them know that if they think the matter will take more than five minutes they should be prepared and perhaps even use an outline. Encourage them to tell you what efforts they’ve made to deal with the issue and where they’re “stuck.” Perhaps all they need is permission to move forward.

Empower employees to figure things out for themselves. If your time is worth $100 an hour and theirs is worth $20 an hour, let them take a few hours to figure out the answer for themselves.

Wage & Hour Insights: Salary Deductions for Exempt Employees

If you missed the webinar, “Are You Ready for a Wage & Hour Audit?,” a recording is available in the HR That Works Webinar area or Media Library. During and following the webinar, the presenters received numerous questions about wage and hour law issues — unfortunately many more than they could respond to during the program.

Here’s a response to two questions about deductions from the salary of exempt employees:

Q. When an exempt employee runs out of sick pay, can an employer deduct one day’s pay for the sick day?
A. Yes. Generally, you must pay exempt employees on a “salary basis,” meaning that they must receive a guaranteed salary for each workweek, without any reduction due to the number of hours worked or the quality or quantity of work performed. However, deductions are allowed in certain limited circumstances, such as the absence of an exempt employee for one or more full workdays due to personal reasons other than sickness or disability, or illness or an accident for an employee covered under a sick-pay policy. If an exempt employee uses up all of their sick days under the sick leave policy, you may still take deductions for any further full-day absences.

Q. Can we allow exempt employees to take sick or vacation time off by the hour or in half-day increments?
A. Yes. However, once an exempt employee exhausts available sick leave, you can only take deductions for any future absences if the employee is absent for a full day, unless the absence is for intermittent or reduced-schedule FMLA leave. Watch the FMLA Webinar for more practical insights on intermittent FMLA leave.

Most Employers Fail FLSA Compliance

According to the Department of Labor, more than four in five employers don’t comply with wage and hour requirements. Furthermore, wage and hour class actions (referred to as “collective actions”), outnumber all other employment class action lawsuits combined. Yet for employers, wage and hour compliance too often fails to receive the same priority as concerns about workplace harassment and discrimination. Employers know that problem prevention and management training reduce the risk of employment claims and help achieve a favorable outcome if claims arise. Let’s discuss such an approach concerning wage and hour requirements.

If there’s a single issue that every employee has in common and one question that most employees raise at least once a year, it has something to do with pay. Yet, many employers state that pay should not be discussed, which usually intends to cover confidential salary information. However, a by-product of this culture might be that employees don’t raise concerns about pay within the organization but instead, go directly to a plaintiff’s attorney or the Department of Labor. Note that unlike other employment claims, there is no legal requirement that an employee file a complaint with the Department of Labor; he or she may proceed directly to court.

Wage and hour claims often involve multiple individuals and can quickly add up to a lot of money. For example, if an employer is inappropriately docking an employee for a break, chances are this employer is doing the same thing with several other employees. Multiply that by the three-year “look-back” period for wage and hour violations, by the number of hours of the violation, and the number of employees involved. Then double this total and add interest and attorneys’ fees, and it won’t take long before the employer faces a six-figure risk.

So what to do about this? As a threshold recommendation, we suggest that you elevate pay issues to the same level of culture, compliance, and concern as workplace harassment and discrimination. Provide employees with what the DOL refers to as a “safe harbor” policy, employer pay practices, which practices are prohibited, and directs employees to whom within the organization to ask about pay. The objective should be that no employee ever needs to take a question about pay to anyone outside of the organization. For a copy of our Model Safe Harbor Policy, please click here.

Employers should also audit their wage and hour practices thoroughly on an annual basis. Are exempt employees classified properly? Are independent contractors bona fide independent contractors (in business to make a profit), or are they misclassified? Do you provide breaks, for how long, and with or without pay? If your organization pays an incentive, do you calculate this incentive in determining an employee’s overtime compensation? If an employee’s pay may be docked, is this in writing and applied consistently?

Article courtesy of Worklaw® Network firm Lehr Middlebrooks Vreeland.

What Documents Should an Employee’s Personnel File Not Include?

Employee personnel files contain documents that track the “vital statistics” of employment, such as new hire paperwork, background check records, handbook receipts, payroll withholding and benefits election forms, and disciplinary and performance related documents. However, these files should not include certain types of records:

• Documents that reflect medical information should go in separate files in order to comply with the privacy provisions of the Americans with Disabilities Act. The Genetic Information and Nondisclosure Act also requires that information about an employee’s genetic makeup be treated as private (family medical history might reflect such information and must be treated accordingly). Self-insured employers are also subject to the privacy rules of the Health Insurance Portability and Accountability Act.
• Records of investigations of complaints – Witness statements, employee complaint forms, investigative notes, etc. Keeping these in personnel files means that an employee’s request to review his/her file will require you either to disclose witness statements that might have been taken in confidence or remove them from the file, which could create questions of integrity.
• I-9 forms and the associated backup records. Keep these in a separate file to ensure that if the company undergoes an audit, it will not have to provide an investigator with access to entire employee personnel files (or, alternatively, require HR staff to cull through personnel files to retrieve all I-9s).
• Employee EEO-1 or other government required self-identification forms that reveal race, national origin, and gender.
• Other sensitive information, including e-mails between company officials and legal counsel or notes of conversations with counsel, should never go into an employee’s personnel file. Otherwise, the company might unwittingly waive the attorney-client privilege when affording the employee access to his or her file (or producing it during litigation to the plaintiff’s attorney).

Article courtesy of Worklaw® Network firm Shawe Rosenthal.

For more information on record retention, check out the Form of the Month.

Distracted Driving

None of us can ignore the safety issue that distracted drivers present. The CDC and DOT are campaigning to reduce distracted driving. The federal government has a Web site devoted to this danger. How distracted are your employees – or you – behind the wheel?

Occupational Fraud and Abuse

A Report to the Nation on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners provides a wealth of valuable information for any company. According to the report:

• Organizations with fewer than 100 employees have a higher rate of fraud exposure to billing, check tampering, skimming, expense reimbursement, cash on hand, payroll, and larceny than their counterparts do. Conversely, employers with more than 100 employees have a greater exposure to corruption and non-cash theft. The most common anti-fraud controls include audits, codes of conduct, management review, hotlines, and training.
• Companies with 100 or more employees are almost twice as likely as smaller organizations to employ anti-fraud controls.
• It generally takes some time to detect fraud. Financial statement fraud had a median duration of 27 months. Check-tampering, expense reimbursement, billing, and payroll scams 24 months; corruption, cash on hand, skimming, and larceny 18 months.

The list of fraud examples is instructive:

1. Skimming a small percentage of cash payments or assets.
2. Accepting payment from a customer, failing to record the sale and instead pocketing the money.
3. Stealing cash and checks from daily receipts before they can be deposited into the bank.
4. Creating a shell company and billing employer for services not actually rendered.
5. Purchasing personal items and submitting invoices to employer for payment.
6. Filing fraudulent expense reports for personal travel, nonexistent meals, etc.
7. Stealing blank company checks, and making them out to themselves or an accomplice.
8. Stealing outgoing checks to a vendor and depositing them into their own account.
9. Claiming overtime for hours not worked.
10. Adding ghost employees to the payroll.
11. Fraudulently voiding a cash register sale and stealing the cash.
12. Stealing inventory from a warehouse or storeroom.
13. Stealing or misusing confidential customer financial information.

Nearly one in five frauds were exposed by tips from fellow workers. Many organizations provide employee-tip hotlines. Perhaps you should too.

Click here to read the report.

Form of the Month

Personnel Record Retention Checklist (PDF)

This form provides guidelines on record retention. Remember to keep medical records and investigation records separately.

Podcast

Click here to listen to this month’s newsletter podcast.

“Be always at war with your vices, at peace with your neighbors, and let each new year find you a better man.” – Benjamin Franklin

This issue discusses:

• Editor’s Column: Big Time Liability for Small Company Harassers
• How Well is HR Doing?
• Three’s a Crowd, or Don’t Overload the Brain
• How Does Your State OSHA Plan Rate?
• Busted!
• Sexual Harassment and Young Workers
• Work is Hell
• Beware of FLSA Violations!
• Designing Your Office Environment
• OSHA Targets “Texting While Driving” on Company Business
• Future Risks
• Would You Be Prepared for an EEO Audit?
• Discrimination Claims Keep Coming
• Getting the Accommodation Right
• The Broad Scope of Retaliation
• Accommodation Ideas: Common Sense, Low Cost common Sense, Low Cost
• Career Ladders
• Tips on Communicating with Coworkers about Disability and Accommodations

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Big Time Liability for Small Company Harassers

In a case brought by the EEOC against the Fairbrook Medical Clinic, the plaintiff, Dr. Deborah Waechter, alleged four years of harassment by the sole owner of the family medical center in Hickory, NC. Apparently, the owner created a hostile work environment by routinely making vulgar and sexually explicit comments, repeatedly showing an X-ray of his torso; discussing his sex life, and telling Dr. Waechter’s patients that they could follow up with her when she “return[ed] from screwing.” There were also stupid comments about her breasts, and other rude behavior.

Interestingly, the company tried to defend itself by claiming that because the doctor was a jerk of a boss to all of his employees he didn’t discriminate against any of them.

However, most courts don’t buy this argument, especially if it involves gender-specific comments. The court held that even though the defendant was the plaintiff’s immediate supervisor and sole owner of the clinic, the HR manager and the office manager should have investigated the alleged misconduct. (In the real world, how can you punish your boss?)

My two cents: It’s important for business owners to understand that no matter the size of their company, they can face discrimination and sexual harassment claims at any time. Protect your business against any possible claim by making sure that you have EPL insurance.

On the other hand, I wonder why this professional woman continued to work in an environment where she was not treated properly for four years. The last time I looked, it was called work, not jail. Did she attempt to send out her resume during this time? Was she afraid that her skill set wasn’t good enough to get a job elsewhere? There’s a responsibility on her part, too.

A man once told me that his boss discriminated racially against him for three years. When I asked if he ever took his resume for a spin, he told me he had not. When I asked why he put up with the discriminatory conduct for as long as he did, he stated that “I didn’t want to leave the company because I loved playing on their softball team.” That’s how ridiculous some of these stories can get.

Click here to read the case.

How Well is HR Doing?

Measuring HR success isn’t easy. You can and should run your HR figures on the HR That Works Cost Calculator, a tool that will probably show the variance in your HR practices to be at least 10% of payroll. So, if you have $1 million in payroll, the variance will be at least $100,000. That’s one way of looking at HR dollars. Another approach is to determine “HR costs per employee.” These costs might include compensation, benefits, recruitment costs, outsourcing costs, as well as office space and equipment. Many companies will look at revenue per employee. Although this is certainly important, it also includes many variables that have nothing to do with HR effectiveness. For example, in a poor economy, revenue per employee will initially go down and then after cost-cutting, layoffs, etc., might well rise past previous levels. Consider what happened during the recent recession. Ultimately, the question remains, what information are you seeking and what will you to do with it? HR That Works members should review the Benchmarking Worksheet to generate some ideas.

Three’s a Crowd, or Don’t Overload the Brain

An article in the September/October 2010 Scientific American Mind discussed research that explains why multitasking doesn’t work. When test subjects had to deal with two activities, the brain divided the work between each hemisphere. The study explained this is precisely why people are notoriously poor at doing three or more things at a time. “After two tasks, we run out of hemispheres.”

How Does Your State OSHA Plan Rate?

OSHA conducts an annual evaluation of the 27 approved State Plan States each fiscal year. See how your state stacks up here.

Busted!

A survey by Men’s Health magazine, asked 20 corporate bosses (including the likes of Mark Cuban, owner of the Dallas Mavericks) to rank which employee time-wasters upset them the most. Number one was “clicking out of a screen just as I walk by” (71.6%). When an employee did this to me, I chose not to confront him because I wanted to trust him. Stooopid! Turns out he was running his own business on my dime and failed to deposit required tax payments, which was part of his job. I should have addressed his actions immediately and placed monitoring software on his computer. Keeping employees honest is even harder when they’re on their iPhone or other smart-phone, rather than your computer. How can you monitor this? In fact, controlling today’s worker is a struggle you can’t and don’t want to “win.” The only alternative is to invite them into the conversation, set reasonable expectations, and create a culture of excellence in which employees police each other. Also, make sure that a third party is double-checking your books!

Sexual Harassment and Young Workers

We’re seeing more teenagers than ever reporting sexual harassment cases. In New York State, a telemarketing company had to pay more than $500,000 in damages and interest to satisfy a claim brought by 13 women, most of whom were teenagers. The managers made numerous sexual jokes and remarks and, on occasion, promised a raise in return for sexual acts.

Because the company was an “affiliate franchise,” the franchisor argued that the affiliate was not part of the company. The Second U.S. Court of Appeals rejected this argument and affirmed the jury verdict, including an award of punitive damages.

Lesson to learn: Have managers and employees trained in sexual harassment issues and make sure they know where and how to complain. You might go one step further and distribute the Employee Compliance Survey.

What’s more, franchisors that traditionally have stayed away from employee relations to avoid “co-employment” liability will have to offer their franchisees HR training. This is both a legal and a competitive issue.

Work is Hell

I’ve noticed a rash of victimization hitting center stage. Business Week recently ran a long article about workplace bullying. The Obama administration has become adept at finding workplace victims like never before. How is a business owner or manager supposed to deal with all of this? Don’t let employees play victim on you! Challenge them to participate and come up with solutions to known problems. Allow them to become directly responsible for what they can control. It’s hard to cause problems when you’re responsible for making things happen. Nobody has time for emotional nonsense at great companies.

Beware of FLSA Violations!

Have you audited your practices for these common wage and hour exposures?

1. Exempt vs. non-exempt. Have you classified your exempt employees properly or are you risking an overtime exposure?
2. Rest and meal period violations. Is the employee truly relieved from work and are your time-keeping clocks tracking meals accurately?
3. Travel time. Many workers who start from their home and then go to multiple locations fall under “portal-to-portal laws.”
4. 1099 misclassification. As indicated on the blog site, www.1099timebomb.com, this is a significant exposure. The IRS and state agencies are looking to find as many people as they can who are classified as employees.
5. Failure to pay prevailing wage. If you’re working a government or quasi-government project, make sure you’re complying with all wage requirements.

Designing Your Office Environment

An article in the September/October 2010 Scientific American Mind discussed why some office spaces alienate office workers, while others make them happier and more efficient.

The bottom line: Let your employees have input in “decorating” their environment. According to survey responses, giving workers a say in the physical aspects of their workspace reduced the negative effects of noise and distractions. The article also warned employers that efforts at making “hangout rooms,” etc. will fail if you don’t include employees in designing these environments.

OSHA Targets “Texting While Driving” on Company Business

A recent OSHA press release advised companies that an employer who requires employees to text while driving or organizes work so that “texting is a practical necessity” are violating the Occupational Safety and Health Act. In its news release, OSHA further states that it will investigate complaints about these practices promptly and if it concludes that an employer has compelled employees to text while driving, issue citations and penalties to end the practice. OSHA explains that employers have the “responsibility and legal obligation to create and maintain a safe and healthful workplace” – and this includes having a clear, unequivocal, and enforced policy against the hazard of texting while driving. Companies are violating the Occupational Safety and Health Act if, by policy or practice, they require texting while driving, create incentives that encourage or condone this, or they structure work so that texting is a practical necessity for workers to carry out their job. Employers who have not already done so should set a policy on the use of electronic devices while driving and make sure employees understand that texting while driving is prohibited.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com). 

Future Risks

In a Business Week interview, Vinay Mistry of AON stated that the company’s management team covers more than 370 risks, from nanotechnology through climate change. They have designed and implemented realistic disaster scenarios for the top 20 exposures, from hurricanes to plane crashes and earthquakes.

The emerging risk areas discussed included synthetic biology, digital risk and cybercrime, “space risk,” which is based on the impact the solar cycle has on satellites, as well as the impact of climate change.
What can we learn from this? First, identify the dozens of risk exposures that apply to your company. Work with your insurance broker and legal counsel to make sure you do this the right way. Then focus on the most likely scenarios and have a plan for preventing and dealing with each of them. The risk exposures your company faces are both insurable and non-insurable and include, but are not limited to:

• IT systems and their ability to handle hurricanes, power outages, hacking attempts, etc.
• Employment Practice Liability exposures
• Errors and omissions exposures
• Health and safety exposures
• Work Comp exposures
• Product Liability
• Environmental liabilities
• Rapid loss of clientele
• Poor vendor or supplier relations
• Economic pressures, including diminished markets
• Exposure to competition, including offshore activity
• Financial exposures lacking proper checks and balances
• Lack of available capital
• Cyber-liability and social media exposures
• Turnover and morale problems

This is, of course, a short list that applies to most companies. If you’re an HR That Works member, take comfort in knowing that we can help you with your HR risks!

Would You Be Prepared for an EEO Audit?

Click here to see a typical request from an EEOC office when investigating a claim of discrimination. To what degree would you be able to comply with, or fear such a request? Just looking at the amount of information requested can make your head spin.

P.S. If you ever get such a request, contact your employment law attorney and insurance company immediately!

Discrimination Claims Keep Coming

An EEOC press release has announced an increase in discrimination claims in FY 2010. This comes as no surprise, given record unemployment rates, and the fact the commission invites more claims than ever and has expanded its jurisdiction. Here’s the point: Be prepared! Have the right policies and procedures, basic training for managers and rank and file, Employment Practices Liability Insurance (ask your broker about EPLI), and legal support when you need it. The HR That Works program provides all of these tools.

Getting the Accommodation Right

Dept. Fair Empl. & Hous. v. Avis Budget Group (Reed)

Complainant Eleanor Reed was a customer service representative for Avis Budget Group (Avis) at its San Francisco Airport location. In June 2006, she requested a reasonable accommodation of a six-hour shift for her mental disability (post-traumatic stress disorder). She previously had been granted the accommodation without any problems, and had succeeded in performing her essential functions with the accommodation. Avis decided to place her on unpaid leave and thereafter requested medical documentation. Reed provided the documentation requested, including the diagnosis, the reasons for the accommodation, and why it would allow her to perform the essential functions of the job. However, she refused to agree to a blanket release of her medical records, including several years of psychiatric records that detailed decades of sexual and other physical and mental domestic abuse, or to provide unfettered access to her treating psychiatrist.

Avis decided that the doctor’s documentation was inadequate, and requested that she provide the full medical records release and access to her doctor or submit to the company’s physician for evaluation. Avis did not engage with Reed about the purported inadequacies or give her an opportunity to augment the doctor’s information to support the request for accommodation. Approximately five months after placing Reed on unpaid leave, Avis finally obtained an independent medical opinion that agreed with the opinion of her doctor. Even though it provided no further information as to the reason for the accommodation, Avis finally accepted the opinion and agreed to grant an accommodation. However, it looked at its “seasonal” need and placed Reed on a severely reduced work schedule that removed her from eligibility to bump another employee with less seniority when Avis laid off four employees, including Reed, the following month.

The Fair Employment and Housing Commission ruled in favor of the Department and against Avis for unlawful inquiries about the employee’s disabilities, failure to engage in the interactive process, denial of reasonable accommodation, and failure to take all reasonable steps necessary to prevent discrimination. The Commission ordered an award of $89,863.70 ($14,863.70 in back pay and $50,000 in emotional distress damages to Reed; and $25,000 in an administrative fine to the General Fund), plus affirmative relief of postings and training for management personnel on reasonable accommodation.
Lessons to learn:

1. Limit the medical information you request or receive to that which relates directly to the accommodation issue. Asking for anything more only invites problems.
2. Never, ever, give up on the accommodation dialogue. Whoever quits first loses.
3. Make sure not to “penalize” someone who has requested an accommodation.
4. Realize that there is often “something else” going on with a person that’s none of your business! Focus on their productivity and disability, not the cause of their disability.

Click here to read the case.

The Broad Scope of Retaliation

In Smith v. Hy-Vee, Inc., Drew Smith brought sexual harassment and retaliation claims due to conduct caused by Sheri Lynch, a tech cake decorator, who engaged in rude, vulgar, and sexually charged behavior toward Smith, and apparently all the other employees. The court stated that since Lynch did not seem to be “sexually motivated” toward Smith or any of the other employees, but simply out of control with all of them, there was no sexual harassment. (Many courts or juries will conclude otherwise – see the “Editor’s Column” in this newsletter.) The issue in the case, however, was whether or not Smith had a reasonable belief that it was against the law and if the company retaliated against her because of her complaints. The court ruled that because she had to show the “good faith” nature of her belief, the facts from the underlying claim would be admissible at the retaliation trial. (What lawyers call having to “try a case within the case.”)

This case carries two lessons for employers:

1. If the crazy facts in this case are even slightly true, how did an employee like Sheri Lynch stay employed at Hy-Vee? Smith stated she reported incidents of harassment to at least 12 different managers and co-workers, making 66 to 101 complaints to management. Interestingly, Hy-Vee denies Smith ever complained. The company claimed that there were a number of incidents in which Smith herself did not act appropriately or questioned the authority of supervisors. She was also written up for making mistakes in cake and bagel orders during her final weeks of employment.
2. Although rude, vulgar, and obnoxious bosses might not end up generating a harassment or discrimination claim, they easily can trigger a legitimate retaliation case and expensive litigation. (Think about it — thousands of dollars in lawyers’ fees over cakes and bagels.) Remember that when employees bring these underlying complaints, they don’t have to use magic words like “harassment,” “discrimination,” or “retaliation” in order to trigger protection.

Accommodation Ideas: Common Sense, Low Cost

Here’s a list of inexpensive accommodation examples published by the Job Accommodation Network (JAN):

Situation: A production worker with mental retardation, who has limited fine motor dexterity, must use tweezers and a magnifying glass to perform the job. The worker had difficulty holding the tweezers.
Solution: Purchase giant tweezers. Cost: $5.

Situation: A teacher with bipolar disorder, who works in a home-based instruction program, experienced reduced concentration, short-term memory loss, and task sequencing problems.
Solution: At one of their weekly meetings, the employee and the supervisor jointly developed a checklist that showed activities for both the week’s work and the following. The company adapted forms so that they would be easy to complete, and developed structured steps so that paper work could be completed at the end of each teaching session. An unintended bonus to the company was the value of the weekly check-off forms in training new staff. Cost: $0.

Situation: A garage mechanic with epilepsy was unable to drive vehicles.
Solution: The employer negotiated with the employee’s union and reached an agreement that any qualified employee, regardless of job held, could drive the vehicles to the mechanic’s work station. Cost: $0.

Situation: An individual with a neck injury, who worked in a lab, had difficulty bending his neck to use the microscope.
Solution: Attach a periscope to the microscope. Cost: $2,400.

Situation: A catalog salesperson with a spinal cord injury had problems using the catalog, due to difficulty with finger dexterity.
Solution: The employer purchased a motorized catalog rack, controlled by a single switch via the mouth stick, and provided an angled computer keyboard stand for better accessibility. Cost: $1,500.

Situation: A field geologist who was deaf and worked alone in remote areas was unable to use two-way radio communication to report his findings.
Solution: The company installed text telephone technology which allowed the geologist to communicate using a cellular telephone. Cost: $400 plus monthly service fee for the phone.

Situation: A saw operator with a learning disability had difficulty measuring to the fraction of an inch.
Solution: The company gave the employee a wallet-sized card that listed the fractions on an enlarged picture of an inch. This allowed the employee to compare the card with the location on the ruler to identify the correct fraction. Cost: $5.

Situation: An accountant with HIV was experiencing sensitivity to fluorescent light, which kept her from seeing her computer screen or written materials clearly.
Solution: The employer lowered the wattage in overhead lights, provided task lighting and a computer screen glare guard. Cost: $80.

Situation: A custodian with poor vision was having difficulty seeing the carpeted area he was vacuuming.
Solution: The company mounted a fluorescent lighting system on his industrial vacuum cleaner. Cost: $240

Here’s the point: Accommodations don’t have to be expensive. Remember to engage in a true dialogue involving the employee, his or her physician, and any support you might need from the HR That Works hotline, Job Accommodation Network, or your own attorney.

Career Ladders

According to a nationwide Gallup survey on the reasons for turnover, the second-leading reason for losing employees was lack of a career path (i.e., I’m OK today, but where’s my future in this job?). The DOL has done an excellent job of creating a tool that can create competency models for different careers, as well as supporting career ladders or lattices. You can use these resources (click here) for recruitment and hiring purposes as well as career planning. We also provide a number of career ladders created by the South Florida Manufacturers Association, which you can use as templates for any job. You’ll find them at the end of the hiring forms in HR That Works.

Tips on Communicating with Coworkers about Disability and Accommodations

The Americans with Disabilities Act (ADA) prohibits employers from telling coworkers anything about an employee’s disability, including the fact that an employee is receiving an accommodation. However, in some cases, the employee might want to educate coworkers voluntarily about the disability and accommodation, especially if their coworkers are going to notice the accommodation anyway. For example, if an employee with a disability is using a service dog at work, it might be useful to educate coworkers about service dogs. Or, suppose an employee has severe allergies and needs to avoid inadvertent exposure at work. Here are some general guidelines for employees with disabilities communicating information about their disability and accommodation to their fellow workers:

• Keep the conversation work related.
• Let coworkers know why you’re telling them about your disability.
• Don’t assume that they know anything about your disability; be prepared to provide general information if relevant.
• Let coworkers know what you need from them and why you need it.
• Explain to them what accommodations you’ll need and how they will help you perform your job.
• Be positive and open, but limit the information you provide to the amount that you’re comfortable sharing.

- Linda Carter Batiste, J.D., Principal Consultant, Job Accommodation Network (JAN)

Form of the Month

ADA Compliance Flowchart (PDF) – This tool helps identify the step-by-step process to follow when managing an ADA accommodation.

Podcast

Click here to listen to this month’s newsletter podcast.

“The closest to perfection a person ever comes is when he fills out an employment application.” – Stanley J. Randall

This issue discusses:

• Editor’s Column: Suicide Nets
• Opposing Unemployment Claims: Managers, Beware
• AARP Helps Employers With Older Workers
• Five Year Plan for the Workplace
• Alliances That Make Employers Nervous
• Criminal Records: No Employer Policy, No Employee Claim
• Mini-Medical Plans May be Eligible for Exemption
• Religious Expression and Workplace Harassment
• Stupid E-Mail Tricks
• Auto-Forwarding Employee E-Mails Presents Risk

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Suicide Nets

I read an interesting but disturbing article in Business Week magazine that talked about Foxconn, the world’s largest manufacturer of electronic components. What was startling was the picture of suicide nets hung outside its company dormitories. Apparently, 12 workers have leapt to their deaths within the past year.

When we see pictures of assembly factories and hear stories about suicide nets, it’s easy for us to point fingers at the Chinese and their inhumanity toward the working masses. However, the U.S. underwent a similar revolution 100 years ago. I can show you pictures of injured children who worked in factories 12 hours a day, six days a week. If they were injured, they were fired. There was no medical coverage or Workers’ Comp. We also went through an incredible labor/management struggle, which continues to this day. You can bet that China will go through its labor struggles as well. Fortunately, and perhaps in part due to global pressure, Foxconn has raised salaries and benefits.

Experts attribute the high suicide rate to repetitive stressful work environments and detachment from the familiar—whether it’s friends, family, or countryside. There’s a deep sense of isolation despite the sea of humanity—a disconnect, if you will.

Let me ask you a question: Isn’t that the condition here as well? Many of us remain equally chained to our desks or cubicles, even if they’re larger or have a better view. Americans work insane hours. In a study we did of HR That Works members, most respondents take fewer than two weeks of vacation per year. At least China mandates two weeks of vacation a year. In France, it’s eight weeks, and in England six weeks.

Where are the safety nets at your company? Is it the EAP? Is it a wellness program? Is it incredible support and flexibility? How do we keep ourselves and the people we work with sane when we’re all running 75 mph? That’s the question, whether you’re in the U.S., Russia, China, Pakistan, or Brazil. How do you make sense of this thing we label as “work” in a way that nurtures us instead of tearing us down?

As with the immigrants who came to the U.S. and continue to do so, the Chinese who immigrate to their cities will reconnect and form associations, special interest groups, sporting teams, non-profit organizations, and find other ways to build their community.

Perhaps our greatest export will be helping emerging economies accelerate through struggles that took us dozens of years to resolve. Workplace struggles surrounding access to work, pay, safety, and the sharing of power will continue to affect today’s workplace, both here and abroad.

Opposing Unemployment Claims: Managers, Beware

Many employers misunderstand the standard unemployment claims. The bottom line: Even a claimant who has performed horribly on the job is eligible for unemployment benefits, unless they leave under these circumstances:

• Voluntary departure without good cause.
• Discharge for misconduct connected with their work.
• An irresistible compulsion to use or consume drugs, including alcoholic beverages.
• Return to school (for students employed temporarily).
• Joining a spouse or domestic partner at a place from which it’s impractical to commute to employment, to which a transfer of the claimant by the employer is not available.
• Protection of the employee or their family from domestic violence abuse.

If you decide to oppose an unemployment claim, it makes sense to get help from an expert in this area.

AARP Helps Employers With Older Workers

The changing demographics of the workforce have gathered much attention. The AARP has done an excellent job of providing insight and tools for employers to help manage the older-than-50 workforce. Click here to view this information. The older workforce will be with us for some time. The proper “retirement age” has been a source of intense debate, due to its impact on the ability to fund pensions and Social Security. The combination of low birth rates and rising life expectancy will transform the demographics of the workplace.

Five Year Plan for the Workplace

The Secretary of Labor has issued “The Strategic Plan” for fiscal years through 2016. As you can see in the diagram, the essence of this plan consists of work-life balance, health care, income security, and advocacy – all noble goals. The challenge: Defining a context or meaning for these terms.

Here’s what The Plan states:

Strategies for Reforming Worker Protection

• Target the most egregious and persistent violators.
• Protect the most vulnerable populations while assuring broad-based compliance.
• Regulate to eliminate or reduce the hazards with the broadest and most serious consequences based on sound science.

Evaluation. Establish regular processes for evaluating the success of enforcement and regulatory strategies in helping achieve desired outcomes.

Innovation

• Foster a culture that emphasizes continuous improvement in regulatory and enforcement programs.
• Shift the burden of compliance to the employer or other regulated entity, rather than relying exclusively on enforcement interventions to eliminate “catch me if you can” regulation and enforcement.
• Emphasize organization-wide enforcement and other strategies for leveraging limited resources to accomplish the broadcast possible compliance.
• Use openness, transparency, and effective press and communications strategies to help ensure broad-based and continuing compliance.

Improved Implementation

• Implement collaborative enforcement strategies with other DOL, federal, state, and local agencies to leverage limited resources and ensure broad compliance in the entire workplace.
• Establish and maintain an effective partnership among worker protection agencies, the Solicitor’s Office, and the Policy Office in all aspects of regulation and enforcement.
• Impose penalties and other remedies which are consistent with the seriousness of the violation and act as effective deterrents, including identifying and aggressively pursuing appropriate cases for criminal prosecution.
• Partner with worker and community-based organizations to identify likely violations and educate workers, small businesses, and others about the law’s requirements.
• Involve workers and worker organizations in the workplace to prevent, identify, and remedy violations.
• Provide meaningful compliance assistance and engage the regulated community in designing and implementing compliance assistance.

Learn more on the DOL website.

Alliances That Make Employers Nervous

The U.S. Department of Labor’s Wage and Hour Division is holding a series of discussions with the National People’s Action Network (NPA). The goal is to explain worker rights and how to file a complaint against rights violations with the Labor Department. At a recent discussion in Rhode Island with the Fuerza Laboral organization, more than 100 workers and stakeholders spoke with Wage and Hour officials and garnered information on finding help when denied the wages they deserve.

According to the NPA Web site affiliates entered into a partnership with the US Department of Labor. DOL representatives in NPA affiliate states will attend field meetings to help local organizations expand their campaigns on Wage Theft, misclassification, and other labor violations.

Conclusion: These types of partnerships make business owners nervous. The Bush Administration was one of the most pro-employer on the books. Employers recognize that the pendulum has swung 180° in the opposite direction. The Department of Labor, EEOC, OSHA, and NLRB are in business to help employees – not employers. Whining about this won’t do any good. Engaging in sound HR risk management practices is the only thing that can or will work.

Criminal Records: No Employer Policy, No Employee Claim

The case of EEOC v. Conway Express, Inc. (8th Cir. September 26, 2010) involved an employer’s use of conviction records as a practice, but not a written policy. The EEOC sued on behalf of the charging party, Roberta Hollins, who claimed she was not hired based on her race. Hollins applied for a part-time position at the company’s Poplar Bluff, MO, office. The company’s service center manager, Kenneth Gaffney, interviewed her and recommended to his boss that the company hire her.

However, Gaffney’s boss expressed reservations about hiring her due to race. Gaffney told Hollins that if the company were to hire her, it would “open a can of worms” and “my boss told me not to hire you because if I hired you that was just asking for the NAACP.” This looks like a clear-cut case of racial discrimination, but that’s not how it turned out.

Answering a question on the employment application about prior convictions, Hollins wrote that she twice was convicted for shoplifting. Gaffney offered to employ Hollins, but failed to follow the company’s protocol, which involved obtaining approval from Human Resources before extending an offer. Gaffney was terminated and when Hollins told Gaffney’s supervisor about the employment offer, the supervisor said that he knew nothing about it and he would not hire her. The company hired a white male for the position, and stated that Hollins would not have been offered employment based on her prior convictions.

The EEOC argued that a jury should decide the question of whether Hollins was not hired based on her race because the employer’s background check policy was unwritten. The court ruled that it was irrelevant that the policy was unwritten. The company provided evidence that during the 18 months before Hollins applied, the company disqualified 28 applicants based on their criminal conviction history and no current employee had a criminal conviction. Said the court: “the [EEOC] argues that a reasonable jury could conclude that the policy did not exist because it was not in writing, but they do not cite any legal authority for the proposition that a policy must be in writing to be effective.”

The court got it right: An employer’s practice need not be in writing to be a bona fide, nondiscriminatory reason for an action taken.

Furthermore, although the manager’s supervisor expressed reservations about hiring Hollins because of her race, she would not have been hired anyway due to her conviction record – a factor that the employer applied consistently to applicants.

Article courtesy of Worklaw® Network firm Lehr Middlebrooks Vreeland. (www.lehrmiddlebrooks.com)

Mini-Medical Plans May be Eligible for Exemption from Health Care Reform Law

Employers offering limited health benefit plans (“mini-med” plans) can do so without modifying them to comply with the Affordable Care Act, provided they obtain a waiver from the Department of Health and Human Services (HHS).

Many of the companies who offer mini-med plans are applying for these exemptions on behalf of their customers.

The mini-med plan market, which by some estimates covers more than 3 million Americans, has been rocked by the requirements of the Affordable Care Act. Mini-med plans, which offer limited benefits but low deductibles and co-pays, have become a cost-effective way for employers with high turnover and low wage earners to provide their employees with basic health insurance. If mini-meds were forced to comply with the Affordable Care Act’s rules, including those that impose “minimum essential coverage” requirements or eliminate lifetime or annual caps on benefits, the entire market would dissolve, leaving 3 million Americans without even the most basic coverage.

As a result, mini-med plans have prevailed on HHS to grant them an exemption from the Affordable Care Act in order to protect basic coverage for their insureds. Employers must submit waiver applications at least 30 days before the beginning of the plan year for plans starting between September 23, 2010 and September 23, 2011. For calendar year plans, the deadline to apply for a waiver is December 1. Plans receiving a waiver must re-apply each year until the waiver program ends in 2014.

Any plan – not just mini-med plans — can apply for a waiver from the Affordable Care Act, provided they can show that:

• The plan covers both full-time and part-time workers.
• Without a waiver, premiums would rise so much that employers would drop the plan or workers would refuse to buy into them.

If you offer a min-med plan, contact your plan’s insurance carrier or your benefits broker to see if the plan has applied for or obtained an exemption. Note, however, that the exemptions are only a short-term fix. HHS will have some tough decisions to make about these plans when the exemption period ends in 2014. Ultimately, mini-meds might be the type of Health insurance coverage that dooms the Affordable Care Act’s requirement that all American citizens carry “minimum essential coverage” by 2014.

Article courtesy of Worklaw® Network firm Lehr Middlebrooks Vreeland. (www.lehrmiddlebrooks.com)

Religious Expression and Workplace Harassment

In Mitchell v. University Medical Center, Inc., the U.S. District Court for the Western District of Kentucky addressed a sensitive issue: The tension between an employer’s need to maintain a professional, harassment-free workplace and an employee’s right to voice her personal religious conviction on the job. The plaintiff, a staff nurse at the University Medical Center hospital, was a devout Christian. Based on her readings of the Bible, she believed that she had calculated the date for the end of the world or the coming of the Antichrist. She shared her calculations and revelations with co-workers. Several of her co-workers were uncomfortable with these conversations and reported them to a supervisor, who gave the plaintiff a verbal warning not to discuss religion at work or face discipline, up to and including termination. Upset about the meeting, the plaintiff resigned at the end of the day, and filed a religious discrimination claim against her employer.

The court decided in favor of the employer, ruling that although the plaintiff wanted the right to have religious conversations with co-workers, these conversations were offensive and troubling to them and violated the hospital’s harassment policies. The court noted that any accommodation of the plaintiff would necessarily infringe on the rights of other employees, and ruled that she could not establish a claim for disparate treatment because she failed to show that she received treatment different from that of other employees in similar situations. The Court reasoned that she was not treated differently because of her religion, but because of how her religious beliefs and actions affected others.

For guidelines on dealing with religious discrimination issues in the workplace, see the Form of the Month below.

Article courtesy of Worklaw® Network firm Shawe Rosenthal. (www.shawe.com)

Stupid E-Mail Tricks

An excellent article in the October 2010 Corporate Counsel magazine discussed mistakes executives continue to make using e-mail. The author offered these common-sense guidelines.

• Use company email accounts appropriately.
• Don’t e-mail inside jokes or nicknames for clients or employees.
• Don’t e-mail when angry.
• Don’t e-mail potential ammunition for opposing counsel.
• Avoid using such phrases as “Don’t tell them” or “They’ll never find out” in your e-mails.

This list is far from exhaustive. The article provides excellent job examples of how unwise e-mail conduct on the job has resulted in a significant exposure to the employer. Bear in mind that these guidelines also apply to using such social media as Facebook, LinkedIn, and YouTube. We encourage HR That Works users to examine our Electronic Use Policy, as well as the Social Media Policy.

Auto-Forwarding Employee E-Mails Presents Risk Under Federal Wiretap Act

Employers’ ability to monitor e-mails sent by employees at work is a hot topic being addressed by courts nationwide as privacy laws work to catch up with technology. In United States v. Szymuszkiewicz, the Seventh Circuit Court of Appeals provides a different perspective on this issue, finding that an IRS agent violated the Wiretap Act by secretly setting up his boss’s e-mail account to forward all received e-mail messages to his own account.

David Szymuszkiewicz worked as an IRS agent whose job required him to visit delinquent taxpayers’ homes. After losing his driver’s license for driving while drunk, he became concerned that he might lose his job and decided to secretly monitor all e-mails sent to his supervisor. The Wiretap Act makes it unlawful to “intercept” electronic communications. Szymuszkiewicz argued that he did not violate the Act because he did not intercept any communications during transmission as one might intercept a telephone call by tapping a phone line. The court rejected this argument, holding that an interception need not be contemporaneous and that Szymuskiewicz’s use of the auto-forward feature in Outlook met the statutory definition. The court also stated that its analysis applies equally to digitally transmitted telephone calls, which are sent in a manner similar to e-mail transmissions.

Although this decision offers a reason for caution, it does not mean that employers must abandon their existing communications policies. Courts have ruled that employers are not subject to liability under the Wiretap Act for monitoring employees suspected of violating company policy if the monitoring serves to protect the company’s “rights and property.” Employers also have a legitimate argument under the Act that they are not liable for monitoring employee communications if the monitoring occurs in connection with “an activity which is a necessary incident to the rendition of [the employer’s] service.”

Nevertheless, it’s wise to act carefully when monitoring employees’ electronic communications, because this area of the law is developing rapidly and the rules vary from jurisdiction to jurisdiction. Be sure to have up-to-date policies notifying employees that their communications may be stored, monitored and reviewed. You might also strongly consider requiring all employees to acknowledge such policies as a condition of employment.

Article courtesy of Worklaw® Network firm Franczek Radelet. (www.franczek.com)

Form of the Month

Religious Accommodation Flowchart (PDF)

This chart outlines the proper steps to take when considering a religious accommodation issue.

Podcast

Click here to listen to this month’s newsletter podcast.

“It is not enough to do your best; you must know what to do – and then do your best.” – W. Edwards Deming, Management Consultant and Educator

This issue discusses:

• Editor’s Column: High Touch
• Sprinkles v. Associated Indemnity Corp.
• So You Have a Great Idea…
• Employment Discrimination: The California Experience
• Take Note!
• Green HR
• Small Workplaces
• You Can Discriminate — But Only If You Have a BFOQ (Bona Fide Occupational Qualification)
• Abercrombie & Fitch Settles I-9 Paperwork Violations for More Than $1 Million
• Employment Law: Jury Awards, Trends, and Statistics
• Unwanted Transfer of Pregnant Employee Might Violate Title VII
• Acceding to Patient Racial Preferences Violates Title VII and ADA

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: High Touch

I read some interesting research in Scientific American on how touch affects how people feel. It turns out that “everything we think is somehow tied to the physical experiences we have.” These experiences fall into these categories: Weight, texture, and hardness. For example, weight itself implies that something is more important. People who simply held a heavier clipboard rated job candidates as better and more serious about a job. Similarly, people who handle rough textures before observing a social scene rated it as more harsh; and even sitting on a hard chair made people less likely to veer from an original offer in negotiating with a car dealer. Across the board, there was about a 25% difference in how people behaved when given something heavy, rough, or hard.

The researchers concluded that understanding these tactile effects presumably would give you the upper hand. So, can you use this understanding in management or sales? To begin with, if I wanted to have a prospect take something seriously, I would provide them with something heavy to hold on to or think about. I would have them sit in comfortable surroundings in a soft chair. Not all of this should come as a surprise. For example, I can remember shopping for a bed for the guest room. The salesman asked me if I wanted the guest to stay for two days, two weeks, or two months. He would sell me a bed with the right texture to assist in that outcome. So, think to yourself, “How can I make this heavier or lighter, rougher or smoother, harder or softer, depending on what I need under the circumstances?” If I’m trying to train a Marine, it’s going to be heavy, rough, and hard. If I’m coddling a baby, it’s going to be light, smooth, and soft.

We can create metaphors that will affect the way that people think about things. For example, if in your discussion, you say something like, “What kind of criteria do you use when you make a serious decision such as buying a car?” The prospect will take the situation more seriously. Other times you might want to talk about a smooth transition or a soft landing. Finally, studying neuro-linguistic programming (NLP) you learn that people are primarily auditory, visual, or kinesthetic. So, you might say something like, “Can you see the heaviness of the situation?” “Can you feel the weight of the situation?” or “Can you hear the gravity of the situation?” (Depending on which modality the person favors). Remember this: How we use language has a significant impact on how we are perceived and how we influence others.

Sprinkles v. Associated Indemnity Corp.

This is an important case for Workers’ Comp insurance brokers to understand. To make a long story short, the plaintiffs sued after Bibinz, an uninsured and undocumented worker with a lengthy criminal record, drove his vehicle negligently while under the influence of drugs, causing the death of a driver in another vehicle. The plaintiff alleged that Bibinz was acting as an agent of his employer, the Sinco property management company, because he was using his vehicle to drive to work, which required him to visit various properties managed by the company.

At the time of the accident, Sinco carried a Commercial Auto policy issued by General Insurance with a million-dollar limit, an Umbrella and Excess policy from Fireman’s Fund with a million-dollar limit, and a CGL policy issued by Fireman’s with a million-dollar limit. Plaintiffs partially settled the Sinco action, with General paying its million-dollar primary limit and Fireman’s Fund paying its excess million-dollar limit. However, the insurer denied coverage under the CGL policy.

The arbitrator awarded $27 million, finding that at the time of the accident, Bibinz was acting within the course and scope of his employment under the “required vehicle” exception under the “going and coming rule” and that Sinco had been negligent in hiring and retaining him. This case focused on Fireman’s Fund under the CGL policy for bad faith in failing to defend the suit or indemnify against it. The definition of insured under the CGL policy included employees, “but only for acts within the scope of their employment while performing duties related to the conduct of your business.” Unfortunately for the plaintiffs, the court did not buy the theoretical possibility that the actions of an employee might be within the actions of the course and scope of employment, but “not related” to the conduct of the business. It ruled that Bibinz’s use of his own vehicle required by Sinco was within the scope and course of the business, and that driving that vehicle to work was at least performing a duty “related” to the conduct of the business. Thus, he was an insured under the policy – as a result, the automobile exception applied.

So You Have a Great Idea…

You just might be lucky enough to hire or manage employees that want to help improve the company. How you handle their ideas greatly impacts the future of your relationship. Mishandle this conversation, and you’ll pay the price. Here are some approaches that won’t burn bridges:

• Sounds interesting; keep talking so I understand this better.
• Where did this idea take root? Anyone else involved? What got you to this point?
• How will this help the company meet its vision, mission, or goals?
• What assumptions are you making and how do they factor into your idea?
• Why are you so excited about it?
• If it worked the way you envision, what would it look like?
• If we were to pursue this idea further, what would be the next step?
• What needs to change if this is going to work?
• What impact can it have on the bottom line?
• I like it. How would you like to fill out this Great Idea Form so we can study the idea further?

Employment Discrimination: The California Experience

The DFEH has released a summary of the cases filed in 2008-2009. The breakout of claims is similar to those filed nationwide. As you can see, disability and retaliation claims are the two biggest areas of concern. The second tier of exposures includes age, race, and sexual harassment claims. Here’s the question: No matter where you are, are you using HR That Works proactively to help avoid these claims?

Take Note!

Medical Examinations. Requiring an employee to undergo a fitness for duty examination (FFDE) does not violate the Americans with Disabilities Act, if the employer has an objective, legitimate basis to doubt the employee’s ability to perform his or her duties. Under the ADA, an employer may require an employee to undergo medical testing only where the testing is job related and consistent with business necessity. In Brownfield v. City of Yakima, a police officer argued that the City violated the ADA by requiring an FFDE, after he had engaged in a number of emotional outbursts, without showing that his job performance had actually suffered due to any health problems. The Court disagreed, finding that requiring a “preemptive” medical examination may be permissible under the ADA. It cautioned, however, that the standard for establishing the validity of such a requirement is quite high – the employee’s behavior cannot be “merely annoying or inefficient to justify an examination; rather, there must be genuine reason to doubt whether that employee can perform job-related functions.” 

The court ruled that The City of Yakima had a legitimate basis to doubt the plaintiff’s ability to perform the duties of a police officer. In coming to its conclusion, it used these words, which everyone should remember:

“We agree … that prophylactic psychological examinations can sometimes satisfy the business necessity standard, particularly when the employee is engaged in dangerous work. However, we must be keen to guard against the potential for employer abuse of such exams … Employers are prohibited from using medical exams as a pretext to harass employees or to fish for non-work-related issues and the attendant ‘unwanted exposure of the employee’s disability’ and the stigma it may carry … An employee’s behavior cannot be merely annoying or ineffective to justify an examination; rather, there must be genuine reason to doubt whether that employee can perform job-related functions.”

This case reassures employers that sending an employee for a fitness for duty examination will not violate the ADA if the employer has a reasonable belief that the employee is not capable of performing his job. Of course, the ADA’s requirement that a medical examination be consistent with business necessity is an objective one and the employer bears the burden of demonstrating this business necessity.

Religious Accommodation. The U.S. Court of Appeals for the Third Circuit held that a prison that prohibited female Muslim employees from wearing religious head coverings called khimars did not violate Title VII’s religious accommodation obligations. Under Title VII, an employer must provide accommodation for an employee’s religious beliefs and needs unless the accommodation would pose an undue burden to the employer. In EEOC v. The GEO Group, Inc., the Court credited the employer’s identified safety and security risks associated with the wearing of head coverings in prison: Smuggling of contraband, interference with identification of the wearer, and the potential use of the head covering as a strangulation weapon. This case demonstrates that an employer’s position in refusing a religious accommodation is stronger where significant safety concerns exist.

NLRB Decisions. The Supreme Court ruled that the National Labor Relations Board was not authorized to issue decisions during the more than two years that three of its five seats were vacant. The NLRB has compiled a list of the 595 decisions issued by the two-member Board. Most of the cases were already closed under the Board processes or are at some point in compliance proceedings; the remaining open cases were returned to the Board for reconsideration by at least three members. The Board has just begun to issue rulings on those cases.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

Green HR

I’m an environmentalist. I’ve even hugged a few trees, but I don’t claim that they’ve talked back to me. I’ve also sat on environmental non-profit boards and ran a non-profit environmental agency. That was the three-year environmental phase of my career. Then I had to start making money again. But during this period I learned that companies can have a significant impact on the environment — and that HR and a volunteer team can spearhead this effort. Here are some basic guidelines that you can consider:

• Consider telecommuting – Do employees really have to spend the time, energy, and money to drive to work every day or can they be more effective working from home or from remote offices?
• Go paperless – I’m impressed by how many insurance agencies I work with have gone paperless.
• Encourage carpooling and public transportation – You might even help pay for some of the gas.
• Recycle – Paper, glass, and plastic should all be recycled. Take one good look at a local shoreline and you’ll understand why.
• Beware of indoor air pollution – For many people, the building they work in has more air pollution than any other environment. Indoor air inspections can help prevent sick days and attendant non-productivity.
• Turn off the lights and computers – I’m amazed at how many buildings keep the lights on at night, and you know the cleaning crew isn’t there any longer. Turn off your lights and turn off your computers.
• Think in terms of sustainability – Although this is a broader objective, focus on how you can manufacture things or deliver services in a way that produces less of an environmental impact. For example, I can do a webinar rather than flying across the country to speak.
• Finally, encourage employees to offer green suggestions – Perhaps it’s a rooftop garden, organic lunches, or supporting a local environmental cause.

Going green is important to all of us. Our current ways are unsustainable. Fact is, HR can make a green difference.

Small Workplaces

The June 2010 issue of INC Magazine featured an excellent article entitled “Learning from the Best,” by Lee Buchanan, which discusses strategies from the Top Small Company Workplaces winners and finalists. Here’s a brief summary of the article’s recommendations:

1. Engage in open-book management. No surprise there. I’ve been preaching this ever since Jack Stack published his Great Game of Business. We had an excellent Webinar on open-book management presented by Coach George from the Great Game of Business. According to the article, 83% of these companies practice open-book management. We do here at HR That Works. Everybody knows every number, including what everybody gets paid. When I do my Vistage presentations and ask CEOs using open-book management about their experience during the depth of the recession, they said they were first concerned that it would scare the employees and some would run off; however, just the opposite happened and employees were very glad to have open-book management. If you don’t have it, what are you waiting for?
2. Be flexible. 95% of companies offer flexible work arrangements.
3. Keep learning. In some of the companies, employees provide courses, usually in the evenings, to other employees. For example, the employees at Snag-a-Job teach Finance Fundamentals 101, HTML Basics, Peer Coaching, Texas Hold ‘Em, Goal Setting, and Women’s Self-Defense. If you’re an HR That Works member, there are more than 70 separate training videos that your regular members or management can watch at any time. Never stop learning.
4. Develop “Level 5” leaders. This term, coined by Jim Collins, talks about Level 5 leaders in terms of humility and inclusion.
5. Focus on orientation. See the Orientation Checklist on HR That Works. Make your orientation process more exciting, motivating, and presented in such a way that instantly builds rapport with new employees, as opposed to the opposite. I also encourage you to use the 60-Day New Employee Survey on HR That Works.
6. Add a little bit of sunshine. Companies help to lessen employees’ stress by allowing them to telecommute, and assist their parents or loved ones even if they’re not obligated to do so by the Family and Medical Leave Act.
7. Think inside out. The top companies focus on building a great culture which, in turn, can deliver great products and services – Southwest Airlines comes to mind. What are your company values? How do you define and celebrate them? How happy are your employees? In our Webinar on Happiness in the Workplace, the presenter offered a free analysis of your happiness level. Go to www.iopener.com/report to see how happy you are at work. I couldn’t be happier to say that my employees and I all scored very high on this index.
8. Help maintain employee health. Many small companies are entrepreneur driven. In my experience, if the CEO is a health nut, then so is the rest of the workplace. Savvy companies bring in ergonomics and wellness to help employees. Whether it’s concierge services, healthy lunches, or a wellness day off, there’s no substitute for a healthy workforce.
9. Finally, you can change a toxic workplace. In his book How to Turn Around a Toxic Workplace, Jeffrey Pfeiffer states that you can turn around a toxic workplace in four ways: 1) Let people make decisions, 2) Share the economic results either through profit-sharing or gain-sharing, 3) Share information, and 4) Invest in people. Sounds like a great summary of the article!

You Can Discriminate — But Only If You Have a BFOQ (Bona Fide Occupational Qualification)

Employers often believe that they need a certain type of person to do a certain job because of physical requirements, client demands, privacy reasons, and tradition. Understand this: Any such discrimination will come under judicial scrutiny unless there’s a high level of correlation between gender, race, or nationality and the ability to perform job functions. For example, a 9th Circuit opinion held that a women’s correctional facility could not limit its correctional employees to females in an effort to reduce sexual abuse in the environment. On the other hand, it’s hard to argue that an employer doesn’t have the right to hire whom they want to as their next bikini model.

Bottom Line:Be prepared to prove your BFOQ, as well as any efforts you’ve made to mitigate the situation. For example, if employees have to lift a 200-pound box once a day, and this imposes a disparate impact on women, a reasonable alternative would be to not have anybody without the ability to lift those boxes. Our members continue to be plagued with questions such as, “Can I only hire Chinese waiters for my Chinese restaurant?” (Answer: No. As another article in this newsletter stated, customer preference cannot override discrimination laws.) “Can I hire only English-speaking employees at my hotel, even if they have limited customer interaction?” (Answer: Probably not.)

If you’re not sure, contact the HR That Works Hotline.

Abercrombie & Fitch Settles I-9 Paperwork Violations for More Than $1 Million

At the end of September 2010 – and with little fanfare – the Department of Homeland Security and Immigration and Customs Enforcement (ICE) announced settlement of an enforcement action against Abercrombie & Fitch, the nationwide clothing retailer. This settlement is remarkable for several reasons.

The settlement amount is $1,047,110, which is an enormous monetary penalty in today’s economy. More shocking is the fact that this penalty is for paperwork violations only. There are no allegations that Abercrombie & Fitch employed illegal workers or otherwise violated immigration law. Instead, this penalty is solely for improper completion of I-9 forms.

The settlement results from a compliance audit initiated in November 2008. It’s common for ICE to take two years or more to conclude an I-9 paperwork audit.

The second surprise about this settlement is that the I-9 inspection involved the clothing retailer’s Michigan stores, and is apparently not the result of a nationwide compliance audit. The ICE press release states that the company “was fully cooperative during the investigation and no instances of the knowing hire of unauthorized aliens were discovered.” If that is the case, the agreed-upon penalty either reflects an enormous number of violations or very severe fines per violation.

Third, the violations uncovered during the inspection involved “numerous technology-related deficiencies in Abercrombie & Fitch’s electronic I-9 verification system.” This suggests that the company’s I-9 software vendor was negligent and failed to confirm that its software system achieved proper I-9 compliance or that the company was poorly trained in implementing and administering the electronic I-9 compliance program. In either case, this settlement serves as a wake-up call to all employers using electronic verification systems: Make certain the system ensures proper I-9 compliance and that you are using it correctly.

Even employers that don’t use electronic I-9 compliance systems should note the heavy fines imposed because of this investigation. The ICE press release confirms that the agency has implemented a new, comprehensive strategy to audit and investigate employers, and that this effort has resulted in a record number of civil and criminal penalties against employers. Now is the time to ensure that your compliance will survive an ICE investigation!

To obtain the free 14-step self-audit checklist, see this month’s Form of the Month.

Article courtesy of Worklaw® Network firm Elarbee Thompson (www.elarbeethompson.com).

Employment Law: Jury Awards, Trends, and Statistics

Every year, I read the Jury Award, Trends, and Statistics report on employment law published by Jury Verdict Research. I used this report during my litigation career to help position cases for settlement purposes.

Because it takes a long time to gather these statistics, the report doesn’t appear until October of the following year. The good news: JVR reported that the median compensatory award in employment practices cases dropped from $285,000 in 2008 to $253,000 in 2009 (the second highest level ever recorded). There has been an upward trend in EPL verdicts since 2003. Although the median award was $253,000, the mean award came in at $753,332. Here are some other statistics from the report:

• The highest average EPL award between 2003 and 2009 was for retaliation, coming in at $245,500. The second highest average verdict was for wrongful termination at $232,500.
• Approximately 37% of the cases result in a verdict between $100,000 and $500,000.
• In 2009, 24% of the cases had a jury verdict of $1 million or more.
• The highest average compensatory verdicts came against government entities, with manufacturing/industrial companies coming in second place. Transportation firms had the lowest average verdict.
• Between 2003 and 2009, the most common claims for discrimination involved sex (35%), race (25%), disability (15%), age (13%), and other (12%). Age and disability cases had the highest median awards, both more than $250,000. Sex and race cases averaged approximately $200,000.
• As has been the case every year, state court verdicts are dramatically higher than those in federal courts. This is one reason why plaintiffs’ attorneys prefer to try their cases in state court.
• When it comes to the recovery probability for employment practices liability, employers received a break: Employees won 58% of their cases, down from 60% in 2008.

You can order a copy of this report from Jury Verdict Research for approximately $40 by going to www.lrp.com or calling (800) 341-7874.

Unwanted Transfer of Pregnant Employee Might Violate Title VII and ADA

An employer who assumes that a pregnant employee cannot perform her usual job duties or work in her usual work environment may be liable for discrimination under the Pregnancy Discrimination Act (PDA), which is part of Title VII, and the Americans with Disabilities Act (ADA).

Facts of the Case: In Spees v. James Marine, Inc., a female welder, who had previously miscarried several times, reported to her manager that she was pregnant. He expressed concern about her being around chemicals and welding smoke, and about her climbing for certain projects. He required that she obtain a note from her doctor to determine what she could and could not do. In the meantime, her manager had already decided to move her to a light duty job. When the employee presented her doctor’s note, which had no physical limitations, the manager required her to obtain a revised note that limited her to light duty. She was then transferred to a less desirable tool room job and a nighttime shift, which the employee, a single mother, found problematic for child-care purposes. She was terminated when her doctor placed her on complete bed rest and she had no more leave available.

The employee sued, alleging that the transfer and termination violated both the PDA and the ADA. The trial court granted summary judgment for the employer and dismissed the employee’s claims, finding that the transfer at the same rate of pay and benefits was not an adverse employment action in violation of employment discrimination laws, and that the employer terminated her based on her inability to work due to doctor-ordered bed rest rather than any illegal motive.

The Court’s Ruling: On appeal, the U.S. Court of Appeals for the 6th Circuit affirmed the District Court’s grant of summary judgment on the termination claims, but reversed the ruling on the transfer claims. The Court found that the transfer to the tool room job constituted an adverse employment action, because it involved a more inconvenient shift, in a position that required less training and skills and was less challenging for the employee. The Court further found that the employee’s pregnancy could certainly have been a factor in the transfer decision, in violation of the PDA, because the employer had decided to transfer the employee before receiving any information from her doctor, and then required the employee to obtain a revised note from the doctor to support the transfer.

In addition, the Court found that the transfer could have been a violation of the ADA. To bring a claim under the ADA, an employee must show that she has a disability (i.e. a substantial limitation on a major life activity), has a history of a disability, or is regarded as being disabled. The Court acknowledged that a normal pregnancy is not a disability under the ADA, but found that the employer regarded the employee as being impaired in the major life activity of working, due to her history of pregnancy problems. The Court noted that the EEOC’s interpretative guidelines state that “Complications resulting from pregnancy . . . are impairments.”

Lessons Learned: This case reminds employers to be careful of making judgments intended to be in the best interests of an employee’s health, especially where such judgments are either unwanted by the employee or unsupported by independent medical opinion. Moreover, the case serves as a warning to employers that, particularly in light of the expanded protections under the amended ADA, pregnancy-related conditions may be considered disabilities.

Acceding to Patient Racial Preferences Violates Title VII

A nursing home’s acquiescence to a patient’s refusal to receive treatment from black healthcare providers violated Title VII’s prohibition of race discrimination.

Facts of the Case: In Chaney v. Plainfield Healthcare Center, a nursing home resident did not want to be cared for by any black employees. In compliance with the resident’s request, the nursing home informed a black certified nursing assistant (CNA) in writing each day that “no black” assistants should enter the resident’s room or provide care for her. The CNA’s co-workers also used racial epithets towards her, although this eventually stopped after the CNA complained to her manager. The nursing home terminated the CNA after only three months of employment, allegedly for using profanity in front of a resident.

The CNA sued the nursing home for subjecting her to a hostile work environment and terminating her because of her race. The trial court granted summary judgment for the nursing home and dismissed her claims. The court found no hostile environment had existed because the nursing home had addressed her complaints about the racial epithets and because the nursing home’s policy of forbidding black CNAs from caring for certain patients was based on its good faith belief that state and federal patient rights laws permitted patients to choose their healthcare providers. The court further found that the CNA’s termination was unrelated to her race.

The Court’s Ruling: On appeal, the U.S. Court of Appeals for the Seventh Circuit reversed the trial court’s decision. The Court found that the nursing home “acted to foster and engender a racially-charged environment” through its race-specific patient preference policy, which reminded black employees on a daily basis of work restrictions that were expressly not shared by white employees. The Court rejected the nursing home’s argument that the policy was required to comply with federal and state law, finding that the laws, while requiring patient access to healthcare providers of their choice (e.g., a patient may hire a white aide at her own expense), do not require employers to institute race-based work practices. As the Court observed, “It is now widely accepted that a company’s desire to cater to the perceived racial preferences of its customers is not a defense under Title VII for treating employees differently based on race.” The existence of the policy, along with the use of the racial epithets, constituted a racially hostile environment. The Court also determined that there was evidence to suggest that the stated reason for the CNA’s termination was a pretext for race discrimination.

Lessons Learned: Employers cannot accede to race-based preferences of their customers or clients. When faced with such preferences, as this Court suggested, an employer should inform customers and clients of its nondiscrimination policy, attempt to reform customer behavior, and assign staff based on race-neutral criteria that minimize the risk of conflict. For example, an employer could advise its employees that they can seek protection from racially harassing customers. By doing so, the employer “would not be imposing an unwanted, race-conscious work limitation on its black employees; rather it would be allowing all employees to work in a race-neutral, non-harassing work environment, as is commonly expected of employers.”

Articles courtesy of Shawe Rosenthal (www.shawe.com).

Form of the Month

Guidelines for Conducting an I-9 Audit (PDF) – Use this 14-point self-auditing checklist to make sure that you’re complying with I-9 employee immigration status verification system.

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