Wednesday, January 20, 2010
Managing HR Risk Part 2: Do I Have to Pay My Employees Overtime Pay?
Employees can be covered by the FLSA in two different ways. Employees are entitled to enterprise coverage if they work for businesses or organizations that have at least $500,000 per year in sales, hospitals, nursing homes, schools, or preschools. If there is no enterprise coverage, then employees may have individual coverage under the FLSA if their job duties involve them in commerce or the production of goods for commerce, like factory workers or people who travel to other states for their jobs. Domestic service workers, such as maids or full-time babysitters, also qualify for coverage under the FLSA.
Generally, if you allow your employees to work overtime, defined as any hours worked more than 40 hours in a one week period, you are required to pay your employees one and one-half times your normal pay rate, for those overtime hours worked. However, the FLSA contains several exceptions to the overtime pay requirement for certain kinds of businesses and certain kinds of employees. Because overtime pay can cost your business a significant amount of money, you need to be aware of which employees are "exempt” from the overtime provisions in FlSA and which are “non-exempt.”
For instance, the overtime pay requirement does not apply to regular hours worked on weekends, nights, and holidays, so long as there is not more than 40 hours worked in one week period. In other words, you are not required to pay overtime to an employee solely because he or she works on Sundays. Likewise, if your employees are executive, administrative, professional, computer, or outside sales employees, as defined by the Department of Labor regulations, and draw a salary of at least $455 per week, or $23,660 per year, then they are exempt from the overtime pay requirement.
Department of Labor regulations provide very specific guidance about which positions qualify as exempt, usually based on the types of duties that those positions involve, not the job title given by the company. For instance, in order for an executive position to qualify as exempt, the worker’s duties typically must involve management responsibilities, supervision of at least two other workers, and authority to hire and/or fire other employees. Likewise, in order for an administrative position to be exempt it must be at a level to direct a significant portion of the business, exercise broad discretion and independent judgement. A position like administrative assistant would likely not meet these criteria. Furthermore, these types of exempt positions usually must be paid on salary, rather than on an hourly basis.
You also have to be mindful of your employees’ duties when classifying them as exempt or non-exempt. Some positions require a worker to perform both exempt and non-exempt duties. Therefore, depending on whether the worker’s duties for that particular week qualify as exempt or non-exempt, you may or may not be required to pay that worker overtime, should he or she work more than 40 hours in a one week period. If the employee performs any non-exempt work during the one week pay period he or she must be paid as a non-exempt employee.
The law requires that covered employees be paid overtime pay for hours actually worked in excess of 40 hours per week. Paid vacation, sick, PTO, bereavement or other types of paid time off do not count toward the 40 hours worked. For example, an employee works 10 hours per day Monday through Thursday, and takes a PTO day on Friday. You would pay him 48 hours of straight time pay.
One area that some companies get into trouble with is withholding pay because they did not authorize the employee to work those hours. The law is very clear on this. If they worked the hours, they must be paid for them, even if they didn’t have approval to work them.
Finally, some states have also enacted laws that mandate overtime pay in certain circumstances, or that provide for overtime pay that is more than the FLSA standard of one and one-half times the regular wage. If both the FLSA and a state overtime law apply to your business, you must pay whichever overtime rate is higher to your non-exempt employees who work overtime.
If you have any questions please give us a call at 515-962-7035 and we will be glad to assist you.
Please visit our website, http://www.yourownhrpro.com/
Managing HR Risk Part 1: Harassment
When I talk to business leaders, the topic of employee related legal risks is one that most seem to want to avoid. Despite almost daily news headlines about harassment claims, back-wage settlements, undocumented workers, and wrongful discharge lawsuits, an alarming number of small business leaders don’t know if their company is at undue risk or not, or what they should be doing to minimize risks. So over the next few weeks Bev and I will cover some of the primary risk areas that employers face, and ways to minimize those risks.
The first area I would like to address is harassment. I choose this first, not only because the legal costs and settlements can be astronomical, but because having a harassment-free work environment is really in the best interest of every organization anyway. People are at their best and most productive when they can work in a respectful environment where they feel valued.
One would think that forty five years after the enactment of the Civil Rights Act, people would have gotten the message that discrimination and harassment is not OK in the workplace, but in 2008 more than 95,000 complaints were filed with the EEOC, up fifteen percent over the previous year. And most of these were against companies with fewer than one hundred employees.
And what is the cost of all of this? Well, most companies are lucky, …for only a few thousand dollars in attorney fees and maybe a hundred or so of their own man-hours they are able to successfully answer the complaints, and the complaints are dropped. Many though aren’t quite so lucky and end up in court. Often, even if the company has good documentation and has a solid defense, it will cost more to litigate the case than to settle out of court, so you never hear about those cases. You also don’t hear about the cases where they do spend thousands to litigate and win. The only cases that make the news are the ones that result in six figure and sometimes multi million dollar judgments.
Without going into a technical dissertation involving an alphabet soup of federal and state laws, the following classes are protected against discrimination and harassment in the workplace: race, age, creed, national origin, color, gender identity, sex, sexual orientation, disability, pregnancy, and religion. This means that you as an employer cannot make any hiring, firing, or other employment decisions based on these factors, as long as the person is able to do the essential functions of the job. It also means that you are required to provide a work environment where employees are not harassed on the basis of these classes.
Harassment takes two basic forms, quid pro quo and hostile working environment. Quid pro quo is linked almost exclusively to sexual harassment and essentially means this for that. It occurs when someone in a position of power or authority makes some condition of employment contingent on something he/she wants, i.e. sexual favors. It is highly unlikely that it will be as blatant as, “I’ll give you a big bonus if you have sex with me.” But it might sound something like, “I’m sure you’ve heard there may be some layoffs. Why don’t you and I go to dinner tonight, and I’m sure we can work out something to make sure your job is secure.”
The second form, hostile working environment, is actually more prevalent, and harder to control, because it can come from all levels of the organization as well as from vendors and customers. These are the jokes, comments, innuendos, slurs, pictures, emails, and so on, made against members of these protected groups… anything that creates a hostile working environment.
So, what do you need to do to safeguard your company against harassment complaints? The essential steps are not difficult or costly. Here they are.
1. Have a clear, written no-tolerance policy on harassment. The policy should describe what harassment is, what each employee’s responsibility is, what to do if they observe or experience harassment, and that harassment will not be tolerated.
2. Distribute and communicate the policy to all employees. This should be covered in face-to-face meetings with existing employees, and covered in new employee orientation.
3. Have a reporting mechanism in place should harassment occur. Who should they contact? There needs to be alternative contacts.
4. Train all supervisory staff what to do if they become aware of harassment. Supervisors must understand that they must act if they become aware of harassment even if they don’t think it is a big deal themselves.
Those are the essentials. I would also recommend conducting periodic training for all employees and supervisors at least bi-annually. Additionally, offering an employee assistance plan can be a good resource for employees if they are experiencing any form of harassment.
If harassment is reported, take swift and appropriate action. Keep confidentiality as much as possible. Document everything.
We at Your Own HR Pro have extensive experience developing harassment and respectful workplace policies, providing training, and conducting investigations. Please don’t hesitate to call us should you need assistance.
Please visit our website at http://www.yourownhrpro.com/
Thursday, July 9, 2009
The 3 C's of Employe Handbooks
Hi, it's Bev again. How many of you have looked at your handbook in the last six months to make sure it is current and says what you want it to say? The Employee Handbook – every word counts. Now is a good time to review it in light of recent legislative and regulatory changes.
Three C’s Handbooks should have:
- Not be a Contract
- Communicate your policies to your workforce
- Comply with federal, state and local laws
We advise you to make sure your handbook does not create binding contractual obligations. State laws control whether an employee handbook can be viewed as a contract.
A handbook may create an implied contract of employment if it sets forth progressive discipline plans or corrective action procedures or distinguishes between “probationary” and “permanent” employees and provides for the discharge of “permanent” employees only after specific preconditions are met. If your handbook uses that type of wording I suggest you change it.
The best way to get around having a court call your handbook a contract is to use a disclaimer. The disclaimer should be prominently displayed in the handbook and should advise the employees that the policies and procedures are not intended to create a contract. HR should make sure to obtain a signed receipt on distribution of the handbook.
However, a disclaimer does not solve every problem. It is not a “get out of jail free” card. Even with a disclaimer, it is important for an employer to be uniform in its application of the handbook policies.
As to the second “C”-Communication- the handbook should plainly state the employer’s rules, regulations and procedures. It is critical with your handbook to say what you do and do what you say. If you don’t follow the policies and procedures it will come back to bite you. You will want to include rules regarding such diverse topics as access to personnel records, anti-nepotism rules, travel policies, attendance policies, performance evaluations, payment of wages including overtime, searches on employer property and in-house investigations.
You should make sure to describe your policies designed to assist employees. “You want to brag,” this includes your policies regarding all leaves of absence, employees assistance programs, holidays and flextime. Make sure to communicate your commitment to equal opportunity and harassment With your harassment policy, not only do you need to make a firm statement that harassment will not be tolerated but you need to spell out the steps to take if it occurs. Having this type of policy is not only the right thing to do, but it will save you money.
Set guidelines for the termination of employment, and make sure to develop “cutting edge” policies to take into account such issues as the use of social networking sites, blogging, telephone call monitoring and telecommuting.
And the third “C”-Compliance-means you must make sure that, in addition to addressing federal employment laws, you incorporate state and local legal requirements into your handbooks. Such things as workplace smoking policies, voting policies, jury duty policies, protected off-duty legal activity and breastfeeding accommodations are regulated by state laws.
Your handbook doesn’t have to be fancy, but it does need to be accurate and kept up-to-date. If you need help developing your policies or your handbook, give us a call. We have lots of experience, and can get you headed in the right direction.
Please visit our website at http://www.yourownhrpro.com/
Wednesday, July 1, 2009
Drug/Alcohol Testing in Iowa: an employer's primer
If you have employees that fall under safety sensitive transportation classifications of Omnibus Transportation Employee Testing Act of 1991, which includes aviation, trucking, railroads, mass transit, pipelines and other transportation industries, drug and alcohol testing is required. These are most commonly referred to as DOT drug and alcohol testing requirements, and will not be directly addressed in this article.
Iowa Code Section 730.5 provides for the following types of drug testing in the private sector.
Post-offer, pre-employment: Employers may require prospective employees to undergo testing at the employer’s expense after a bona fide job offer has been made, but prior to the start of work. Continued employment may be made contingent on negative results of the test.
Unannounced testing of workers randomly selected from pools of defined populations of employees.
Post-accident testing: Testing following accidents that are serious enough to require OSHA reporting.
Reasonable suspicion: This may include observation of substance abuse or impairment at work, abnormal behavior or performance at work, credible report of drug or alcohol use at work, evidence of tampering with a drug test, evidence that the employee has caused an OSHA reportable accident, evidence that the employee has made, sold, possessed, or used drugs while at work.
Testing during or after drug or alcohol treatment programs.
Testing as required by federal laws or regulations (ie. under DOT requirements).
So, that is what you can legally do in Iowa. Let’s take a look at some of the pros and cons of drug and alcohol testing.
The Pros
As already noted, drug and alcohol abuse can create huge liability and costs for employers. The rationale of drug and alcohol testing programs is that they will help companies select employees less likely to abuse drugs and alcohol and serves as a deterrent against abuse for existing employees.
There is no consensus on how effective these programs actually are in achieving this though. Yes, they will weed out substance abusing job candidates, and yes, occasionally an employee will test positive on a random, post-accident, or reasonable suspicion test, and the fact that the policies are in place most certainly has some level of deterrent effect.
But study results vary. For instance the annual Drug Testing Index published by Quest Diagnostics shows that positive drug testing results fell from 13.6 percent in 1988 to 3.8 in 2006, which they attributed to widespread testing programs by employers. On the other hand, researchers at Le Moyne University in a study of high tech industries found that companies with drug testing programs actually had lower productivity than those who did not.
Having such a program in place does send a strong message to employees, customers, and the community that the company is committed to providing a work environment that is free from substance abuse. If communicated well, such a program can actually be a morale booster to employees as a whole who understand the dangers of substance abuse in the workplace and appreciate that their employer is taking action against it.
To the extent that having a drug and alcohol testing program can contribute to lower drug and alcohol abuse in the workplace, the company can enjoy lower costs and higher profits as a result of lower employee turnover, fewer accidents, lower workers comp costs, higher employee morale and greater productivity.
The Cons
The program can be costly. The individual tests run less than $50 each, but by the time you include the costs of administering the entire program, over time it can be very costly. In fact a congressional committee estimated the cost of each positive test in government to be $77,000, because the positive test rate was 0.5%. One of the reasons suggested for the downward trend in drug and alcohol testing in recent years has been the cost/benefit of such programs.
People wishing to beat drug tests will go to great lengths to do so. There is a whole multi-million dollar industry built around beating drug tests, products ranging from the Whizzinator to fake urine to various additives all touted as a sure way to pass drug tests and available a click away on the internet. So there is a constant race to keep technology a step ahead of those who wish to beat it.
One other factor to keep in mind before launching a drug and alcohol testing program is how it will impact the culture of the organization. If not communicated well, the program can cause discontent among employees. Some employees view drug and alcohol testing to be invasive.
The programs can also be administratively complex to administer, given the myriad of laws and administrative rules that must be followed. Under Iowa Code Section 730.5 employers are required to have the following in place in order to maintain a drug and alcohol testing program.
1. Have a policy in place that complies with Iowa Code Section 730.5, and you have distributed and communicated it to all covered employees.
2. Have an employee assistance program in place or you have a resource file where employees can access help for substance abuse problems.
3. Provide training as outlined in the Code to supervisors (2 hours the first year, 1 hour subsequent years).
Additionally, employers who do drug testing must work with qualified collection sites, laboratories and medical review officers, or if they choose to do the testing on-site, must have facilities and staff that meet the strict qualification standards.
Finally, drug and alcohol testing programs cannot assure that drug and alcohol abuse is eliminated from the workplace. To be fully effective it must rely on the training and best judgment of the supervisors and employees of the company.
There are a number of situations where drug and alcohol testing might be the preferred option, for instance, if your company is required by law to test certain populations of employees, you may want to test all employees to maintain consistency, or if you have a high risk working environment such as heavy machinery. It is never a good idea to introduce drug and alcohol testing as a way to weed out a problem employee.
Alternatives to Testing
The best place to begin is to have a zero-tolerance policy on drug and alcohol abuse in the workplace. Distribute the policy to all employees and train employees and supervisors on the dangers of drug and alcohol abuse, how to spot it, and what to do if they spot it in the workplace. Training your supervisors on substance abuse identification and response can be a very effective alternative to testing. If your company has an employee assistance program, the EAP professionals can be a great resource to you and your supervisors in addressing potential substance abuse cases.
Recently there has been some interest in using computer-based performance tests where employees set their own baselines, then must achieve a passing score before clocking in to work. While performance tests like this do show promise they haven’t met with wide acceptance.
Is Drug and Alcohol Testing Right For Our Company?
In the state of Iowa drug and alcohol testing is very defined. Employers considering whether it is right in their organizations need to first become familiar with Iowa Code 730.5, which covers the parameters of testing and the responsibilities of employers. Then employers need to consider how drug and alcohol testing will fit with their organizational cultures and with their business objectives to determine if that is the best alternative to achieve a drug and alcohol abuse-free workplace.
Please visit our website at http://www.yourownhrpro.com
Thursday, June 25, 2009
Overcoming Negativity in the Workplace
Hello! My name is Bev,the other half of Your Own HR Pro, and I would like to share my thoughts with you about something that affects not only the employees, but customers’ perception of the company, and in turn the bottom line. I’m talking about negativity in the workplace.
In today’s business environment, people are working harder, sometimes for less money, people’s hours are being cut back, many are losing their jobs or they see their co-workers losing their jobs, and they are left picking up the extra work. You as a manager, are closely in touch with employees throughout the company, allowing you to keep your fingers on the pulse of the organization to sense workplace negativity. It enables you to establish and heed early warning signals that all is not well. You receive employee complaints, do exit interviews with employees who leave, and know the reputation of your organization in your community.
Negativity is often the result of a loss of confidence, control, broken promises and the accountability of senior management. Knowing what people are negative about is the first step in solving the problem.
In my experience, when rumblings and negativity are beginning in your organization, talking with the employees will help you understand the exact problems and the degree to which the problems are impacting your workplace. You will want to pinpoint employee, employee groups who are experiencing the negativity, and the nature of the issues that sparked their unhappiness.
Perhaps the organization made a decision that adversely affected staff. Perhaps the executive manager held a staff meeting and things were said or questions were asked that were misperceived or perceived as threatening. Perhaps underground rumors are circulating about an impending layoff. People may feel that they give the organization more than they receive in return. They may feel that a coworker was mistreated or denied a deserved promotion.
Whatever the cause of the workplace negativity, you must address the issues, or like a seemingly dormant volcano, they will boil beneath the surface, and periodically bubble up and overflow to cause fresh damage.
The best way to combat workplace negativity is to keep it from occurring in the first place. These following tips will help you minimize the workplace negativity.
- Provide opportunities for people to make decisions about and control and/or influence their own job. The single most frequent cause of workplace negativity I encounter is traceable to a manager or the organization making a decision about a person’s work without his or her input. Almost any decision that excludes the input of the person doing the job is perceived as negative.
- Make opportunities available for people to express their opinion about workplace policies and procedures. Recognize the impact of changes such areas as work hours, pay, benefits, assignment of overtime hours, comp pay, dress code, job requirements and working conditions.
- Treat people as adults with fairness and consistency. Develop and publicize workplace policies and procedures that organize work effectively. Apply them consistently. As an example, if your vacation policy allows the opportunity for employees to apply for vacation time, tell the employees how the decisions will be made and apply the same factors to all employees.
- Address the issues directly with those employees. You want to minimize the number of rules directing the behavior of adult people at work. Treat people as adults; they will usually live up to your expectations and their own expectations.
- Help people feel like members of the in-crowd; each person wants to have the same information as quickly as everyone else, and nobody wants to feel excluded. Provide the context for decisions, and communicate effectively and constantly.
- Afford the people the opportunity to grow and develop. Training, perceived opportunities for promotion, lateral moves for development, and cross training are visible signs of an organization’s commitment to staff.
- Provide appropriate leadership and strategic framework, including mission, vision, values, and goals. People want to feel as if they are part of something bigger than themselves. If they understand the direction, and their part in making the desired outcomes happen, they can effectively contribute more.
- Provide appropriate rewards and recognition so people feel their contribution is valued. The power of appropriate rewards and recognition for a positive workplace is remarkable. Suffice to say, rewards and recognition are among the most powerful tools an organization can use to buoy staff morale.
Take some time to analyze how well your organization is applying these recommendations. They form the foundation for a positive staff morale and minimized negativity in your workplace.
Please check our our website http://www.yourownhrpro.com
Tuesday, June 23, 2009
Things I Learned From My Dad…
Keep your rows straight - He always took great pride in how his fields looked… nice straight rows. His secret to straight rows was looking ahead. When he struck out on a new field he would pick an object on the other end of the field and focus on that, heading straight toward it. Sort of like goals… begin with the end in mind, and always keep that in focus. Don’t let the everyday things happening around you distract you from that goal. Anyway, he tells of a time he did this and got to the other end only to find that the object he had set his sight on was a calf that was pacing back and forth along the fence line.
Creativity and ingenuity - Thinking outside the box is a buzz term that has been around for awhile, but I think my dad had that concept mastered years before. One example that stands out happened during harvest time. There was a rain storm moving in and Dad wanted to finish combining the field before it hit. As luck would have it, the main bearing in the feeder chain went out. The nearest part was hours away, and by that time the rain would be there. As Dad sat looking at what was left of the roller bearing, it struck him that bearing cylinders were about the same size as 16 penny nails. He grabbed a handful of nails, cut them to the right length, packed them back into the bearing race with grease, put it back together, and that home-made bearing ran on that old combine until it was retired several years later.
Looking after people - If you can claim one best friend in life you are fortunate indeed. A best friend is a rare and precious gift. I think there are several people who would claim my dad as their best friend. Why? Because he invested in them, cared for them and he looked after them. He was never too busy to help other people. He is the person who will drive over to check in on someone to make sure they are OK, or just give them a call to chat. He treated everyone with respect. It didn’t matter if it was the bank president or the kid that everyone else picked on. They were his friend.
I find myself getting so caught up with the fast pace that today's culture puts on us that it is easy to forget this. But it is so important, both in personal relationships and in business relationships.
Finally, my dad taught me that success isn’t how much money you make or how high you climb on the corporate ladder, it is how you touch those around you.
Thank you Dad.
Please visit our website http://www.yourownhrpro.com/
Thursday, June 18, 2009
Same Sex Marriage in Iowa - What Employers Need to Know
This is a hotly debated topic, and my intent here is not to take any side, but to discuss the impact on employers from a legal standpoint. It is a complex issue, particularly when it comes to employee benefits, where some benefits are governed by Iowa law, some by federal law (which does not recognize same-sex marriage), and some by both.
First I would like to discuss the area of respectful workplace, discrimination and harassment. The law has not changed in this area. Sexual orientation has always been protected under the Iowa Civil Rights Act, which means that you cannot discriminate against or harass an employee because he or she is gay or lesbian.
What may change is a "coming out." Your employee may have chosen not to disclose to anyone at work that he or she was gay or lesbian, but if someone sees their wedding announcement in the newspaper, the word would be out. So you need to be extra sensitive to these situations, and be proactive to head off any potential issues. And by all means, make sure you have your respectful workplace/harassment policy in place, that it is communicated to your employees, and that they know the process to report harassment if it occurs.
Also, be aware that you need to treat people equitably. So if it is the culture at your company to throw a wedding shower or chip in for a gift for a heterosexual couple... Well, this may seem a bit awkward, but you should be thinking how you can treat your same-sex couple as equally as heterosexual couples. You should at least visit with your employee to find out his or her wishes.,
OK, on to the benefits, and this is where it gets really messy. I won't be able to cover everything here. You should rely on your benefits providers, as they are the experts and know your plans, but I'll give you some of the basics so you understand where all the craziness is coming from.
One of the priviliges of marriage is having rights as a spouse to employee benefits. The main tension here is between the Iowa law that says same-sex marriage is OK, and the Federal Defense of Marriage Act (DOMA), which specifically defines marriage as a legal union exclusively between one man and one woman. So any employee benefits controlled by federal laws like COBRA, FMLA, HIPAA, Section 125, etc. are not extended to same-sex spouses. Below are some examples.
Most employer-sponsored health plans (including dental and vision) will cover same-sex spouses. If you have a self-insured plan covered under ERISA, there may be an exception, however before excluding same-sex spouses, I would strongly suggest consulting your attorney.
If the employee loses coverage and is eligible for COBRA, he/she may elect family coverage and cover the same-sex spouse, however, if he/she waives coverage, the same-sex spouse does not have COBRA priviliges on his/her own.
HIPAA is a federal law, so same-sex spouses have no special enrollment rights for qualifying events. For instance, if you get married, it is normally a qualifying event to add drop coverage, but not for same-sex spouses. However they could enroll at the next open enrollment.
Family Medical Leave Act (FMLA) is a federal law, so does cover time off to care for same-sex spouse.
Section 125 (Flexible Spending Accounts) and Health Savings Accounts are federal laws, so that money cannot be used to reimburse for same-sex spouse expenses.
This is not a complete list. You should discuss all of your employee benefits with your benefits providor. In addition you should review your policies for any references to spouse or domestic partner to make sure you are using the terminology you intend. Examples of plans and policies to review are bereavement leave, sick leave, any self-funded reinsurance, your retirement or pension plans, and adoption assistance plans.
While we at Your Own HR Pro are not your benefits experts, we can be of assistance in reviewing and developing your employee policies and providing respectful workplace training. Don't hesitate to give us a call.
Please visit our website http://www.yourownhrpro.com/ .