In my last blog we talked about the Termination Checklist and how it’s important to ensure there are no loose ends when an employee
terminates voluntarily or is fired.  It’s also important to know, when issuing the final paycheck, what you can and cannot deduct from it.

In California, an employer can only make deductions from an employee’s final paycheck that are:

• required under federal or California law, such as income taxes and social security tax
• authorized by the employee, such as premiums for a health or pension plan, or
• authorized by the terms of a collective bargaining agreement.

No other deductions are allowed. You may not deduct from an employee’s final check any amount still owed on a debt, even though the indebtedness is contained in a written agreement to pay the full amount of the debt on demand, at termination or otherwise.

Likewise, if you advanced an employee vacation and they quit or are terminated before the advanced vacation is earned back, you cannot deduct the amount from the employee’s final paycheck.

In both these cases you will have to pursue other avenues to recoup the amount owed.

Again, be sure that you issue the employee’s final check promptly. If the employee voluntarily terminates and gives at least 72 hours notice, you must issue the final paycheck on the employee’s last day of work. If you terminate an employee you must issue the final paycheck immediately upon termination.

There are a number of activities that need to be completed to ensure a smooth and legal transition when an employee leaves, either voluntarily or involuntarily. The best way to ensure that none of these activities gets overlooked is to incorporate a Termination Checklist as part of your standard termination procedures. This is especially important for involuntary terminations as an oversight or error may have serious legal ramifications.

If you are terminating an employee for performance issues, be sure you have written documentation describing the issue, the steps taken to resolve it, and the results. Even though California is an “at-will” state, detailed documentation is your best defense if a legal action transpires. When in doubt, speak with a California employment attorney.

Also, remember that for involuntary terminations you need to give the employee their final paycheck immediately upon termination. For voluntary terminations the due date for the final check depends on the amount of notice the employee gives. If the employee gives less than 72 “clock” hours notice, you have 72 hours from the time of notice to issue the final check. If an employee gives more than 72 hours notice, you must issue the final paycheck on the employee’s last day of work. Also, any outstanding expense reports must be paid on termination.

As part of your regular termination process be sure you also address the following items:

Benefits – related notices to provide (if applicable):

• COBRA benefits coverage information should be sent to the departing employee’s home address
• COBRA Notice to Plan Administrator of Cal-COBRA Notice to Carrier
• HIPPA Notice
• Health Insurance Premium (HIPP) Notices (California only)
• Stock Option Closing Statement
• 401(k) plan information should be sent to the departing employee’s home address

Other Items/Forms to provide:

• Copy of the Non-Disclosure/Confidentiality Agreement or Policy (Best Practice)
• Notice to Employee as to Change in Relationship (California only)
• EDD Form 2320 For Your Benefit

Examples of property to be collected:

• Building and desk keys
• ID/security badge
• Laptop, software, hardware, etc.
• Cell phones
• Company tools and equipment
• User ID/passwords (voicemail, computer)
• Files and other miscellaneous company-owned items

Also, remove the terminating employee’s access to email, the network, the company intranet and any other programs or proprietary information meant solely for the use of employees. Ask the employee to provide their most recent address and contact information (phone, email) for W-2s and any other follow up communications. Remind them to contact you in the event they move prior to year end.

You may also want to conduct an exit interview to learn more about the employee’s experience  at your company.

If you are a San Francisco employer, here’s a reminder about some SF-specific ordinances that can be costly if you don’t comply.

Also, for those of you who look to foreign nationals to fill certain skill needs, the H1-B cap has been reached for this year. This year there were 172,500 H-1B petitions received and only 65,000 were selected, leaving 87,500 applicants who are no longer eligible for H-1B status this year. Contact your immigration attorney for options for those employees.

Paid Sick Leave

The San Francisco Paid Sick Leave Ordinance states that all employers must provide paid sick leave to each employee (including temporary and part-time employees) who performs work in San Francisco. Paid sick leave begins to accrue 90 calendar days after the employment start date. Employees are to accrue one hour of paid sick leave for every 30 hours worked.

Employers with fewer than 10 employees (including fulltime, part-time and temporary employees) must allow their employees to accrue up to 40 hours paid sick leave before capping it. Employers with 10 or more employees must allow up to 72 hours of accrued paid sick leave. An employee’s accrued paid sick leave carries over from year to year. The ordinance entitles employees to paid sick leave for their own medical care and to care for a family member.

Be sure you post the Paid Sick Leave Notice.

Healthcare Security

If you have 20 or more employees, or are a nonprofit with 50 or more employees, regardless of where those employees are located, you are required to make a minimum level of expenditure toward healthcare for covered employees. Covered employees are those who have worked for you for more than 90 calendar days, and work at least 8 hours per week in San Francisco.

In addition, you must maintain records sufficient to demonstrate compliance with the requirement; post a Health Care Security Ordinance Notice in all workplaces with covered employees; and submit an annual reporting form by April 30^th each year.

Family Friendly Workplace

San Francisco’s Family Friendly Workplace Ordinance went into effect January 1, 2014. Under this ordinance, employers with 20 or more employees must allow covered employees to request a flexible or predictable work schedule to allow them to assist with care giving responsibilities for:

1. Their child or children under the age of 18
2. A family member with a serious health condition
3. Their parent, age 65 or older

Be sure to post the required Notice.

I recently attended a couple of legal seminars and I wanted to take this opportunity to bring you up to date on some employment law changes and updates that are important for business owners.

Paid Family Leave (PFL)
SB 770, which went into effect July 1, 2014, expands Paid Family Leave to cover time off to care for a seriously ill grandparent, grandchild, sibling or parent-in-law.  Previously, PFL was available only to employees who take time off to care for a seriously ill child, spouse, parent, or domestic partner; or to bond with a minor child within one year of birth or placement related to foster care or adoption.

LGBT Discrimination
Twenty-two states, including California, have passed state laws prohibiting discrimination on the basis of sexual orientation. California is one of the 19 of those states that also ban gender identity discrimination. Recent reports indicate that President Barack Obama will soon sign an executive order banning federal government contractors from discriminating against lesbian, gay, bi-sexual and transgender (LGBT) employees and job applicants.

Age Discrimination
Discrimination, whether overt or suggested, can be costly.  An example is the case of Nickel v. Staples. Bobby Dean Nickel, 64, and a 9-year employee with good reviews, alleged that managers stated they needed to “get rid of” older, higher paid workers. When he refused to resign voluntarily, he underwent a series of false accusations and increasing levels of harassment, including being called an “old coot” and “old goat” in meetings.  In the trial earlier this year, the jury found in Nickels favor, awarding him $26 million, including more than $22 million in punitive damages.

Disability Accommodation
In May, in EEOC v. Ford Motor Co. the court held that the American Disabilities Act (ADA) may require an employer to permit telecommuting as a “reasonable accommodation” for a disabled employee, even if “attendance” is an essential job function.  The case involved an employee with irritable bowel syndrome who had asked to telecommute several days a week as part of her “reasonable accommodation.”

According to Gallup research, companies with highly engaged employees report 22% higher profitability,  37% lower absenteeism, and 48% fewer safety incidents. Clearly, making the effort to keep your employees engaged and motivated is good for business.

There are many factors involved in employee engagement, including communication, leadership, culture, recognition, challenging work, and growth opportunities. The one I’d like to talk about today is growth opportunities – giving employees a sense that they have room to grow, whether that’s improving their skills in place, or moving to the next level in their career path.

Many business owners shy away from career conversations with their employees because the company isn’t large enough to provide a “next level” or there just isn’t a budget for training. Yet avoiding the conversation could result in losing that employee (the #1 reason employees leave is for career advancement) as the employee looks for growth elsewhere.

Here are some easy and economical tips for providing growth for your employees (and thereby increasing their engagement).

Keep job descriptions current. Having clearly defined job descriptions for each job in the company is the first step in creating an environment for growth. Identifying and documenting skills and requirements will also help you with recruiting and hiring, performance management, and promotion decisions.

Create career paths, if applicable. For jobs where there is more than one level, be sure that your job descriptions define the additional skills, competencies and experience required for each level. This will ensure consistency in making promotions and help employees understand what they need to know or do to achieve the next level.  If there are clearly defined career paths, document them and share them with employees so they can see the opportunities.

Have the career conversation. Show interest in your employees and their aspirations by having a career conversation. You may find that they have under-utilized skills or interests that you could leverage elsewhere in the company, or call upon for a new project or business opportunity. The career path doesn’t necessarily have to be vertical; especially in smaller companies, providing cross-functional experience can be beneficial to both employees and the organization.

Tie career planning to performance management. Too often performance reviews focus on fixing what are perceived to be “weaknesses” even though the employee may not need or want to use those skills. Certainly if it’s a job related skill, development is necessary. But be sure it’s tied to the employee’s career goals and that you are also leveraging and developing their strengths. And remember that development doesn’t have to be formal training. Development comes in many flavors – mentoring, coaching, job shadowing, cross-training, reading, online resources, etc.

Follow up, follow through. Once the career plan is in place, follow up with the employee to check progress and follow through on what you said you would do to help in their development.

Demonstrating that you care, and showing employees that they have a future within your company is key to helping both your employees and your business thrive.

Although employees leave their jobs for a variety of reasons, it’s long been thought that the #1 reason was due to a bad relationship with their manager.  A recent survey conducted by LinkedIn, however, found that the #1 reason employees leave is because they want greater opportunities for advancement.

LinkedIn surveyed more than 7,000 people from five countries, including the US, UK, India, Canada and Australia.

Other surveys reveal additional reasons along that same theme: bored and unchallenged by the work; lack of opportunities to use skills and abilities; low meaningfulness of job; and management’s lack of recognition of employee performance.

We all know the high cost of turnover. But even if an employee doesn’t leave physically, without clear opportunities for career growth and development, many are just “going through the motions” and are not engaged in their jobs, or in the company. These partially or fully disengaged employees are also costly, both in direct costs related to productivity and in the indirect cost of low employee morale. A Gallup Report, The State of the American Workplace: Employee Engagement Insights for U.S. Business Leaders, indicated that “of the approximately 100 million people in America who hold fulltime jobs, only 30% are engaged and inspired at work.”  The other 70% are either not engaged (50%) or actively disengaged (20%).

So what’s the answer? Showing employees you care about their career goals and interests by creating development opportunities and clearly defined career paths is a great way to re-engage your employees and prevent your top talent from walking out the door. Next time we’ll talk more specifically about how to do that.

You’ve been working with the people on your team for three years, and now suddenly you’re their manager. Are you excited? Of course. A promotion is a step in the right direction. And are you somewhat nervous? Absolutely. Moving from coworker to manager adds an extra level of stress to the challenge of any new position. Here are some tips that will help make your transition smoother.

Meet with the team. The formal announcement of your promotion should come from HR or your manager. As soon as it does, however, schedule a meeting with the team to talk about the transition and allow some open discussion about concerns or issues. This will be your earliest opportunity to establish some authority and credibility as the manager, so be careful not to let this meeting turn into a gripe session. Focus on talking about your leadership style, what your expectations are of them, and what they can expect from you.

Pace yourself. As a team member, you probably noticed a lot of things you’d like to change, given the opportunity. Don’t make big changes too quickly. Based on input from the team, consider some quick successes you can achieve to help establish your credibility and team confidence.

Step back. You’ve probably established some personal relationships among the team. As the manager, you’ll need to step back a bit to avoid the appearance of favoritism. This will be especially important if there was someone else on the team who wanted your position and may harbor some resentment. If you know that someone else on the team wanted the position or was being considered for it, make an opportunity to have an open discussion with them to acknowledge their value to the team and enlist their support.

Get training. Take advantage of any leadership development opportunities offered and/or coaching from your manager. Find a mentor. Managing people has many rewards, and also many challenges. You can’t be expected to instantly know how to handle all of them. Leadership training and networking with other leaders will strengthen your ability to deal with issues as they arise.

Ask for feedback. Let your team know that you believe in two-way communication and are open to hearing their positive and constructive feedback. Creating an environment of honest, open communication is one of the best ways to succeed as a manager.

We often think that the natural next step for a star employee is to become a supervisor or manager of their own team. It’s the ultimate acknowledgement for a job well done, right?  Maybe.  Maybe not.

Often the criteria for these management promotions is merely knowledge of the company, knowledge of the function, and/or seniority. Although these are good reasons to acknowledge an employee, they don’t necessarily make for good leadership qualities. And in the absence of other qualities necessary to succeed in a management role, often result in less than optimal outcomes for both the employee and the company.

If you are considering promoting someone to a leadership role, put on your “recruitment” hat and evaluate that employee just as you would someone from the outside. Yes, their company and functional knowledge give them an advantage, but as they move into leadership those qualities will be secondary to their ability to influence, to make decisions, to manage conflict and to do all the other activities required of a manager.

Before you make that promotion, do the following:

1. Define the skills and responsibilities required for the role. What are the specific skills required for someone to succeed in the role? Think about the additional responsibilities of the team manager and then map those responsibilities to requisite skills. Be as detailed as possible, including budgetary responsibility, signing authority, key internal/external relationships for the role, etc.
2. Define the leadership traits and competencies required for this specific role. Consider the function, the members of the team, how the team fits into the overall organization. What aspects of leadership (e.g., leading through people, setting a vision, coaching) does the manager of this team need to have?
3. Now think about the person you are considering promoting relative to the skills, responsibilities and competencies you’ve outlined in steps 1 and 2. Where are the gaps? Are the gaps improvement areas that you are ready and willing to address? Is the individual teachable?

Once you’ve determined that the individual would be a good fit for the manager role, be sure you have a conversation to determine their interest. And be sure that once the promotion is made you put together a plan for leadership development and ongoing coaching and support for them.

Earlier this month I wrote about the benefits of hiring summer interns and the guidelines for determining whether the internship should be paid or unpaid. Now I’d like to go a little deeper and talk about the importance of the experience you give your summer interns.

Every person who interacts with you and your business is a potential advocate or detractor.  You know this about customers, but also keep it in mind when you are interacting with job candidates, temporary employees and summer interns. At the end of the summer interns will be going back to their respective campuses and relaying to other students (perhaps some of your future job candidates) the experience they had at your company. Be sure you make it a good one. Here are some tips for doing that.

Provide a mini “onboarding.” Take them on an office tour, discuss expectations, introduce them to the people they’ll be working with during their stay.  Remember that they may never have worked in an office before so confirm they know how to use the photocopier, printers and any other office equipment they may need to use.

Assign a buddy or mentor. Interns are there to learn, so by definition they will have questions. Assign an experienced employee within the department where they’ll be working to be the “go to” person for their questions and/or concerns. Be sure that person is a good representative of the company and the culture. Encourage the buddy/mentor to take the intern to lunch at least the first day, and to check in with them frequently during the first week when interns (or even regular employees!) often feel a bit lost.

Give them opportunities to learn about the company. Interns with a good summer experience can be your best “ambassadors.” Invite them to company meetings, as appropriate, “Lunch and Learn” events, and team meetings where they can observe business in process, learn about your products and services, and have a more integrated experience.

Create opportunities for them to learn about their chosen field. Help interns set up “informational interviews” with selected employees who can provide them with practical guidance and “lessons learned” from their experience in the field.

Make it fun. Consider hosting a barbecue or breakfast or other special event during the summer where interns can mix with other employees and management in an informal environment.

If campus recruiting is one of your workforce development strategies, providing positive, rewarding internship experiences is a great way to increase your effectiveness in the competition for new graduates.

A newly approved Commuter Benefits Program requires Bay Area employers with 50 or more full-time employees to offer their employees at least one of four types of commuter benefits.  Employers in the following nine Bay Area counties are affected by the requirement and must implement their selected options by September 30, 2014.

• Alameda
• Contra Costa
• Marin
• Napa
• San Francisco
• Santa Clara
• San Mateo
• Sonoma
• Solano

The goal of the Commuter Benefits Program is to reduce the number of single-occupant commuters by encouraging employees to use public transportation, vanpool, or carpool to get to work.

To comply with program requirements, affected employers must:

1. Designate a Commuter Benefits Coordinator. This is typically the person who handles payroll and benefits.
2. Select at least one of the commuter benefit options:

Option 1: Allow employees to pay their transit or vanpool fare using pre-tax dollars to the maximum allowed by law.
Option 2: Provide a transit or vanpool subsidy of up to $75/month.
Option 3: Provide free or low-cost commuter transportation service for employees.
Option 4: Provide an alternative commuter benefit that is at least as effective as Options 1, 2 or 3 in reducing single occupant vehicles.

3. Submit a registration form to the Bay Area Air Quality Management District (BAAQMD)/Metropolitan Transportation Commission (MTC) at 511.org.
4. Notify employees of the commuter benefit option to be provided and how to take advantage of it.
5. Update registration information annually.
6. Maintain accurate records of the program and provide program information to the Air District/MTC as requested.

Employer benefits identified from the program include potential payroll tax savings, enhanced employee recruitment, improved employee retention, reduced employee health costs, and reduced employee stress.