There is no time more fitting to say ~ Thank You ~

I appreciate your reading my blog posts and providing comments.
I wish you a Happy Holiday Season and a New Year of health,
happiness and prosperity.

As the year draws to a close, many of us are focused on finishing up projects and heading home for the holidays. As leaders, probably the last thing we want to deal with is employee relations issues.  But employee relations issues have no holidays, in fact, are often more prevalent – or finally coming to light – in the last couple of months of the year.  And they need to be addressed. Sooner rather than later.

Employee relations issues typically fall into four categories:

1. Legal issues such as workplace harassment or discrimination
2. Conflict between co-workers or employees and managers
3. Attendance issues
4. Disciplinary issues such as poor performance, policy violations and behavior problems

The first step is to identify the problem and admit there’s an issue.  If it’s been going on for a while, hopefully you’ve been documenting examples and impact.  If it’s a legal issue, work with your HR professional and legal counsel to follow the appropriate steps for resolution.  Do not let the issue fester until after the first of the year.  Unaddressed employee issues have a negative impact on employee morale and can damage your credibility as a leader.

The holidays are a joyous time for most, but also can be stressful.  Busy schedules, family gatherings or estrangement from family, crowded shopping malls, and various holiday obligations can make people cranky. This may play out in the workplace in the form of conflict between co-workers or employees and their managers. If you observe a normally even-tempered employee suddenly at odds with others, take some time out to have a one-on-one to discuss what’s going on.  It may be holiday stress or it may be a deeper issue. The key is to have a conversation to understand and resolve the conflict before it leads to a bigger problem.

There are many distractions during the holidays, not the least of which is checking off that gift list. This may lead to some lapses in attendance (either physical or mental!) Remind employees about the attendance policy – which should be clearly stated in your Employee Handbook – and apply the policy equally and fairly to all your employees.  When there’s an issue, deal with it promptly per policy.

Just as you want to finish up those projects before the end of the year, finish up any disciplinary issues that have not been addressed. Enable yourself to head home for the holidays with those issues checked off your list, and start the New Year with a clean slate.

Of course, the first step in preventing employee relations issues is having a comprehensive Employee Handbook that clearly states attendance expectations, company policies, grounds for termination and behavior guidelines. If you do not have an Employee Handbook or haven’t updated yours in awhile, contact me at Connect to HR at 408.768.1075 or connecttohr@yahoo.com.  It’s a great way to start the New Year!

The holiday season is a great time to give back to the communities where we live and work. At the same time, it’s an opportunity to develop team spirit by finding activities where you can volunteer as a group.  Here are a few local organizations that have a strong tradition of helping those in need, plus opportunities for both monetary and volunteer contributions.

Second Harvest Food Bank needs help packing and sorting the food it collects and provides to people in need in the community. This makes a great team event. Your employees may also want to help with food distribution.

You can also help Second Harvest by setting up a food drive at your office. This year some major corporations are promising additional donations when certain targets are met in the food drive campaign.

Another great team activity is volunteering at the Family Giving Tree warehouse.  Volunteers may help in gift receiving or sorting, gift wrapping, quality check, gift distribution or warehouse clean up.

Your company can also help by participating in the Family Giving Tree’s Holiday Wish Drive.  You display “wish cards” in your lobby and other public areas.  Each wish card describes an age appropriate gift for a child in need. Employees select the wish cards and pledge to provide the new, unwrapped gift by the due date. This year the due date is December 13.

Family Support Services has many families who are in need of basics – warm clothes, shoes, etc.  Family Support Services of the Bay Area will provide a list of needs for each family member plus some suggested “dream wish” ideas.

In addition, many people on the East Coast affected by Hurricane Sandy need our help and support.  The American Red Cross response to Sandy is very large. Financial donations help the American Red Cross provide shelter, food, emotional support and other assistance to those affected by disasters like Hurricane Sandy.  Your company can hold a donation drive or gather food, clothing and other needed items to help the Redcross’ relief efforts.  To donate, visit www.redcross.org or call 1-800-RED-CROSS.

Please comment if you have additional organizations and contacts where we can help this year.   Happy Giving!!!

As the end of the year approaches, it’s the perfect time to begin planning your benefits program for next year.  If you’re like most companies, you probably still are operating within a tight budget. And yet you realize that your employees have been working hard. You’d like to ensure that you retain your top talent and have programs in place to attract more talent as the need arises.  So what can you do? Here are  some ideas for no-cost and low-cost benefits and perks to consider.

• Direct deposit. Providing your employees with the option of having their check automatically deposited to their bank account saves them time and often results in additional perks from their bank for them.
• Credit union membership. There’s no cost to the company and many benefits to the employee.
• Amusement park/local attraction discounts. You can sign up at no charge as a company for employee discounts.
• Community hours. Offer your employees a certain number of paid hours off to spend in community service at their favorite charity or their child’s school.
• Wellness programs. Weight-loss challenges, group walks at lunch, activity-tracking competitions.
• Lunch & Learn events with guest speakers. For example, financial planners, estate planners, nutritionists, etc.
• “Green” initiatives. Ride your bike to work day, eWaste recycling, contests for the best “green” ideas.
• “Fireside chats.” Open forums with the president and management team  for employees to ask questions and learn more about the company and its direction.

And here are some additional ideas…

• Discounts through the company’s wholesale supplier
• Service Awards (5, 10, 20 years)
• Informal wellness programs and classes paid for by the company
• Paid membership for professional organizations related to the job
• Company sponsored lunches or socials
• Dry cleaning services subsidized by the company
• Free coffee, tea, fountain drinks, lunches

Benefits over and above those required by law contribute to the company culture, show the employees you care, and help in attracting and retaining talent.

Just a reminder that the General Election is Tuesday, November 6.  As an employer, you are required to give employees who do not have sufficient time outside of work time off to vote.  Here is the requirement according to the California Secretary of State website.

Employees are eligible for paid time off for the purpose of voting only if they do not have sufficient time outside of working hours to vote. The intent of the law is to provide an opportunity to vote to workers who would not be able to do so because of their jobs.

Voting hours are from 7am to 8pm.

Employees can be given as much time as they need in order to vote, but only a maximum of two hours is paid. Employers may require employees to give advance notice that they will need additional time off for voting. Employers may require time off to be taken only at the beginning or end of the employee’s shift.

When an employee terminates – whether voluntarily or involuntarily – there are a number of activities you need to complete to facilitate the transition for both the employee and the company, and to ensure that all legal requirements have been met.  These activities fall into four general categories: wage and salary; benefits; other forms; and company property to be collected. It’s a good idea to have a standard checklist that you use with every terminating employee to make sure you don’t forget anything.

As I mentioned last month, if you are terminating an employee for performance issues, be sure that you have written documentation that describes the issue(s), the steps taken to resolve the issue(s) 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, please speak with a California employment attorney when you are terminating an employee for performance issues.

Here are the items that need to be completed for all terminating employees:

Final payments:

• Final paycheck/stub. If you fire an employee you must pay them immediately. If an employee quits without notice you have 72 hours to issue their final check. If they give at least 72 hours notice you must pay them immediately on termination.
• Any outstanding expense reports must be paid on termination.

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

Other Items/Forms to provide:

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

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 items

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

As a best practice, if the employee voluntarily quits, you may want to conduct an exit interview to learn more about their experience at your company.

As a manager, dealing with employee performance issues may be one of your most difficult yet important leadership responsibilities. Because it’s difficult, many managers put off taking action (or avoid it altogether) hoping that the issue will resolve itself or the employee will leave. This delay can have a negative effect on team morale, customer satisfaction and the success of the organization overall.

Difficult tasks become easier when you approach them with a plan or process.  Here’s a 5-step process  for addressing performance issues.

1. Set clear expectations. Be sure that you have clearly communicated your expectations to each of your employees. This includes expectations related to their job duties as well as attendance, behaviors, interactions with others, status reporting, attire (if applicable), etc.  These should be documented in the Employee Handbook and job description, but it’s also your responsibility to ensure that the employee understands them. Clearly defined expectations will support your actions when performance issues arise.
2. Document and discuss performance. Giving regular, productive feedback to both your good performers and problem performers is essential. When there’s a problem, address the issue head on. Review your expectations with the employee and ask for ideas about how he or she can improve. Document incidents relating to the issue(s), including date, time, description and impact. If it gets to the point where you have to let the employee go, it’s essential that you have clear and timely documentation to support the termination.
3. Explore and evaluate the cause. Poor performance may be rooted in any of a number of causes. Perhaps the employee has some personal issues that are affecting his or her work. Maybe there’s a new aspect to the position that requires additional training. Or maybe the employee was just a bad hire.  It’s important that you have a discussion with the employee to identify the cause, and then determine the appropriate course of action.
4. Develop a plan. Once you’ve clearly conveyed to the employee that there’s an issue and have reviewed your expectations, it’s time to develop a plan.  The plan or PIP (Performance Improvement Plan) should be in writing and be focused on specific, sustained improvement. It should identify a time period for the initial improvement (typically 30 days) and state the consequences if improvement is not made and sustained.  Be sure to ask the employee for input on what he or she will do to improve. The employee needs to make the commitment. It’s also a good idea to set up checkpoints within the time period of the plan, for example, a weekly check-in during the 30-day period.
5. Take action. Once the plan is in place, be diligent about the periodic check-ins and ongoing feedback. Continue to document. Provide the appropriate praise and encouragement when you see improvements.

Of course, the optimal outcome is if you can turn the employee around and he or she becomes a productive member of your team. But we all know that’s often not the case. If the employee cannot improve or is not willing to improve or was simply a bad hire, then the best action for you, the employee and your organization is to let the employee go.

Next time: Completing the Termination Checklist

Do you have “independent contractors” working for you? Have you thoroughly researched and analyzed their relationship with your company to ensure they are contractors and not employees? Many employers see an economic advantage in hiring independent contractors versus employees.  With independent contractors employers do not have to pay payroll taxes, the minimum wage or overtime, or reimburse them for business expenses incurred in performing their jobs. Additionally, employers do not have to cover independent contractors under workers’ compensation insurance, and are not liable for payments under unemployment insurance, disability insurance, or social security. However, if you treat an employee as an independent contractor, it can be a very costly mistake.

Earlier this year California passed Senate Bill 459 adding a new Labor Code 226.8, which imposes penalties of from $5,000 – $25,000 for “willful misclassification” of an employee as an independent contractor. These fines are in addition to any employment taxes and insurance found owing.

There are a number of resources that provide guidance in determining the appropriate classification.

California’s Employee Development Department’s (EDD)  Employment Determination Guide provides a Worksheet on Employment Status that includes a battery of questions that will help you determine classification.  The IRS uses 20 factors to evaluate the validity of independent contractor classifications:

1. Level of instruction
2. Amount of training
3. Degree of business integration
4. Extent of personal services
5. Control of assistants
6. Continuity of relationship
7. Flexibility of schedule
8. Demands for full-time work
9. Need for on-site services
10. Sequence of work
11. requirements for reports
12. Method of payment
13. Payment of business or travel expenses
14. Provision of tools and materials
15. Investment in facilities
16. Realization of profile or loss
17. Work for multiple companies
18. Availability to public
19. Control over discharge
20. Right of termination

More information about each of these factors is in the IRS publication. As always, consult with your tax advisor or an employment attorney for specific questions about classifications.

Companies large and small struggle with the issue of whether to classify an employee as exempt, i.e., exempt from overtime, or non-exempt. A common misconception among employers is that if a person is salaried, rather than hourly, they are exempt, and thus not entitled to overtime pay. This is not true!  Whether a person is salaried or hourly is not the determining factor.  Another frequent misunderstanding about exempt vs. non-exempt has to do with titles.  Having a job title that appears to fit into one of the exempt classifications is not enough.

Also, California law differs from federal law in a number of areas. If you have employees in California, be sure you are adhering to the California Labor Code, because it provides broader protection for employees and thus trumps the FLSA (Fair Labor Standards Act).

Defining Exempt Status

In California, employees may be exempt from overtime pay rules if:

1. They are engaged in work which is primarily intellectual, managerial or creative, AND

2. They are paid a monthly salary equivalent to at least two times the state minimum wage for full time employees (40 hours per week)

Employees who meet these criteria are generally classified in one of the three exempt classifications: Executive, Professional, or Administrative. Unless a job falls into one of these exemptions, an employer must pay overtime. In California, non-exempt, hourly employees are entitled to overtime pay for any hours worked over 8 in a day and over 40 in a week.

Another important distinction between FLSA and the California Labor Code is that an employee must be “primarily” engaged in intellectual, managerial, or creative work for 50% or more of his or her work time.  California law focuses on the amount of time the employee spends on his or her specific duties, while the federal law focuses on the “primary duty” or the reason for which the employee was hired.

Another common misconception is that employees who are paid commissions are automatically exempt. This is also not true. Although there is an exemption for sales people who “customarily and regularly work more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities,” there is no exemption for inside sales people.

What Does This Mean to YOU?

Employers should keep in mind that in California if the employer fails to compensate an employee for overtime pay, the employer is subject not only to the unpaid wages, but to liquidated damages in an amount equal to the overtime wages, interest, the employee’s attorney’s fees, and costs.

Always assume employees are nonexempt unless they clearly meet the job duties of an exempt position and will earn at least two times the current minimum wage on a monthly basis.

How to Avoid the Pitfalls

I recommend thoroughly reviewing job duties and responsibilities vis a vis the provisions of the California Labor Code prior to classifying a position as Exempt or Non-Exempt. Also, the Department of Industrial Relations has a great website.  You can visit their site to learn more about overtime regulations in California.

If you are not experienced in determining exempt and nonexempt status, or if you are unsure about the status of a particular position, ask competent employment law counsel familiar with California regulations to review your determination.