THE STRONGEST DEFENSE AGAINST WRONGFUL TERMINATION SUITS

In the midst of employment-related lawsuits, many employers find themselves defenseless against wrongful termination claims filed by former employees. However, there are ways in which employers can be diligent in thwarting off legal liability. A large part of protecting themselves from lawsuits involves examining their current termination procedures and taking a proactive approach to decrease the probability of a wrongful termination charge.

The basic step toward that approach is simple – documentation. Implementing a paper trail, or written record of performance issues, can often help to avoid a lawsuit altogether. Such documentation is evidence in support of a variety of employment-related decisions.

Here are some best practices to consider when establishing a paper trail system:

1.      Training. Employers may want to reiterate company procedures regarding the discipline process to their front-line managers and supervisors. All managers should be reminded to always document any disciplinary action taken, including verbal warnings. Formal training will help managerial staff to follow discipline and termination procedures consistently across the board.

2.      Policies and procedures. In order to uphold standard workplace procedures, the rules need to be clear, concise and enforceable. Therefore, it is crucial to have a well-written employee handbook that broadcasts the company’s policies, procedures, and standards. Two key policies as they relate to discipline, termination, and paper trail are that of standards of conduct and corrective action.

3.      Performance appraisals. For further protection against legal troubles, employers should ensure that managers give candid and uniform performance appraisals. Giving “unblemished” performance evaluations without communicating significant performance issues can weaken a wrongful termination defense. Doing so may communicate to employees that their performance is in line with company standards. Therefore, it is important for managers to reflect the areas which need improvement and openly discuss their concerns during the annual performance review. To assist with this process, a Appraisal-Coaching Worksheet documents both the employee and supervisor’s collaborative approach in achieving performance standards.

4.      Progressive discipline. Are employees given written warning notices regarding their poor performance or conduct? If the answer is “no”, then employers should understand that progressive discipline procedures need to be implemented when an employee’s performance is sub-par. Written evidence of the employee’s performance or conduct, documentation of meetings in which managers communicated performance problems to their employees, as well as records indicating the corrective measures that were taken should always be stored in employee personnel files.

5.      Coaching logs. Coaching sessions are a good corrective measure when an employee’s performance is not meeting company standards. When problems need to be addressed, the coaching log is a useful tool for managers to successfully document the plan for improvement. This log demonstrates managerial support and effort to correct the employee’s substandard performance.

6.      Grounds for dismissal. When an employee’s performance becomes severe enough that it is affecting the business, employers may have no choice but to terminate the employee. When termination occurs, employers should appropriately document the reason for the termination and include concrete evidence in support of their termination decision, all of which should be stored in the employee’s personnel file. Doing so may be instrumental in your company’s legal defense should the employee claim wrongful discharge.

Terminating an employee should never be taken lightly, especially since the procedures you follow throughout the process may come back to haunt you. However, administering a paper trail system that documents unsatisfactory performance or conduct – no matter how “great” or how “small” the issue may be – can help to safeguard any employer. Consistent, written documentation may minimize your risks as well as protect your best interests.

Trish Dougherty has greater than 25 years of successful leadership experience and is Senior Vice President & Principal for The Weston Group located in Sioux Falls, SD. Dougherty has a background in executive human resource management and is also a licensed Registered Nurse. Dougherty also served as an Officer in the United States Army Nurse Corps for 10 years. Dougherty travels and speaks nationally to assist small to medium size organizations with organizational effectiveness involving their most important asset – their employees. Trish can be reached at Trish@TheWestonGroup.com or 605-275-4747. http://www.thewestongroup.com/.

HOW TO AVOID THE 10 MOST COMMON EMPLOYEE HANDBOOK MISTAKES

We all know the importance of a well-written employee handbook: it helps to define company expectations regarding performance and conduct; it serves as a means of formalizing company rules so all employees are held to the same standards; and it provides general information about the organization as well as the benefits and services the company has to offer. There are a multitude of reasons for creating an employee handbook. But, if developed and implemented incorrectly, an employee handbook can do more harm than good.

Below are the 10 most widespread employee handbook mistakes and what you can do to avoid them:

1.      Failure to clearly publicize an employment at-will disclaimer. Employment at-will disclaimers make it clear that you, as the employer, do not intend to have the handbook construed as a “contract” or promise of employment. They protect employers from claims of termination in breach of contract claims. To be effective the disclaimer should state that nothing within the employee handbook is to be construed as a contract, that employment is at-will and either the employer or the employee may terminate the employment relationship at any time with or without cause, and that written or oral statements made to the employee are not to be interpreted to alter the at-will relationship. The disclaimer should be prominently featured in the handbook and written in large boldface type.

2.      Failing to regularly update your employee handbook. Creating an employee handbook and then letting it sit on the shelf would be a waste, right? Surprisingly this pitfall is all too common. Employee handbooks that are out of date and no longer consistent with company practices are useless - and may even leave the company susceptible to legal liability. Regularly updating your handbook will help to ensure that it remains compliant with applicable laws and that it is still meeting your needs. It’s recommended that employers review their handbook at least every 12-18 months to ensure compliance with current legal requirements.

3.      Not consistently applying policies. Administering a written warning, for example, to one employee because he or she has been absent three times within a month’s period, while terminating another employee for the same offense will likely be viewed as discriminatory. Policies are intended to ensure everyone is treated fairly and that all employees are held to the same standards. It’s important to train your managers to consistently respond to situations and to always follow company policy. Meet with company supervisors and educate them on the policies included within the handbook, the purpose behind each policy, and how the policies are to be enforced.

4.      Failing to obtain employee acknowledgment. Having a handbook is one thing, but holding your employees to the policies included within it is another. Handbook acknowledgments are important in order to ensure that all employees have read, understand, and are prepared to comply with company policies. The acknowledgment form should contain language that employment is at-will and that the employer retains the right, in its sole discretion, to modify, alter or amend the handbook at any time. Once signed, keep acknowledgment forms in employee personnel files.

5.      Ineffectively communicating the employee handbook. After spending the time developing an employee handbook, it’s important to also spend the time communicating its contents and purpose to your employees. Never assume that your employees will become familiar with your company handbook on their own. You should demonstrate the importance of the employee handbook as a communication tool by setting aside some time to discuss its contents with employees and answer any questions they may have. Because employees may have some apprehension with regards to its implementation, inform them that the handbook is intended to protect staff as well as the company. And remember, not only is the initial introduction of an employee handbook important, but so is the on-going introduction of the document to new employees. Be sure to incorporate a review of the employee handbook into your orientation practices.

6.      Leaving some wiggle room. Leaving too much to interpretation is never a good idea. Be sure your word choice is effective, your language is clear, and that the company is protected. If you are too vague employees may interpret policies differently than you intended. And should it come to this, the courts may side with the employee if he or she reasonably misinterpreted company policy.

7.      Being too specific. Just as being overly vague can be harmful, so can being too specific. It’s important to avoid exhaustive lists. For example, including a list of the behaviors that may result in disciplinary action is not recommended unless you state that the list is only intended to provide examples of the types of behaviors that may result in disciplinary action and that it is by no means exhaustive. In addition, employers cannot be expected to think of all circumstances and mitigating factors, so it’s important to include statements regarding managerial discretion of the policy’s implementation.

8.      Only focusing on federal requirements. Failing to take into consideration state-specific laws when developing your handbook could put your company at risk. Often time’s state laws provide for greater employee protections than do federal laws. For instance, many states have recently added sexual orientation as a protected class under their equal employment opportunity laws. If your state has included this provision, failure to state that you do not discriminate based on sexual orientation can pose a problem and leave you susceptible to discrimination claims. Make sure your employee handbook is geared toward your federal as well as your state requirements.

9.      Failure to promote the company. All too often employers use the handbook to communicate company rules and regulations, failing to capitalize on the opportunity to market the company. The employee handbook doesn’t need to just be a book of rules, put a positive spin on it! Let employees know exactly why it’s so great to work for you; clearly communicate company benefits packages and employee perks.

10.   Failing to write for the masses. Your handbook should be written on a level that all employees will understand. To ensure your staff is getting the right message, use language that is easily understood by all your employees; writing on a fifth grade reading level is recommended.

11.   Employee handbooks are excellent communication tools. But, when drafting a handbook, employers must be sure to exercise care. Factors such as word choice, policy selection, and the consideration of state and federal laws all affect your handbook’s clout. Don’t let these common pitfalls hold you back!

Trish Dougherty has greater than 25 years of successful leadership experience and is Senior Vice President & Principal for The Weston Group located in Sioux Falls, SD. Dougherty has a background in executive human resource management and is also a licensed Registered Nurse. Dougherty also served as an Officer in the United States Army Nurse Corps for 10 years. Dougherty travels and speaks nationally to assist small to medium size organizations with organizational effectiveness involving their most important asset – their employees. Trish can be reached at Trish@TheWestonGroup.com or 605-275-4747. http://www.thewestongroup.com/.

10 Most Common FLSA Mistakes--and How to Avoid Them

The Fair Labor Standards Act (FLSA) is a federal law governing minimum wage, overtime, and other wage and hour issues. It applies to nearly every employer and the Department of Labor (DOL) and other government agencies are increasingly focused on FLSA enforcement.

The provisions of the FLSA are not without complexity. Given the many requirements under the Act, we have identified some common FLSA mistakes and what employers can do to help avoid them:

1.    Improperly applying an exemption. The FLSA provides certain exemptions from its minimum wage and overtime requirements. These exemptions are narrowly defined and apply only to certain executive, administrative, and professional em­ployees, outside sales personnel, and employees in certain computer-related occupa­tions. These employees must meet very specific requirements; one's job title alone is not enough to make an exemption determination. Rather, the employee's actual job duties as well as his or her salary must be considered.

2.    Misclassifying an employee as an independent contractor. There are very specific requirements that must be met in order for an individual to be classified as an independent contractor. One test that can be used to make this determination is the Internal Revenue Service's common law test. This test examines the amount of behavioral control (e.g., who has control over how work is done), financial control (e.g., whether the individual has unreimbursed expenses or realizes a profit or loss from the working relationship), and the type of relationship between the employer and the individual (e.g., whether there are written contracts or employee-type benefits, such as health care or paid time off).  Employers must carefully examine the employment relationship before classifying an individual as an independent contractor and may obtain an official determination from the IRS by submitting Form SS-8: Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.

3.    Misclassifying individuals as unpaid interns. The FLSA acknowledges that not all persons who perform duties for an employer are considered "employees" and thus entitled to compensation. Interns, graduate assistants, and apprentices may be exempt from wage and hour laws so long as they meet specific criteria and can be considered "trainees" and not employees. In order to be classified as such, all of the following 6-factors must be met: (1) the internship is similar to training which would be given in an educational environment; (2) the internship experience is for the benefit of the intern; (3) the intern does not displace regular employees, but works under close supervision of existing staff;( 4) the employer derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded; (5) the intern is not necessarily entitled to a job at the conclusion of the internship; and (6) the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

4.    Failing to adhere to state requirements. Many states have their own wage and hour laws that may differ from the FLSA. Generally, where federal and state law conflict, the law that more generously benefits the employee must be followed. Be sure to check your state law before classifying employees as exempt, determining hours worked, calculating overtime, making a deduction, classifying an individual as an independent contractor, or taking any other pay-related action.

5.    Failing to pay for all time spent working. Nonexempt employees must be paid for all hours worked. Hours worked includes, but is not limited to, traditional work time, short rest breaks (5 to 20 minutes) if offered, and in some circumstances, time spent travelling on business. Time spent donning and doffing required work gear on company premises must also be paid. In addition, an employee who is on-call and is required to remain on the employer's premises or so close he or she cannot use the time effectively for his or her own purposes must also be paid. Training time must be compensated unless the training is outside normal hours, is voluntary, is not job related, and no other work is performed. Employers should also keep in mind that time spent working while away from the office, such as checking and responding to email while at home, is also considered hours worked for nonexempt employees, and must be paid.

6.    Permitting "off the clock" work. Employers are not permitted to ask or require a nonexempt employee to work "off the clock".  If an employee starts early or stays late, the time must be paid - even if an employee works overtime without prior authorization. Supervisors should be trained on the FLSA's requirements and be instructed that they are prohibited from requiring or allowing nonexempt employees to work off the clock.

7.    Failing to properly calculate "regular rate of pay". To calculate overtime, employers must determine an employee's regular rate of pay, which includes all remuneration related to their employment with the company, except certain payments that are expressly excluded by the FLSA. In determining the regular rate of pay, generally you must take into consideration the following: salary; hourly rate of pay; reasonable cost of employer provided room and board; tips; commissions; piece rate; nondiscretionary bonuses; on-call pay; and shift differentials. 

8.    Making improper deductions (nonexempt employees). Employers are not permitted to make certain deductions if it brings a nonexempt employee's pay below the minimum wage. Deductions that may not reduce a nonexempt employee's pay below the required minimum wage include those made for required uniforms, shortages in cash registers, tools used in the employee's work, or damages or theft to company property. This is an area that is often governed by state law. In addition to taking federal law into consideration, employers must be familiar with and adhere to their state requirements before making any form of deduction.

9.    Making improper deductions (exempt employees). In general, exempt employees must receive their full salary for any workweek in which they perform any work. Generally, the only instances in which employers may deduct from an exempt employee's pay include: (1) absences of one or more full work day for personal reasons other than sickness or disability; (2) to offset any amount of pay an employee receives for jury or witness fees, or for temporary military duty pay; (3) for penalties imposed in good faith for infractions of safety rules of major significance; (4) for unpaid disciplinary suspensions of one day or more imposed in good faith for serious workplace misconduct; or (5) in the employee's first or last week of employment if the employee does not work the full week.

10.  Neglecting recordkeeping requirements. The FLSA requires that certain records relating to hours worked and wages earned for nonexempt employees be retained for at least three years. This includes: total hours worked each work day and each workweek; total daily or weekly straight-time earnings; total overtime pay for the workweek; deductions from or additions to wages; total wages paid each pay period; and the date of payment and pay period covered. In addition, records that explain the basis for wage calculations (e.g., time cards, piece work tickets, and work schedules) must be retained for two years.

Employers must exercise great care in order to comply with the FLSA. While the above referenced mistakes are common, they can be avoided by ensuring all employees are classified appropriately, nonexempt employees are paid for all hours worked, and adhering to your state wage and hour requirements.

Trish Dougherty has greater than 25 years of successful leadership experience and is Senior Vice President & Principal for The Weston Group located in Sioux Falls, SD. Dougherty has a background in executive human resource management and is also a licensed Registered Nurse. Dougherty also served as an Officer in the United States Army Nurse Corps for 10 years. Dougherty travels and speaks nationally to assist small to medium size organizations with organizational effectiveness involving their most important asset – their employees. Trish can be reached at Trish@TheWestonGroup.com or 605-275-4747. www.TheWestonGroup.com

Smartphones and After-Hours Work: FLSA Considerations

A growing number of employers provide smartphones and other mobile devices to help employees stay connected to coworkers, clients, and their work. While this may be a boon to productivity, it can also create challenges for compliance with the Fair Labor Standards Act (FLSA). Namely, if nonexempt employees are using smartphones for work while off the clock, it may lead to violations of the FLSA’s pay requirements.

The following are guidelines for helping to create clear policies and procedures for after-hours work:

1.    Develop a written policy. If you provide smartphones to employees, you should have a written policy covering your rules and expectations on the use of these and other mobile devices. Specifically, the policy should address whether the use of mobile devices after hours is expected, required, permitted, or prohibited. To help ensure employees are aware of your stance on the issue, require all employees to sign an acknowledgment that they have read and understand the policy. The policy (like all other policies) should be enforced on a consistent basis.

2.    Consider providing to exempt employees only. Whenever possible, employers should consider providing smartphones only to exempt employees. This can help to alleviate pay concerns related to after-hours work, since exempt employees are generally paid a set salary regardless of the amount of hours worked. In doing so, take the opportunity to make sure that your exempt employees are classified properly. To be classified as exempt, employees must generally satisfy three tests: a salary-level test (the amount they are paid), a salary-basis test (how they are paid), and a duties test (the work that is performed). Before providing smartphones to nonexempt employees, analyze whether there is a strong business reason for doing so.

3.    Limit use to established business hours. If smartphones or other mobile devices are provided to nonexempt employees, employers should consider expressly prohibiting use of the phones during off-duty hours. To help enforce the policy, controls should be in place to restrict or prevent remote access to company systems during nonworking hours. Consider working with your IT personnel to limit and monitor remote access. Employers should also provide employees guidance on how they should handle situations in which they receive a call or email from a client, coworker, or supervisor during off hours (e.g., only read or respond in emergency situations). Another option is to require nonexempt employees to turn off company cell phones when they leave work or require the devices be left at the office.

4.    Require prior approval. Consider requiring nonexempt employees to obtain written permission from their supervisor before using their mobile device for work during off hours. This can help to limit the occurrence of after-hours work.

5.    Consider limits on personal devices. In addition to placing restrictions on the use of company-issued cell phones, employers should consider developing rules around the use of personal phones and computers to respond to work-related calls or email. Let nonexempt employees know that the use of personal devices to perform work-related tasks must be recorded as hours worked.

6.    Require strict recordkeeping. Employers must maintain accurate records of hours worked for all nonexempt employees. To this end, employees must be aware that checking work email is considered hours worked and that they are responsible for reporting all time spent working. If the regular timekeeping system cannot be used to record after-hours work, employees should be instructed on how to promptly report such hours.

7.    Mandate timecard approval. Nonexempt employees should be required to review and approve their timecards at the end of each pay period and notify their supervisor if there are any mistakes. This provides the employee with another opportunity to report after-hours work and can help ensure the employee is paid for all time worked.

8.    Compensate for all hours worked. Nonexempt employees must be paid for all hours worked, regardless of whether the employee works without prior approval. Additionally, if their hours exceed 40 in a workweek they are entitled to overtime pay. Violations of the company policy on after-hours work should be addressed as a disciplinary matter without affecting the employee’s regular or overtime pay.

9.    Train supervisors and employees. Training should address the company’s rules and procedures related to after-hours work and remind employees that such time must be reported. Supervisors should be trained to set realistic deadlines that don’t require after-hours work and to spot and respond to situations in which employees are working off the clock (e.g., the supervisor receives a report via email from an employee at midnight and the employee hasn’t recorded the time on his/her timesheet).

10.  Conduct regular audits. Hours worked, recordkeeping, and employee classifications should be audited on a regular basis. This review may include interviews with supervisors and employees, an analysis of remote-access logs, and an examination of company cell phone records.

Mobile devices have resulted in productivity improvements for many businesses, but employers must be mindful of the FLSA’s requirements. Controls should be put in place to help limit after-hours work and if such work does occur, employers must ensure employees are properly compensated.

Trish Dougherty has greater than 25 years of successful leadership experience and is Senior Vice President & Principal for The Weston Group located in Sioux Falls,SD. Dougherty has a background in executive human resource management and is also a licensed Registered Nurse. Dougherty also served as an Officer in the United States Army Nurse Corps for 10 years. Dougherty travels and speaks nationally to assist small to medium size organizations with organizational effectiveness involving their most important asset – their employees. Trish can be reached at Trish@TheWestonGroup.com or 605-275-4747. www.TheWestonGroup.com