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LAYOFFS AND LAWSUITS

bully-3233568__340ARE YOU READY FOR AN ECONOMIC SLOWDOWN?

Although economists have been wrong in the past, this time it seems as if the majority of market observers are predicting a slowdown in the economy. What should business owners be doing to get ready for a potential downturn in business?

Historically, downturns often mean layoffs. One of the most important steps you can take now is catching up on performance feedback. Why the emphasis on documenting performance feedback?

If you’re going to use performance as a factor in determining who’s going to lose a job, you have to be able to demonstrate that performance issues have been documented. It’s a major defense against the discrimination charges that are often filed post-RIF’s.

Lack of documentation is a major problem

When preparing a defense, employment lawyers complain that 80% of the time there is no supporting evidence in the personnel or manager’s file. How can you show the appropriate performance designation if you don’t have any written records? Sometimes verbal records can be useful, but it is much more difficult to win with verbal records.

When you think about it, you can see why individuals file charges when they are told they were selected based on poor performance—yet they believe they were never given any negative feedback.

Performance documentation made easy

If your employee records don’t currently include performance documentation, here’s a technique you can use to augment them quickly:

  1. Hold a performance assessment meeting with your managers.
  2. Designate someone to take notes as each manager cites specific examples of both positive and negative performance for each employee.
  3. Managers should then sit-down with each employee to give the feedback coming out of those assessments.
  4. Senior management should follow up to make certain the feedback was given and understood by the employee.

Smart policy in good times and bad

The benefit of applying this process isn’t limited to avoiding lawsuits. Employees who receive positive feedback are often inspired to do even better. Clients who have followed this recommendation report improved performance all around.

 

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Are You Giving Dads the Bum Rush?

downloadThink that dads deserve the same amount of time for parental bonding leave as moms? If you answered “no,” it’s time to review your parental bonding policy. The EEOC recently announced that that practice of giving moms more bonding time is discriminatory.

Employers are required to grant fathers equal amounts of paid parental leave.

Many employers grant more leave to mothers based on the generally held assumption that mothers need more time to bond after the birth of a child. There’s no science to justify that belief.

This announcement also discussed modified work schedules—given to ease the transition to work after the arrival of a new child— and said that when such schedules are only offered to mothers, the employer violates the law.

Mindy E. Weinstein, acting director of the EEOC’s Washington Field Office said, “This settlement ensures that {the Employer} will provide equal opportunities for time off to new dads and new moms, which is what the law requires, and what makes sense for families.”

So, take a look at your parental leave policies and practices to see if you are giving moms and dads equal treatment. If not, take the time to update your company documents so that you are meeting this standard. Questions? Contact me by calling 650.518.0327 or by email at judypearce@hrlegalresults.com.

Employee or Independent Contractor?

downloadHow the California Supreme Court Leans

If you’ve been reading recent HR and employment law newsletters, you know that the California Supreme Court just cracked down on employers who classify individuals as independent contractors­—as opposed to hiring them as employees.

The newsletters describe the new stringent “ABC “test necessary for employers to prove to defend their classification of an individual as a contractor.

Under this new ABC test, a worker will be presumed to be an employee unless the employer provides proof of all the following prongs:

  • (A) That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
  • (B) That the worker performs work that is outside the usual course of the hiring entity’s business; and
  • (C) That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

Evaluating the Risk

The government’s interest is in collecting taxes and protecting employees by requiring workers’ compensation insurance. That is why the presumption is that an individual is an employee. Given the new stance of the Court, now it will be far more difficult to prove the independent contractor classification.

In the past, when asked if an individual could be classified as an independent contractor, I answered that the person was probably an employee. In light of this ruling, that advice is doubly true.

Whatever savings you achieve in benefits, overtime, and taxes, they pale in comparison to the fines and legal costs you’ll face if you don’t have the “ABC” proof necessary to defend your decision.

Sexist, Racist or an All-Around Jerk?

During a recent investigation of a hostile environment claim, I asked whether the boss in question treated people differently based on sex or race. She said, “No, he’s an equal opportunity jerk. He mistreats everybody.”

She went on to say that the boss ridiculed people by publishing negative, mean-spirited performance feedback emails copied to the entire staff. She also said that he micro-managed her so much that she was unable to carry out her assignments­—particularly because his directions were often internally inconsistent. As with many hostile work environment claims the “jerk” is typically the owner or CEO of the company. What is HR or the Board to do?

In many situations, there is legal liability associated with the boss’s actions, and then legal counsel’s warnings can change behavior. But more and more I am receiving complaints that are more like bullying and less like harassment of a protected class. The California legislature made a finding that bullying or abusive behavior reduces productivity and increases stress at work but a cause of action has not been created. Some legal practitioners predict that bullying claims will be deemed actionable in the near future.

So, the question remains: what to do with the equal opportunity jerk today? Some solutions include

  • Explain to the bully that abusive behavior can infect the whole organization, starting with wasted time exchanging stories of mistreatment to and ending with dealing with emotional issues-like crying.
  • Bullying can also lead to top performers resigning to find more pleasant work environments—even the ones who aren’t be subjected to mistreatment leave.
  • It can’t hurt to tell the bully that the times are changing and what used to be tolerated is becoming a liability. You could say, “Why not start early getting rid of the behaviors that are increasingly risky in terms of liability?”

Any thoughts or suggestions?

 

Good & Bad News: Recent Rulings on Abusive Work Environments

searchIf you’ve ever dealt with litigation over workplace stress, you’ll be glad to know that the court doesn’t always side with the employees. Here are a couple of examples:

  • Some times referred to as the “Goldilocks decision”, the first case involves a plaintiff who requested an accommodation of a less stressful job. The transfer was allowed. The employee didn’t find the transfer to be interesting enough so asked for the accommodation of a transfer to a middle-of-the-road stress job. The court held that it was not reasonable to ask for a “just right amount of stress” job.
  • In November of last year, a Florida District Court decided that an employee cannot immunize herself or himself from stress and criticism in general. In this case the employee had requested an accommodation from a supervisor’s “hostile confrontations.” The court commented that the obligation to make a reasonable accommodation does not extend to providing an “aggravation-free” or “peaceful calm” environment.

Yet, it’s not all good news. California employers continue to deal with hostile environment and constructive discharge claims arising out of what is described as “bullying.”

The courts have made it clear that the manner of conducting discipline rises to the statutory definition of abusive conduct when the discipline is “harshly and constantly criticizing” of one individual. Public criticism of an employee often is seen as unprofessional and stress producing.

On the other hand, most states have uniformly found that stress claims arising out of disciplinary action or performance improvement plans are not covered under workers’ compensation law.

A Case in Point: An employer recently allowed an employee who was the vice president of finance to work at home. The VP’s job required her to be available for on the spot determinations regarding cash flow. The employee said that she suffered from an anxiety disability and requested an accommodation that she be given 15 minutes time before responding to telephone requests for cash flow estimates. It would seem that this would not be a reasonable accommodation because it would reduce the company’s ability to compete. Nonetheless the employee filed a lawsuit.

Although this seemed like a frivolous claim, the company narrowly avoided bankruptcy given the huge legal fees they were forced to pay.

Clearly these doctrines are in conflict. How are employers supposed to navigate these murky waters when legal authority is uncertain?

So, what is learned from this? It’s important to train managers to run to the HR department whenever the word “stress” crops up. Additionally, managers should be trained that discipline should always take place in private. In our society, yelling at an employee in front of coworkers is thought to be abusive.

Reduce risk by always engaging in an interactive process when an accommodation is requested. At these sessions, employees can learn what the rules require—and what they don’t­—in terms of reasonableness of requests. Make sure they know that a Goldilocks accommodation is not reasonable.

Finally, in job interviews and in job descriptions it should be clear that some jobs involve pressure. Employees should be aware that the ability to handle pressure and ambiguity is a requirement of the job.

Your “Culture” Statement: Is it Inspirational or Demotivating?

Wit240_F_55079262_fgBBx7Q5ETfLObYEmAc23ls4qBtETD7yh the best of intentions many employers craft, edit and perfect culture statements full of noble principles, only to then have them ignored or used as the butt of ongoing jokes. Why?

There are a variety of reasons. Some of them include:

  • Employees know the HR consultant wrote it. Senior management hasn’t really bought in and won’t play by the same rules.
  • The values promoted don’t transfer into actual behaviors employees have seen in action.
  • Employees whose workplace behaviors fall short of the cultural ideal get rewarded with bonuses and promotions anyway.

What to do? Start by making sure your values are framed in terms of well-defined behaviors. For example one company has the Core Value “Embrace Change.” In behavioral terms this could be phrased “Deals successfully with ambiguity and change.”

To be sure your values are put into action, make sure all performance feedback includes implementation of core values and behaviors. Then, don’t reward performers who aren’t walking the cultural talk.

Finally, develop your culture statement within your management team with input from a task force of employees. If you just slap standards designed by an outsider into your handbook, it is often received with skepticism—as it should be. It doesn’t take a lot of time to develop a cultural behavioral statement, so why not put in a couple of hours to have a culture your employees will respect?

 

Disability Leaves of Absence: What’s an Employer to Do?

 

240_F_74851918_9o2xEnk7PIsyrql75atgQWLiG0BZ7FS7Implementing the regulations that cover leaves of absences for disabled employees can be challenging for many small companies.

A recent publication from The Equal Employment Opportunity Commission (EEOC) provides some guidance on how to resolve these thorny issues. The report is at https://www.eeoc.gov/eeoc/publications/ada-leave.cfm.

If you don’t have time to read it, here are some highlights:

  • Don’t require employees on leave to report in regularly. A phone call from you shortly before return date is OK particularly if it is to talk about reasonable accommodations.
  • When it comes to reasonable accommodations, don’t rely on a maximum days of leave policy that applies to all employees. It may be reasonable to give many more days than your maximum as an accommodation.
  • If you don’t require a doctor’s notes for ordinary illnesses, like the flu, then you can’t impose such a requirement on people with disabilities. Conversely it is OK to require a doctor’s note for all absences of three days or longer so long as it applies to all
  • When you are doing performance reviews based on productivity, don’t include the period when an employee is on disability leave of absence.
  • Leaves of absence that are open-ended or provide no return date remain unreasonable.
  • Policies that require an employee to be “100% healed” before being returned to work probably violate the Americans with Disabilities Act and some state disability discrimination laws.
  • Always participate in an interactive discussion about leaves of absence and reasonable accommodations upon return to work.

Questions? I’m always happy to consult. Please contact Judy Pearce at 650.518.0327 or by email to judypearce@hrlegalresults.

What’s next for HR – The Spanish Inquisition?

A recent appellate court held an HR director personally liable for her actions under the FMLA. Showing again that courts are oblivious to how difficult it is to interpret the FMLA in real life. Could jail time be the next punishment when company decisions are disputed?

This is a completely unreasonable punishment. In reality, even employment lawyers, when asked to divine how to interpret the FMLA, admit they usually ask a colleague for a second opinion before rendering advice to HR professionals!

KPMG Abandons Employee Engagement Surveys: Throwing Baby out with the Bath Water?

This month the employee engagement survey bandwagon stumbled when a long time proponent of employee engagement — KPMG— reported that all of their employee engagement efforts had not resulted in increased performance. KPMG decided to forego the employee engagement survey.

What are employee engagement surveys? They vary. Some HR Departments retain consultants to perform what I call the “lovey-dovey survey.” These surveys ask questions such as “Do you like your coworkers?” and “How do you feel about your employer?”

A different type of employee engagement survey asks questions like “Does your manager listen to you?” The downside of this kind of survey is that it often creates employee expectation that if managers don’t listen, the company will take action!

Some consultants implement employee engagement by looking at measurable results. One company successfully used employee engagement efforts through a pilot. The test group showed a 54% increase in comparable store sales.

So this begs the question, are companies throwing the baby out with the bath water when they abandon employee engagement including this pilot that actually has measurable results?

KPMG is implementing a program of in the moment performance feedback. This is much appreciated by the experienced employees who don’t feel traditional annual employee reviews are motivating.

But how will the Millennial react? Millennials have been brought up with the accolade “good job” for every action they take. They received trophies in sports just for showing up and no special reward and feedback was given to the best players. Experience with the “specialness” of Millennials has influenced some companies to get rid of any comparative feedback and they’ve abolished performance reviews all together.

Going forward, as companies like KPMG re-introduce measuring performance instead of relying solely on measures like “Great Place to Work” contests, HR and management will have to design motivating feedback mechanisms for all of their diverse employee populations. Baby boomers and Millennials are not motivated identically.

The decision making should evaluate keeping the employee engagement methods that have proven to result in measurable performance gains­ while getting rid of the surveys that focus only measure employee satisfaction without corresponding gains in productivity.

Myth: Only Big Companies Get Caught For Overtime Violations

Myth Busted: Small business owners forget that disgruntled employees can make claims for wages before the Labor Commissioner— without hiring an attorney— and more often than not they can recover a lot of money.

In the last six months I heard about two small employers whose employees became dissatisfied and went to the Labor Commissioner. The employer with four employees had an award of about $40,000 against it. The employer with 18 employees had to pay about $25,000. Now it is defending similar complaints from the other employees who were also denied overtime.

Suggestions for Reducing Risk

  • Don’t rest on the idea that all of your employees love you and they would never turn against you. Sadly it happens much more frequently than you think.
  • Get realistic human resources and legal advice about how the Labor Commissioner rules on overtime claims before you make your decision as to who will be paid overtime. In practice these agencies find against employers far more often than finding in favor of the employer.
  • Pay overtime from the get-go. The law permits small business owners to manage the payment of overtime. Many business owners find they actually increase productivity and save money through a closely-managed overtime program.