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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.
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Poor Manager/Employee Communications:

 Is HBR Poll a Wake-Up Call?

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A recent Harvard Business Review article revealed the results of a Harris Poll that showed sixty-nine percent (69%) of managers feel “uncomfortable communicating with employees.”

I am sure this is no surprise to most people — since as employees, managers or human resources professionals we’ve all experienced one or both sides of an awkward, ineffective interaction.

The question is, what are you doing to address this seemingly pervasive problem?

Instead of shrugging your shoulders and attributing the problem to human nature, here are a few suggestions that are proven to help your managers become more effective communicators:

  1. Train your managers to give in-the-moment behavioral feedback.Many managers only know how to give criticism in 1:1 meetings or worse yet in annual performance reviews. The trend, especially with millennials, is to give feedback on the spot.

In the training, show how to give immediate feedback either in face-to-face conversations, text messages or by email with practical suggestions such as:

  • Feedback in person might be “Your creativity made all the difference!”
  • A text message with the ever-effective “Great job!” is generally appreciated.
  • Negative feed back in an email could read. “Your failure to show up at the team meeting this morning hurt the team.”
  1. Encourage senior management to lead by example.  If in-the-moment feedback is going to be part of your culture, top management needs to learn, it, apply it and reward it.
  1. Teach managers to focus on top performers– I am sure you’ve noted that most top performers take critical feedback to heart. Your management time is better spent with your best performers who will often thrive on suggestions and challenges for professional and personal growth.
  1. Consider letting go of performers who don’t respond favorably to feedback. At-will employment means that you can fire poor performers without giving warnings and improvement plans.  Make sure your employee handbook doesn’t make unnecessary promises of performance improvement steps prior to termination. Before termination, review your facts with a human resources attorney who may suggest offering a few weeks of separation pay in exchange for a release or may recommend a different approach if there is risk of a discrimination claim.