Deep Breaths about Wage Theft

As of July 1, 2019, Minnesota’s new Wage Theft Law will go into effect.  If you read anything about this new law, it is easy to assume it places many, many new obligations on employers.  But, like many things, take a deep breath.  The new law isn’t nearly as onerous as you might think.

First, the new law requires employers to follow old laws.  Employers have to pay employees.  Employers have to pay at least minimum wages.  Employers have to pay overtime.   Employers have to have paystubs with a bunch of information on it that specific how the employee earned pay (pay period dates, what is regular pay, what is overtime, what deductions are for, employer name, address, and telephone number, etc.).  None of this is new.  What is new is the amount of penalties that accompany failure to follow these laws.  Those have increased and failure to follow the law could include very real criminal penalties.

Second, if you have offer letters, much of the new “notice” requirements are already in your offer letters.  Start date, how much the employee earns, basis of pay (salary or hourly), when employees will get paid (weekly, biweekly, twice monthly, etc.), exempt vs. nonexempt status, any commission structure (if applicable), what shift the employee is assigned (if applicable), PTO or vacation and sick time accrual, deductions to pay, employer address, and telephone number – these should already be in your offer letter.  The only “new” pieces are when the first payday will be, any allowances (like meals and lodging), and an offer to put the offer letter in a different language if needed.

Third, when employers roll out new policies, you need employees to acknowledge them.  Prior to the new law, employers could roll out new policies without employee acknowledgements.  Now you need them.  To avoid piecemeal acknowledgements, it may be best to review your handbook annually and when updates are necessary, require employees to acknowledge the changes all at the same time once per year.  More frequent changes are going to require more frequent acknowledgements.  This could be a bit of a pain to both do and track.

Fourth, when you change wages, employees need to acknowledge those changes too.  For example, if Jimmy is going to get a raise, you give him a writing (email, letter, performance review) that his wages are increasing and have him acknowledge the increase.  Again, most employers already do this, but now it is mandated by law.

That’s it!  The Wage Theft Law looks like it could be hard to comply with.  But, in reality, it is not as big of a deal as it has been made out to be.  Take a deep breath, you got this.

 

Photo by Pepi Stojanovski on Unsplash

Vote! Vote! Vote!

We’re one week away from the midterm elections.  All of the 435 House of Representatives members are on the ballot.  Thirty-six governorships are on the ballot.  Thirty-five Senate races are on the ballot.  A seemingly countless number of other statewide and local elections are on the ballot.  With this election, a lot is on the ballot.

Here are just a few of the issues on our ballots:

These issues affect our people.  Even if these issues don’t seem to directly affect Jimmy in Accounting or Juan in Shipping, our people are affected by them.  As HR people, we should encourage our people to vote.   We should expect that they might need time off to vote and that our state law may require it.  This year, a record 44% of employers will give paid time off to vote.  Isn’t that cool?

You also need to vote.  You may be able to vote early this week in your state.  Or take the time to vote next week.  Just vote, please.  Pretty please?  (Not that the appearance of the please should make any difference, but if it gets you to vote…)

 

 

Image by me just after early voting.

The First Three of Compliance

My small business clients give me skeptical looks.  I imagine that they are thinking “do I really need to worry about that?” or “my people will never sue me, they love me.” I love these looks because they show that my clients are balancing risk. They are weighing whether they need to worry about compliance (i.e. spend money on an attorney) against whether their failure to be 100 percent compliant will ever rear its ugly (and expensive) head.  I knock on wood with them that the ugly head will remain hidden while preparing for the worst.

No one likes to prepare for the worst, but often we have to.  For employers, the worst includes a lawsuit brought by an employee or an investigation by a government agency. Preparing for the worst includes spending just enough to be compliant and protect the business and its number one asset, employees.  So, for even modest resources, employers need to start somewhere to protect themselves.  Here’s what to start with:

  1. An employee handbook. Every employment lawyer will tell you that the employee handbook is one of the most important documents in any employment or labor law dispute. It is always an exhibit to a deposition. Besides its litigation importance, the handbook contains the most important policy that every employer must have – the harassment policy.   The handbook also describes the work culture both good and bad and sets employee expectations. It is an essential document no matter what type of business you’re in.
  1. Manager training. As I’ve said before, managers need to know enough. They need to know what their role is, what their responsibilities are, what’s in the handbook, and when they need help.  For the smallest companies (under 10 employees), this training doesn’t need to take more than two hours, but it should happen.  There are too many new laws (even the “blacklisting” kind) that could stop a small business from doing business if managers don’t know what they are doing.
  1. Performance management. I know, performance management is a huge topic.  At its core, performance management is simply setting expectations and holding employees accountable.  Large organizations spend millions on fancy apps and software, develop multi-step processes to bring automation and consistency to setting expectations.  Small businesses don’t need to do all that.  When you’re small, you can be more informal.  Set expectations, communicate those expectations, and measure employees against them.  Eventually, you may need to terminate someone for poor performance and if you haven’t set and communicated expectations, you expose your business to more scrutiny, including the lawsuit kind.

Of course, employers need to worry about I-9s, personnel files, proper classification of employees, sick leave requirements, and many, many other things.  But if we have to start somewhere, these three can protect an employer from many risks.  As business takes off, we can dig into all of those other areas.

By the way, my response to the looks is to be as straightforward as I can.  “I’ll help you worry a bit less,” and “Of course they love you, but everyone hires someone who could sue them eventually.”  I promise.

Image from Cindy Tang available at unsplash.com

A Shaky Relationship: FCRA & Data Analytics

This past weekend, the New York State Bar Association has asked me to speak about data analytics in human resources at their fall conference.  This is one of my favorite topics, particular since data analytics have a huge impact on HR now and will to continue to in the future. This post and many others in the future will cover data analytics, its impact on HR, and how compliance can get tricky with the technology.

Big data, data analytics, HR analytics, people analytics, talent analytics – no matter what you call it – is changing how HR operates.  Vendors, like Gild, Pocket Recruiter, HireVue, and many, many others, offer algorithm-based technology to make traditional HR pain points as simple as a few clicks.  In the few clicks and the algorithm itself lies the potential for violations of various employment and labor laws.

Let’s start with the Fair Credit Reporting Act.  FCRA governs consumer reporting agencies in how they gather and report on particular individuals, including job applicants, even when these consumer reporting agencies are collecting public information.  In the employment context, these reports include criminal background checks, credit checks, and even social media searches when the reports are compiled by third parties and provided to employers.

In order to gather the information and get authorization from a job candidate, employers must follow strict disclosure requirements, give candidates notice that a report will be generated, and provide avenues for candidates to dispute information they believe is inaccurate.  Simply put, it can be incredibly easy to run afoul of FCRA.

One data analytics vendor, Joberate, has created an algorithm that takes publicly available data, like social media usage, and allows recruiters to determine whether a particular candidate could be interested in a new job.  Joberate generates a J-Score that can tell a recruiter whether an individual is in engaged in job-seeking behavior – the more job-seeking behavior, the more likely the individual would be interested in speaking with the recruiter.  By knowing individual J-Scores, recruiters aren’t wasting their time contacting passive candidates who aren’t really candidates at all.  They can be focused only on individuals who are ready to make a career change.

So what does FCRA have to do with this?  Potentially, a lot.  When a third party does any kind of search that includes information that may “serve as a factor in determining a person’s eligibility for employment” and gives that information to an employer, the Federal Trade Commission takes note.  Whether an individual is truly engaging in job seeking behavior may be considered a factor on whether a recruiter reaches out to that particular candidate and whether the individual is considered a candidate for employment.  So does an employer violate FCRA by using Joberate?

Loving Your Managers Means Training Your Managers

Last week, I had the privilege of presenting to two different groups on two very different topics.  The first was for the Marsh & McLennan Agency on the Bermuda Triangle of employment law – FMLA, ADA, workers’ compensation, and other leave issues.  The second was at MRA’s Minnesota HR Conference on investigations into sexual harassment and workplace bullying.  Both groups had great questions and were super fun.  Yet, even though the topics were different, one issue cropped up in both – manager training.

Manager training is crucial.  Managers are on the front line of production, products, marketing, and many other business aspects of any organization.  They are also on the front line of employment law issues.  For example, a manager who denies an employee’s request to alter her shift due to insomnia issues could be launching an employer headfirst into an ADA claim.  Or, a manager to engages in sexual banter with employees could create strict liability for a sexual harassment claim.  These exemplify why this training is downright essential.

Yet, it is hard to get managers together to learn about compliance issues.  First, they’re busy people.  Second, it’s compliance.  And, even when you do get them together and try to (gently) beat these issues into them, more often than not, they may forget or cannot recall the ins-and-outs of FMLA leave or the intricacies of your benefit plan.  This isn’t because managers don’t want to remember all of this information – it would just be impossible to do so.  They’re human.

Instead of rote memorization, managers need to know enough – enough to know when they need step into a situation and enough to know who to talk to.  This is all.

So how do you get to enough?  In my humble opinion, it takes real world examples and lots of time for questions.  With simulations and questions, managers get some experimental learning so they can identify when they need help.  It’s kinda like giving managers spidey sense.  As soon as they see, hear, or otherwise learn about a situation, we want manager’s spidey sense to go off and know what to do and who to talk to.  Good training can do this.

Here are the key ingredients for an effective manager training:

  • Managers need to understand their roles and responsibilities to prevent and stop inappropriate behavior (even if that behavior wouldn’t technically be unlawful).
  • Managers need to know enough about compensation, benefits, and other privileges employees may have (think leave and reasonable accommodations) to answer basic questions.
  • Managers need to know how to explain performance and conduct expectations and how to seek improvement of both.
  • Managers need to know who to talk to when issues arise and who to send employees to when they have questions the manager can’t answer.

Managing is really hard.  Employers succeed when they recognize this and equip managers with the training and development they need.

Photo credit: Helloquence available at unsplash.com