Posts Tagged ‘employee administration’

“Clothing” Now Defined Under FLSA

Thursday, July 29th, 2010

In 1937, President Franklin D. Roosevelt passed the Fair Labor Standards Act (commonly referred to as the “FLSA”). The purpose of the Depression era legislation was to protect the individual employee against abusive employers and to ensure a minimum standard of living to the American worker. FLSA guarantees workers a federal minimum wage and overtime pay for employees who work over 40 hours a week.

Expanding FLSA Over the Years

Over the years, FLSA has been expanded to include other areas of employee protections, such as restrictions on employing children, and employee documentation and recordkeeping. In recent months, the US Department of Labor released an “Administrative Interpretation” (AI) to clarify the definition of “clothes” under the FLSA.

The Definition of “Clothing”

Currently, the FLSA excludes time spent “changing clothes or washing” at the start or end of a workday from compensable time, and the vague exemption has led to many lawsuits and conflicting court decisions on what constitutes ‘clothes.’ The AI provides clarity by stating that the time spent changing into or out of protective gear or equipment required by law, the employer, or the nature of the job, is indeed compensable.

The AI further clarifies that even if ‘changing clothes’ does not fall under a compensable activity or time, it may still trigger the ‘continuous workday rule’ if the subsequent activities after changing clothes would be compensable under FLSA, activities such as walking, waiting, or other travel time. Employers should review their compensation policies or practices to reflect this change to remain compliant with the law.

The guidelines covered by the FLSA can be confusing, and costly, if not adhered to. Speak with a CPEhr HR Consultant for an audit of your FLSA practices.

Source:  EPLI Pro News, July 2010

Maintaining Employee Benefit & Health Files – What You Need To Know.

Wednesday, April 14th, 2010

In our previous post, we discussed the importance of maintaining accurate employee files. A myriad of state and federal agencies  govern the maintenance of employee files, often with overlapping or contradictory requirements. In this post we will focus on employee benefit and health information.

Employee Benefits Data

The Employee Retirement Income Security Act, or ERISA, governs retirement and other employee benefits, and requires employers to keep records relevant to these benefit plans. For example, employers must keep all records supporting the data in summary plan descriptions, or SPDs. In addition, employers must retain annual reports for all benefits plans, including pension reports. Records should generally be retained for six years under ERISA, although records needed to determine eligibility for benefits should be kept as long as relevant.

The following documents must be kept for SIX years:

  • Cobra notices
  • Summary plan descriptions and earnings
  • Beneficiary designations
  • ERISA

The Family and Medical Leave Act

The Family and Medical Leave Act, or FMLA, allows eligible employees up to 12 weeks of unpaid leave in a 12-month period for qualifying medical and family reasons. FMLA has several recordkeeping requirements. FMLA can present an interesting scenario where we have files crossing over. If an employee requests reasonable accommodations or leave under the FMLA or CFRA regulations, documentation of that request should go in the personnel files. However, anything revealing specifics regarding the need must be kept separate in the employee health records. For example: if an individual has been absent due to an illness for 4 days and is returns to work, it is not uncommon to require a physician’s release. If the doctor’s note simply states “this individual is released to return to work with no restrictions” it can go into the personnel file. If however, it includes any diagnosis or indication of the medical health of the individual, it must go into the medical or health files.

As stated, employee medical or health records must be kept separately and confidentially in compliance with the requirements of the Americans with Disabilities Act for a period of FOUR years. Records may be kept on computer as long as they are available for transcription or copying

  • FMLA/CFRA
  • General documentation of requests go to personnel files
  • Specifics of medical need and reasons for requests including diagnosis should go to employee medical or health file

In our next post on the topic of record keeping, we will cover the complicated scenario of overlapping documentation requirements.

Disclaimer

Employee Record Keeping & Documentation – An Overview

Thursday, March 25th, 2010

Employee Documentation and Record KeepingThere are many federal laws and state requirements, ranging from the Fair Labor Standards Act to Title VII of the Civil Rights Act, that require employers to retain employee records.  In addition to maintaining employment files, accurate documentation will assist in addressing employment claims.  In this introductory post, we will touch on some “high level” aspects of employee record keeping and documentation. In subsequent posts we will dig deeper into this important, but complex, topic.

Most employment documents are required to be maintained for up to two years, which include:
•         Applications/resumes
•         Pre-employment tests/reference checks
•         Evaluations of interviews
•         Ads for open positions
•         Applicant or Employee files

There are additional documents that must be maintained for a longer period of time. Examples include:
•         Payroll records, time cards, and union contracts – 4 years
•         Workers’ compensation records, injury reports, OSHA documents – 5 years
•         Employee benefits records, COBRA, ERISA documents – 6 years

Documentation
While recordkeeping prepares you for employment claims, accurate documentation is vital in demonstrating proof of actions.  In order for documentation to work effectively, it must be detailed, focused on the facts and signed whenever appropriate.   For example, performance appraisals, written warnings, or any type of formal job performance evaluation.  These documents should be signed by both the supervisor and employees.   Here are some specific items that must be included in your documentation:
•         Name(s) of employee(s) involved in the event that warranted documentation.
•         Date and time
•         Type of violation/event observed
•         Specific details
•         Photocopy of any evidence-  Evidence may include time cards documenting an individual’s attendance, failure to sign time card or the manipulation of a time card.  Additionally, documents like a doctor’s note and requests for leaves may be evidence that proves useful to photocopy and retain.

There are common documentation errors that can prove costly to addressing an employment claim.  These errors include:
•    Documents not signed
•    Illegible handwriting
•    Overdue/late
•    Inaccurate information
•    Biased/unsupported opinions

In summary, record keeping and documentation are important when managing employees.  Feel free to contact our Human Resources Outsourcing firm with any questions regarding your current record keeping or documentation policies.

Disclaimer

Common Employee Documentation Errors You Can Easily Avoid

Monday, March 22nd, 2010

employee documentationThe world-wide mantra of Human Resources is DOCUMENT!  While potentially time consuming, you should always remember:  if an event is worth remembering, it should be written down. If it is not written down, it will be regarded as a non-event; as if it never happened. You do not want to find yourself in court, avidly stating that you spoke with an employee on numerous occasions, only to find yourself with no evidence to support your claim.

In upcoming posts we will review some of the key elements of a solid documentation practice. But to begin, we thought we should review some of the big DON’Ts of Employee Documentation.

Firstly, realize that there are common errors that do occur, often due to our busy schedule and our need to rush. Most mistakes are avoidable – documentation should never be rushed!

Common documentation errors include:

  • Unsigned or undated documents
  • Illegible handwriting
  • Overdue or late
  • Inaccurate information
  • Biased or unsupported opinions
  • Vague information
  • Inconsistency
  • Lies

These are common errors that can easily be eliminated.

Sign and date all statements that you write and make sure the individual signs as well if it is appropriate.  If an employee refuses to sign, either have a witness come in and sign that they witnessed the refusal or ask the employee to sign a line that states “they refused to sign the document”.

If it can’t be read it will only frustrate the situation, so remember: penmanship counts.

Don’t delay writing up recent events, as soon after they occur as possible. Delaying will only cloud your memory and weaken the validity of the account. Along those same lines, documentation that was written up days or weeks later than the event carry much less credibility and don’t shed a favorable light on the company or you.

Avoid all opinions and attitudes.  Along those same lines, be specific and don’t be vague.  If an employee needs to improve performance, specifically state how and why; don’t just say “they need to get better.”

Finally, NEVER make personal notes on any documents.  This includes resumes, applications, warnings, performance appraisals, you name it.  Employee documents and files can be subpoenaed in court, and while you many think the employee will never see it, it is altogether possible that a judge will.  And once written, don’t erase your comments – altering documents is against the law, including side-notes and handwritten comments.

These are just a few of the most common and easily avoidable documentation errors. Our next posts will look at Documentation Best Practices.

DISCLAIMER

8 Things You Need to Know BEFORE Rebuilding Your Workforce – Part 2

Wednesday, March 17th, 2010

Human Resources ConsultingIn yesterday’s post, we discussed the challenges employers will be facing as they begin rehiring employees into the workforce. We touched on four areas of which employers should be aware as they begin the hiring process -  Job Descriptions, Advertising, Screening and Applications. In today’s post, we will look at another four key elements:

  1. Interviewing
  2. Record Keeping
  3. Temporary Workers
  4. Layoffs and Rehiring

Interviewing. It is important to ensure that managers conducting interviews be trained in what they can and can’t say legally during the interview.  We recommend that at least two managers, or a manager and HR person, be present at all interviews. If an applicant calls later with a complaint, you have a witness for what was said. A set of interview questions that are used consistently for all applicants will help ensure that all applicants were treated fairly, and will assist you in determining the most qualified applicant.

Record Keeping. All of your hiring records should be kept for at least two years according to Title VII and Americans with Disabilities Act. This would include all applications of those not hired, advertisements, and interview notes. The Lilly Ledbetter Fair Pay Act has injected uncertainty into the duration of an employer’s record keeping requirements with respect to pay decisions. This guidance is based upon the noted statutory law. In this period of uncertainty, before destroying any documents related to decisions about an employee’s pay, we recommend you conduct an audit of your pay practices, and seek legal council.

Temporary Workers. Many companies, when they are unsure of their long term hiring needs, hire temporary workers. As the business needs are clearer, employers can shift to full-time hiring, or hire the temporary worker. Temporary or part-time workers can be a good option because the company is able to observe the employee’s job skills. However, hiring temporary workers can be costly because many temporary placement firms charge a substantial fee if the employer permanently hires the temporary worker.

Lay-offs and Rehiring. If you have been through a reduction in force, and are considering rehiring, there are a few considerations. In some layoffs, employees are terminated with an expected return date. For instance, many businesses layoff for the winter, and employees are rehired in the spring. This is usually the case when an employer operates under a collective bargaining agreement, or employs trade related employees. However, in our current economy, when the reduction in force is due to business slowdown, layoffs are generally considered final terminations. Unless you made a promise to recall an employee, you are not obligated to do so. You are free to go through the selection process, and choose the most qualified applicant. Be cautious to ensure there are no discriminatory reasons for not returning a former employee, or promises to the contrary, in which case, you would need to restore the prior employees.

Don’t go at it alone.

While the laws governing employment regulations, hiring and terminations are complex, you should realize there are valuable resources available to assist you along your employment travels. Consider engaging the support of a Human Resources Consulting firm, or a Professional Employer Organization. These firms are experts in employment law and can significantly help reduce your risk of making a bad employment decision.

(Source: EPLI Pro, March, 2010 Newsletter)

Disclaimer

Administrative Services Outsourcing (ASO) – A Flexible HR Service Option

Thursday, March 4th, 2010

Human Resources OutsourcingOur last post discussed the concept of “Co-employment” and the role of a Professional Employer Organization. Today we will look at an alternative to co-employment – the ASO.

Administrative Services Outsourcing (ASO)

There has been a growing interest in offering non-PEO services in recent years. Known as ASO (Administrative Services Outsourcing), this service model offers clients a full range of human resources consulting, insurance administration and payroll services, without requiring the establishment of a co-employment relationship. An ASO relationship is also more commonly known as Human Resources Outsourcing.

Our firm began offering ASO services approximately five years ago, after our sales force experienced challenges to selling co-employment. In some cases, the reasons were tangible concerns, such as a risky blue collar operation with bad losses which was declined workers’ coverage through the PEO, or a small employer with minimum-wage employees that did not meet our minimum contribution levels for health insurance, or a long-term broker relationship which dashed the sales process.

In other cases, the objections were less tangible, but just as real. Prospects could not completely grasp the co-employment concept, felt they would be losing control over their employees, or simply looked at the PEO industry with suspicion. Insurance agents, fearful of losing a commission, didn’t help the sale either.

Recognizing the value proposition a PEO offers to small business, but fearful that the co-employment requirements could hinder sales, we adopted a more flexible, customized approach to selling human resource services. The philosophy was simple – if we already had the in-house experts available to provide a valuable service to a business, why should we force the PEO box – and possibly lose a deal – if the co-employment relationship did not work for a particular prospect?

Full service HR in a flexible environment

In an ASO relationship, clients can either maintain their existing benefits and workers’ compensation insurance plans, or the PEO shops their insurances on the open market. The win-win is obvious – clients maintain control of their own plans, and other concerns about co-employment can be avoided. At the same time, they still gain access to virtually all the PEO’s services. For the PEO, it can charge administration fees commensurate with the services provided, and maintain broader “golden handcuffs”.

The multi-service approach offers the PEO sales staff greater flexibility when consulting and packaging HR outsourcing services. It also promotes a more customer-centric sales approach, as the sales consultant can walk into a first sales call with no preconceived end-game or one-size-fits-all philosophy.

Particularly in today’s volatile economy, many small employers are hesitant to engage in complex, long-term financial arrangements. By its very nature, co-employment is a more involved relationship that is hard to enter, and even more difficult to break. The current economic climate is another reason ASO may be considered a more attractive option for a businesses looking for HR support.

Keep your HR options open

If you are considering using an outside service to assist you with your Human Resources management, take some time to investigate the benefits of both ASO and co-employment. Chances are, one of them will work for your organization, and  you’ll be on your way to simplifying your business operations, reducing your HR risks, and cutting employment overhead.