While there are no laws against bullying, there are claims of unlawful conduct that protect employees from behaviors that may be the result of bullying such as: Discrimination, retaliation, invasion of privacy, emotional stress and defamation of character. In April 2008, the Indiana Supreme Court upheld a verdict of $325,000 against workplace bullying. The plaintiff claimed assault, intentional infliction of emotional distress, and tortious interference with employment. Researchers have found that workplace bullying is more harmful than sexual harassment. As published in the American Psychological Association, twenty five percent of targets (people being bullied) and twenty percent of witnesses leave their jobs, because of workplace bullies.

The Financial Impact of Workplace Bullying

The financial loss to an organization starts before an employee (who was bullied) resigns. Leading up to the resignation, the organization’s day-to-day operations will suffer and negatively impact the bottom-line due to an increase in absenteeism, low morale, decline in performance/productivity, time spent by management to investigate, organization’s PR, health care cost and legal fees.

One may wonder, if bullies are so costly, why are they in the workforce? According to West, the number one reason that bullies are in a workplace is because the employer lets them get away with bullying. By not directly addressing their behavior and ensuring that it changes, a bully will continue to create an uncomfortable environment for others. Characteristics of a bully may include:

• Belittling opinions
• Aggressive voicemails/phone calls
• Ignoring /interrupting others
• Rolling eyes/threatening posture
• Humiliating/intimidating others

Here Are Ways to Create an Environment Free from Bullies:

1. Institute Organizational Core Values – Ensure that every member of the organization follows them.
2. Create a Policy against bullying that includes an anti-retaliation clause.
3. Investigate all reports of bullying.
4. Don’t Ignore Claims
5. Train Your Staff- Make workplace bullying a part of your Sexual Harassment training and train on Respect in the Workplace and Conflict Resolution
6. Reward deliberate acts of kindness
7. Conduct Exit Interviews- Find out why employees are leaving
8. Track Turnover Rate by department and manager

If you have been a target of bullying, or are aware of aggressive employee behavior, please contact a Human Resources Consulting firm for further guidance.

Source: “The Bully and the Bottom- Line” Workshop Allison West, Esq., SPHR at the HR Star Conference, 2010

DISCLAIMER

Employers will likely encounter large applicant pools due to the number of currently unemployed individuals. This will pose challenges for screening applicants to ensure you find the right employee. Also with many applicants competing for few jobs, there is the increased possibility of claims of discrimination, as many of those who were laid off during the recession may be in protected classes. Applicants that have been in the job market for awhile can be more challenging. For instance, we are seeing an increase in applicants calling back after being turned down for a job saying, “I felt like the interview was going well, until the interviewer asked about —. I think that is why I wasn’t selected.” This makes it all the more important for employers to develop a recruitment plan for finding the right employee. The plan should be consistently followed in order to document the reasons for selecting an individual applicant, and the reasons why others were not.

In this and following posts, we will review the following areas:

1. Job Descriptions
2. Advertising
3. Screening
4. Applications
5. Interviewing
6. Record Keeping
7. Temporary Workers
8. Layoffs and Rehiring

Job Descriptions. The job description is the first step in the recruitment process. A good job description accurately reflects the essential functions of the job. It should include the skills, knowledge, qualifications, and experience required. It is important to include the physical requirements of the job to evaluate applicants with disabilities. An applicant with a disability, like all other applicants, must be able to meet the employer’s requirements for the job. A good job description can assist you in this process of evaluation.

Advertising. Describe the position in the advertisement consistent with the job description. Consider placing key criteria for selection in the advertisement to assist in the screening process. Avoid terms that would have a discriminatory affect, for instance “energetic, young, professional”. You may want to consider local workforce development organizations that work with displaced workers. They may have programs that will assist you in the screening process. Maintain a copy of all advertisements as part of your hiring records.

Screening. The screening process for a large applicant pool can be overwhelming. Consider phone interviews to help sort through resumes or applications. Many employers also use pre-employment testing. While testing tools can assist you in determining the most qualified applicant, they can violate antidiscrimination laws. Therefore, employers should consult a professional before using personality tests or other standard tests, as they might not be in compliance with the law for certain positions. Tests that are generally accepted if applied to all candidates for a position are typing, computer skills test, or job task demonstrations. For instance, if lifting is required, you can ask applicants to show they are able to lift the necessary weight.

Applications. Ensure that your employment application is legal and accurate. You should have a question about criminal convictions with appropriate legal limitations, whether the employee can perform the essential functions of this job – with or without reasonable accommodation -, and can they meet the attendance requirements of this job. An application that complies with federal and state laws is available on our website.

In our next post, we will review Interviewing, Record Keeping, Temporary Workers and Layoffs & Hiring.

(Source: EPLI Pro, March, 2010 Newsletter)

Disclaimer

According to Fulbright’s 6th Annual Litigation Trends Survey Report, companies are seeing a litigation wave that is expected to continue to swell in 2010.  That expectation is based on experiences during 2009, when 83% of respondents reported that new litigation has been commenced against their organizations, up from 79% in 2008.  Stephen C. Dillard, head of Fulbright’s global litigation practice, states:

Generally, litigation rises in an economic downturn as regulators tend to step up enforcement, laid-off workers head to court, and companies need to file more suits in order to collect money owed.

Employment litigation is expected to increase in 2010.

The poor economic conditions and increased layoffs, coupled with new laws and expansion of existing laws, are likely to lead to an increase in claims filed.  According to Rich Meneghello, the managing partner in the Portland, Oregon office of Fisher & Phillips, “all signs point to the trend [of increased litigation] continuing into 2010, especially as job growth remains stagnant and out-of-work individuals seek rewards through litigation”.

Increased enforcement by the Department of Labor.

Experts are also anticipating an increase in enforcement by the Department of Labor.  Secretary Solis said in a release, “In early 2010, the department will launch a national public awareness campaign titled ‘We Can Help’ to inform workers about their rights…  We will not rest until the law is followed by every employer, and each worker is treated and compensated fairly.”  The Department of Labor is scheduled to receive $13.3 billion in funding for 2010, an increase of $121 million from the previous year.  According to a DOL press release, “with these increases, [DOL’s] worker protection agencies will be able to vigorously protect wages and working conditions of the 135 million workers in more than 7.3 million workplaces.”

Additionally, the EEOC is slated to receive $367 million in funding for 2010.  This represents an increase of $23 million from the previous year.  The increase in funding may lead to more lawsuits alleging discrimination based on age, gender, race, color, national origin, religion, or disability.  The EEOC’s proposed regulation to implement the ADA Amendment Act of 2008 would make several significant changes to the definition of ‘disability’, greatly expanding who is covered by the statute’s provisions.

Be proactive to reduce the risk of lawsuits.

While no one can be certain what 2010 will bring, employers should prepare for litigation and for increased enforcement actions.  Experts are recommending a proactive approach.

• Employers should have a thorough understanding of what laws and regulations apply, and review their policies and procedures to ensure they are in compliance.
• Internal audits should be conducted to identify any potential problem areas, and corrective action should be taken where appropriate.
• Revisiting documentation and document retention practices is vital; having appropriate documentation can, in some circumstances, prevent litigation, and will be critical should the employer be faced with litigation.

For more information on protecting your company, contact CPEhr, a Human Resources Outsourcing and Professional Employer Organization.

Guest post by Stephanie R. Thomas, Ph.D.

Dr. Thomas heads the Equal Employment Advisory and Litigation Support Division of Minimax Consulting. The Division provides consulting services, dispute resolution support, and expert testimony to Fortune 500 companies, major law firms, and local, state, and federal governments and agencies.  The Division specializes in labor and employment issues in both advisory and litigation contexts.

Website: Minimax Consulting

Disclaimer

Despite the uncertainty, businesses should take stock of what is required to succeed and use this time to prepare them for the bumpy road ahead as the economy slowly recovers. When considering the future, small businesses should focus on three key employment strategies in 2010: stabilizing operating costs, reducing employment risks, and enhancing overall employee performance.

Stabilizing operating expenses.

Following dismal sales in 2009, employers will be looking to reduce unnecessary expenditures and maintain a lower operating budget until revenues increase. While there are hundreds of areas to be considered, employment costs typically account for the single highest percentage of overall operating expenses in a business. These expenses include both hard and soft costs. Beyond payroll and tax overhead, hard costs are related to health insurance premiums, workers’ compensation, recruiting fees, payroll processing and legal fees. Soft costs include employment administration, management time, employee reviews and compliance. Reducing these employment costs can significantly impact an employer’s bottom line.

Reducing employment risks.

There is a direct correlation between an increase in employment related lawsuits and difficult economic periods. Employers should beware that a downturn in the economy is often accompanied by an uptick in employment litigation.  As such, employers should prepare themselves by reviewing and training managers on termination policies, updating their forms and policies, and ensuring compliance with payroll-related labor laws and regulations. As the economy strengthens, employers may begin to rehire lost personnel. They should review proper interviewing techniques, update their employee handbooks, and have new-hire packets and offer letters reviewed for compliance.

Enhancing employee performance.

Even as companies begin hiring again, it will take some time before the workforce is back to pre-recession levels. What this means for the average business is that managers are trying to maximize productivity with a smaller workforce. The inevitable result is a more stressful work environment as both employees and management struggle to find a healthy balance of productivity despite the decreased manpower. Employers will be required to find new ways of incentivizing, motivating and training their workforce to maintain a positive attitude while managing increased workloads.

Employers that proactively pursue these three employment priorities will be a strong position to weather the uncertain economic times that lie ahead.

What is ADAAA??

Effective January 1, 2009, the ADA Amendment Act (ADAAA) was enacted which provides for a more expansive interpretation of what constitutes a “disability”. The new laws extended ADA coverage to millions of Americans previously outside of that law’s protection. The ADA Amendments provide a much broader definition of disability, “to the maximum extent permitted by the terms of this Act.” The Act expanded the definition of a disability in four ways:

1. That a person’s impairment must be considered without corrective measures,
   except for ordinary eye glasses and contact lenses.
2. Includes in the definition of a disability those impairments that are episodic
   or in remission, if the medical condition would fall within the definition when
   active.
3. Expands the definition of major life activities, adding “eating, sleeping,
   walking, standing, lifting, bending, reading, concentrating, thinking, and
   communicating” as well as bodily functions
4. Interpretation of “substantially limits” as being “significantly restricted” is too
   limiting and that the EEOC should adopt a broader interpretation.

The Act protects against discrimination because an individual is “regarded as” having an impairment whether or not the perceived impairment actually is included within the ADA definition of a disability.

What these changes mean to you.

The broader definition of “disability” means that more requests for accommodation for common conditions will be brought forth by employees who had not previously not been considered disabled. This can include common ailments such as:

1. Diabetes
2. Obesity
3. Bad back; minor ailments

The expansion of “regarded as” coverage will likely to lead to increased EEOC charges and lawsuits. In our next post we will discuss the six-steps of the “Interactive Process” and how a proactive approach to an employee with a disability will help reduce your chances of being sued.

Discretionary and Non-Discretionary Bonuses

Employers usually pay two types of bonuses: non-discretionary and discretionary.

Discretionary bonuses are usually paid as a gift for past services and are not measurable by an employee’s work performance, and/or hours worked.  An example of a discretionary bonus is a holiday bonus or special occasion bonus.

Non-discretionary bonuses are bonuses that are intended to increase an employee’s performance and efforts.  For example, bonuses paid on work performance efficiency and quality, attendance, years of service, and bonuses promised to employees at time of hire are considered non-discretionary.

When paying out non-discretionary bonuses, you must also pay the overtime “premium” on the bonus.  According to the Department of Labor, since the bonus was earned during the regular hours as well as the overtime hours, the overtime “premium” on the bonus is paid on half-time or full-time (for double time hours) on the regular bonus rate (from DLSE Manual). Unfortunately, you cannot just pay an employee a $100 bonus, if they worked any overtime in the pay period for which the bonus was earned.  You must reference the bonus on their pay stubs and note the workweek(s) that the bonus was earned.

Example On How to Calculate Overtime Premium When a Bonus is Paid:

Regular hourly rate of pay………………………………………………………………………………………..$10.00

Overtime rate of pay………………………………………………………………………………………………..$15.00

Total hours worked in workweek = 50

Total regular hours worked= 40 (8 hours x 5 days)

Total overtime hours at time and one-half = 10 (2 hours x 5 days)

Bonus………………………………………………………………………………………………………………………$100.00

Regular bonus rate:

$100.00 (bonus) ÷ 50 (total hours worked) =

$2 .00 ÷ 2 (for half of the regular rate) =

$1.00 x 10 (Overtime Hours) = $ 10.00

Total earnings due for the workweek:

Regular hours: 40 hours @ $10.00 ………………………………$400.00

Overtime: 10 hours @ $15.00 ……………………………………..$150.00

Bonus ……………………………………………………………………………$100.00

Overtime on bonus…………………………………………………………$ 10.00

Total ……………………………………………………………………………$660.00

Remember, wage and hour laws vary by state, it is important that you understand that as an employer you are mandated by law to pay your employees for all hours worked.

The Bottom Line

Confused yet?? There is a lot to know, and a lot to implement. If you are concerned about tackling wage and hour compliance alone, you may want to consider outsourcing some of these complicated laws to professionals who can guide you every step of the way. Please contact us for a free wage and hour consultation.

Contributed by: Thi Ha and Monique Stennis, CPEhr

How Does It Work?

HR Outsourcing is the practice of using outside experts to handle work that is normally performed by in-house staff and resources. Companies shift the responsibility of nonessential jobs that can be handled easily, and inexpensively, by off-site specialists in the areas of payroll, benefits, and other complex workplace regulations. It is common for small business to outsource their payroll processing, accounting, facilities management and many other important functions — often because they have no other choice. Many large companies turn to outsourcing to cut costs, while smaller ones may be looking to improve efficiencies or reduce liabilities. In response to these demands, entire industries have evolved to serve businesses’ outsourcing needs.

There are many reasons why a small businesses would outsource their human resource functions. These can include:

• Controlling expenditures
• Increasing efficiencies
• Gaining economies of scale
• Accessing more comprehensive benefit plans
• Reducing labor costs
• Reducing risks and exposures to governmental regulations
• Ability to focus internal resources on core business activities

“It is difficult for small businesses to manage all facets of human resource administration associated with their workforces,” said Lisa Rowan program manager for HR and talent management services for IDC. “There are an increasing number of options for comprehensive HR outsourcing services for the small market; the oldest of these is the professional employer organization (PEO) model, which actually is a precursor to and grandparent of HR business process outsourcing (BPO).”

The Value of Outsourcing HR

In a recent survey by the Society for Human Resource Management, or SHRM, professionals in the industry were asked their opinions on HR outsourcing, and the majority listed “saving money” as the No. 1 reason. However, other reasons for outsourcing included:

• Focusing on strategy
• Improving compliance
• Improving accuracy
• Lack of in-house experience
• Taking advantage of technological advances
• Offering services they could not offer.

In that same SHRM report, HR professionals said the top function outsourced was 401k administration, along with training, health care and employee benefits administration, payroll, staffing, background checks, recruitment and policy writing.

Once HR and other operations are outsourced, many companies are showing a strong return on investment, according to a recent survey of American executives. A survey of executives at the IDC Midwest Conference showed nearly 85 percent of the respondents saved as much as they spent on outsourcing, with 26.4 percent reporting a savings of twice as much. And the savings, according to nearly 95 percent of the respondents, went toward operational performance and innovation, which improved shareholder value.

If you would like to investigate if HR Outsourcing is right for your company, please contact us for a complimentary HR Cost Analysis.

Why do employers break the law?

In a previous post we reviewed the significant penalties attributed to improper documentation of employees. So why would employers put so much at risk to seemingly save a few dollars? The answer according to ICE all boils down to two simple words: big money.

According to ICE, employers hire undocumented workers for reasons such as:

• obtaining a financial advantage over their competitors by paying lower wages
• offering few if any benefits
• failing to comply with tax laws
• avoiding health and safety related complaints

Improving the workplace, not fines.

Contrary to popular belief, the recent increase in ICE’s activities is not to create an additional revenue stream for the government agency. The following quote was made by Marcy Forman, Director, Office of Investigations, Immigration and Customs Enforcement in April, 2009:

However, we are not interested simply in a punitive approach to worksite enforcement. Our goal is an approach that incorporates compliance and prevention. To this end, ICE has established a robust industry outreach program, our IMAGE (ICE Mutual Agreement between Government and Employers) program. Since 2006, ICE has partnered with industry to provide “best practices,” training, and recommended tools industry can use to comply with worksite laws and requirements. Currently there are 46 IMAGE members, associates, and endorsees of the program. In FY 2008, ICE outreach coordinators in our 26 field offices made IMAGE presentations to more than 8,300 businesses. Based on our comprehensive strategy to address worksite enforcement, we believe that we are creating the conditions of a culture of industry compliance.

Don’t play dumb.

While the lure of saving a few dollars by avoiding taxes, benefits or offering lower wages may entice some employers to break law, may others are simply unaware of the federal requirements. As stated in the earlier post, the rules are complicated so often times employers will unwittingly violate the law. Government agencies are apt to work with an employer that exhibits a willingness to clear up their operations, only issuing fines for intentional, flagrant or repetitive violations.

If you or someone you know employs illegal workers, or is currently being audited by the DHS, please contact us immediately for assistance.

HR Solutions

Upon entering the HR Outsourcing relationship with the practice, a CPEhr Human Resources Specialist immediately began to review their policies and employee documentation. Many gaps in employment protocol were identified. An array of new employment forms were created, compliant procedures were implemented and new guidelines were put into practice. The Director and Office Manager received training on proper employee review and termination procedures, and their designated HR Specialist was invited to attend exit interviews and assist in the termination process. “I have run the office for more than a decade,” says the Director, “But knowing CPEhr is here to guide me through all employee matter offers tremendous peace of mind. Now, instead of being distracted by minor personnel issues, I can focus on the practice. CPEhr has truly become our partner.”

The most critical assistance occurred when the practice decided to outsource their billing function and to layoff the entire department. CPEhr assigned several HR staff to assist in the layoffs, with proper termination procedures, protocol and severance packages that were in the best interest of both the practice and the employees. The Director sums up the incident succinctly: “We could never have done this on our own.”

Real Results

Since joining CPEhr, he feels that the day-to-day protection he experiences in the area of employment exposures is immeasurable. “I now have tremendous peace of mind. CPEhr has become our ‘go-to resource.’ Without this type of relationship we end up making our own decisions, without proper knowledge of the law, and will ultimately make a mistake. You think you can use common sense, but common sense and the law rarely match!”

The Director says the benefits of CPEhr were immediately realized, as the new systems and processes were implemented and functioning within 30-60 days. “I recognize the reality that as the practice grows. So too would the need to hire an HR Manager. However, by outsourcing to CPEhr , we don’t need to spend the money on another hire and can use those funds to invest back into patient care and clinical research.”

Company Background

This medical practice was founded in 1980 with the mission to provide the highest quality health care combined with clinical research and education. It is currently one of the few cardiovascular practices in the country that balances private practice with academic medicine, and runs one of the world’s largest cardiac transplant programs. They currently employ over 30 employees, but are expecting to significantly grow their employee base in the coming months.

It was obvious to the Executive Director of this prestigious medical practice that his time would be best spent on providing superior patient care and conducting scientific research. Managing employee issues should have been the last thing on his mind. Unfortunately, it wasn’t.

Business Challenges

As the practice grew in size and prestige, the Director recognized the critical role Human Resources played in his practice. “We do not have a dedicated HR staff,” he explains, “But I understand that human resources can’t be put on the back burner. HR is still a critical part of our practice.” With the lack of sufficient internal HR resources they struggled to standardize employee practices and stay abreast of changing employment regulations. While the Director and his Office Manager continued to personally handle the employee relations, an incident pushed them to consider outsourcing their human resources to a professional firm.

An argument ensued between two front office staff, and the altercation ended with one employee threatening to physically harm the other. The event was witnessed and the employee was let go. A short time later she sued the practice for race discrimination. Even though, at the time, the Director was sure he was doing the right thing, he ended up in an 8 month lawsuit with the EEOC that cost him hundreds of hours of time and distracted him considerably from running the practice. While he ultimately won the case, he realized it was time to work with human resource professionals. He needed a firm who would help him structure an HR system to prevent this from recurring, and to take over the administration of a lawsuit if one ever occurred again in the future. “As our firm continues to grow and we open new offices, managing the staff in multiple worksites is only going to become more complicated,” he says. He invited CPEhr to present their outsourcing HR solution, and quickly engaged their services.

To be continued…

In our next post we will examine the solutions CPEhr provided, and the real, tangible results the client experienced.