Free Agent Workers: "Everyone is going to be self-employed"

The title of the article was "Everyone is going to be self-employed." For someone who has been that way for almost 20 years it was an instant eye-catcher. I am a big fan of 'free agents" in the workplace so I read the article with interest. It was an interview in the October 17, 2010 issue of the Atlanta-Journal Constitution (no link available) of Jagdish Sheth, a consumer psychology expert and Emory University professor. When asked about his forecast for the future of the economy his response was :

"I forecast that by 2020 we will have 5 million employees in a 'company' which I have dubbed Self Inc. Everyone is going to be self-employed.... people want to work on contracts or free-lance, be their own boss. At that same time, companies are going to switch over from employees to contractors because the biggest expense becomes health care benefits. So, it is not that jobs are going to be revitalized, but the work is going to be revitalized."

I like the idea. I have liked the idea for a long while, ever since Fast Company and Tom Peters have been talking about Me Inc. and You, Inc. and a free-agent nation. I am not sure everyone would like to be self-employed however, but a large number might be. The roadblock that I see to this occuring is a little organization called THE FEDERAL GOVERNMENT. Both the Internal Revenue Service and the U.S. Department of Labor both have rules and regulations that make it extremely difficult for businesses to use independent contractors on a widespread basis. And in fact they are currently stepping up the efforts to make this even more difficult. (If you want to know more I have written about it several times. Put in independent contractor in the search window to the right and you will find them.) Much of this is driven by revenue. It is easier for the government to collect taxes from companies than it is to collect them from individuals. Of course they will tell you it is for the protection of the worker. But there has been public acknowledgement of the need to generate more revenue.

I asked Attorney-at-Law David Long-Daniels, of Greenberg Traurig LLP, who was presenting, at the SHRM Atlanta conference, on the pitfalls of having contingent workers and independent contractors if he thought we would ever see the Feds allow the widespread use of independent contractors. His answer was a very difinitive "NO." And I agree with him as things exist today.

However, in the online version of Time Magazine from October 29th the following article appeared: Could the Courts Outlaw the Minimum Wage? Written by Adam Cohen, it details the political campaigns of two Republican senatorial candidates, John Raese, the Republican candidate for Senator in West Virginia and Joe Miller, the candidate in Alaska. Both of these men are saying that while the minimum wage is an ok idea it is fundamentally unconstitutional and they want the U.S. Supreme court to rule on the constitutionality of the Fair Labor Standards Act. I am not going to go into the details here because of length, you can read it by clicking the link above. But the conclusion is that would be a major uphill battle to over turn the FLSA.

But the idea has started. And it could gain steam if the forecast of Dr. Sheth starts to materialize. If more people want to be free agents and more companies want to use free agents there may be a drive to unregulate those relationships. And overturning the FLSA would certainly do that. I sincerely doubt that will happen but the move may cause more people to reexamine how we work in this country. Dr. Sheth had an interesting conclusion to his interview that may add some fuel to the movement. He said:

"America is has a survival instinct, and we foster entrepreneurship. It is a nation of ideas, and entrepreneurshisp is the best form of egalitarianism- better than democracy. Entrepreneurship does not discriminate by religion, gender, ethnic backgroun. To me that is the most powerful."

So there is some thought for you to chew on. What do you think? Do we have a chance to become a nation of Free Agents? Will entrepreneurship win over government?

Five Steps to Diminish Wage & Hour Problems

First off let me get the disclaimer out of the way. I am NOT an attorney. I am NOT providing legal advice. I am making these statements from the perspective of an HR professional, consultant and HR instructor that has dealt with Wage & Hour issues for a long time. With that said here is my list of things that may help you avoid a wage & hour investigation or, if you have one, may help you come out better as a result.

1. Step 1: Be educated. If you have been in HR for any period of time you have run across FLSA issues. You may think you know them. Hopefully you do. However, my 12 years of teaching has shown is that many people know how their company does things and not what the law says. Many times the "company" way of doing things is NOT correct. Additionally, there are variations on wage & hour issues that vary by states and also muncipalities. There is alot of material out there that will provide you guidance, the only caveat is to make sure you are getting materials published as recently as possible. The FLSA was altered substantially in 2004, so stay away from pre-2004 materials. The USDOL website actually offers materials that will help educate you. You can see their powerpoint by clicking Fair Labor Standards Act.
2. Step 2: Educate your managers and supervisors. The interaction between manager and employee is where the "rubber meets the road" and most of your violations will occur here. Make sure they understand that no one works for "free." Make sure they understand not only the rules but also company policy on how to deal with issues as unauthorized overtime, breaks, meal times, travel time and "donning and doffing" time. Wage and Hour Law (Basic Training for Supervisors) is a guide book you can get from Amazon that provides some good basic training.
3. Step 3: Realize that jobs classified at EXEMPT must truly meet the exemptions standards set forth by the FLSA. Job titles do not reign supreme. You can review these exemptions by viewing this powerpoint on exemptions. If as a result of your review of the exemptions you find it necessary to interview managers and/or employees, the lawyers of Seyfarth Shaw recommend that you involve an attorney in order to preserve the attorney-client privilege. If you engage an outside consultant make sure their work is being directed by an attorney as well in order to safeguard the privilege.
4. Step 4: Create the appropriate policies. This includes a "Safe Harbor" policy to help protect you in case mistakes do get made. This policy needs to prohibit improper deductions, provides a mechanism for employees to complain TO YOU about them, and specifies you will correct the errors and promise to not make those mistakes again. Depending on the nature of your workforce you also need to specify other policies that deal with your employee population and the way they report time, get paid for that time and under what circumstances. These may include some of the things mentioned above, such as meal times, overtime, being fully relieved of work during meal times. But it may also include training time and travel time. You need to be specific to your workforce.
5. Step 5: Train your employees. We covered supervisor training, but rather than having them correct behavior all the time it is easier to explain to employees what correct behavior is and thus avoid wage and hour issues. So once you have the policies written make sure you spend some time educating.

The USDOL has targeted some specific industries, including healthcare, restaurants, janatorial services, day care, car washes, and the temporary help business. But just because you are not on this list does not make you safe. A complaint from an employee or ex-employee may also bring a visit. So hopefully this brief statement may help you avoid some problems. Will it stop all of them? No.. remember the FLSA is 700 pages long. But the more you can do to ward off complaints being filed, the more you can do to keep investigators from visiting, the more you can do to lessen the impact of what they may find if they do visit, the better off you will be.

Tomorrow, stay tuned for what lies in store from OSHA.

US Department of Labor: It's War! And Employers Are The Enemy

In a press release issued April 1 (yes April Fools Day, but this is no joke) Secretary of Labor Hilda Solis announced the release of the "We Can Help Program." If you were a trusting soul you might think this was a program to help employers correct wage and hour mistakes so that workers would be properly compensated. The FLSA is not an easy law to understand and deal with. After all there over 700 pages of regulatory text and over 50 statutory exemptions. So what would be better than a program to help employers to better understand this law. Well if this is what you think then you are the April FOOL.

The "We Can Help Program" is "being spearheaded by the department's Wage and Hour Division, will help connect America's most vulnerable and low-wage workers with the broad array of services offered by the Department of Labor. The campaign will place a special focus on reaching employees in such industries as construction, janitorial work, hotel/motel services, food services and home health care. It also will address such topics as rights in the workplace and how to file a complaint with the Wage and Hour Division to recover wages owed."  (My emphasis.) The AFL-CIO touted this announcement as a war on "wage theft" and Solis reiterated this by saying "If someone is stealing your wages, you can and should call the Department of Labor….We can help, and we will help. If you work in this country, you are protected by our laws. And you can count on the U.S. Department of Labor to see to it that those protections work for you." Employees are going to be "helped" to identify you as a thief and be taught how to report you. Luck you.

 

As further evidence that the USDOL is not going to be a friend of the American employer they have announced, according to Seyfarth Shaw attorney, and former Deputy and Acting Administrator of the USDOL, Alexander J. Passantino, that NO MORE opinion letters will issued. So an employer cannot ask for the USDOL to rule on a position to determine if it is exempt or not. Additionally, another 293 Wage & Hour investigators have been hired and trained and another 90 have been requested. A Chief Enforcement Officer has been appointed to head this effort up.
 
Additionaly actions that have or will occur include:

• Previous investigations will prompt more investigation
• An employers investigation history will be available on the website of the USDOL
• If  you accepted any stimulus money you will be investigated or if you are a subcontractor to someone who accepted stimulur money or is subject to Davis Bacon you will be subject to investigation.
• Information about investigations may be shared with other Federal agencies, such as the IRS and Department of Homeland Security and also with state department of labors.

One of the major outcomes of the second bullet is that personal injury attorneys these days are getting into the Wage & Hour business. They are bringing lawsuits on behalf of employees or ex-employees. They advertize on daytime TV these days. With the records of an investigation against you now being published on the USDOL website they now have identified targets and have been known to seek out your ex-employees or even your current employees. They are even actively soliciting the business when someone calls into them about other lawsuits, according to Seyfarth Shaw attorney, Louisa Johnson.

The USDOL has also announced increased OSHA efforts targeting employers and the NLRB will also step up efforts detrimental to businesses. Both of these issues will be discussed later in the week.

The net result of this new world order is that a BIG  target has been painted on the back of businesses and it is going to require you to be vigilant and proactive.

Tomorrow I will post on some of the Wage & Hour areas you need to pay particular attention to and what you should be looking for and doing with them. In the meantime, please pass this blog post around to other HR folks you know and in particular to any small businesses you know as well. Small business is particulary vunlerable just because they lack HR resources. Until tomorrow.....

Exposing Breasts in the Workplace: Part of Healthcare!

Ok now that I have your attention, get your mind out of the gutter. This has to deal with the Healthcare bill. The Healthcare Bill, officially, The Patient Protection and Affordable Care Act, and the "fix-it" bill being signed today, contains a broad spectrum of issues to which we must pay attention. The items are diverse and include not just insurance regulations, but also requirements to post caloric values of foods by all fast food restaurants, taxes on medical devices and drugs, taxes on Medicare wages and even a revamping of the Pell Grant program. (Explain the healthcare implications of that one for me!)

One of the little known aspects of the PPACA is the requirement for companies to provide unpaid breastfeeding breaks. This is an amendment to the Fair Labor Standards Act (FLSA) and "....requires employers to provide reasonable, unpaid break time to employees who are nursing mothers to express breast milk for their infants. The Act amends section 207 of the Fair Labor Standards Act (FLSA) and requires an employer to provide a reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child's birth each time such employee has need to express the milk. The employer shall also make reasonable efforts to provide a place, other than a bathroom, that is shielded from view and free from intrusion from co-workers and the public, which may be used by an employee to express breast milk." (Source: Smith Gambrell & Russell, LLC Client Alert, March 25, 2010.)

Employers of fewer than 50 employees are exempt from this amendment if "...such breaks would 'impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer's business.'" Hmmm... how do you really deny this one regardless of the size of the company?

One challenge here is recording of this time so you can make it non-paid. I think it would cost more to attend to the recording of time than it would be to just allow the mothers the time to perform this act. So a possible solution is just make it paid break time. But of course then you will have to deal with all the whinny men and women who don't get this paid break time. However, it would put them on par with all the smokers who take unathorized breaks to get their fix.

Anyone have a suggestion on what is going to be the best way to deal with this? I am all ears.

Business Under Assault: Increased Regulations and Enforcement Proposed

If you are a business owner, business manager and especially a Human Resources Manager you should feel like you have a target plastered on you because you do. It is an unfortunate circumstance of our government today they are compelled to pass more legislation and enact more regulation. Unfortunately this ends up making for more work for the small business owner or for the HR manager if the business is fortunate enough to have one.

The bulk of the increase regulation and rule making is coming from the Department of Labor. They have proposed some 90 new regulatory increases. These include:

• Changes to the FLSA to increase amount of payroll records that have to be kept and also made available to the employee every payday in the name of "transparency."
• Changes to labor laws, also in the name of "transparency", that will require employers to fully inform employees about their rights to unionize the employer. They will also require the employer to divulge all monies spent trying to prevent union formation.
• They will "encourage" employers to offer more retirement options to employees that include annuity payments, much like pension plans. Apparently lump sum payments are not going to be acceptable because people "run out of money."
• They are also proposing changes in the regulations for the Office of Federal Contract Compliance Programs (OFCCP); Occupational Safety and Health Act (OSHA) including hazard communication, recordkeeping; Mine Safey and Health Act (MSHA); and Visas.

To this end the DOL has increased the number of Wage and Hour investigators (News Release) and the number of OSHA inspectors. If you would like to see Secretary Solis' statement then you can view her video here. The full regulartory plan has been published in the Federal Register.

If you read it will see frequent statements about the "middle class." Keeping people in the middle class, getting people to the middle class, "finding a path to the middle class", getting "good jobs for everyone, including vulnerable workers" and more. There is certainly a social agenda in these proposals. Hence the need for more regulations.

The DOL, in conjuction with the IRS, is also going to crack down on Independent Contractor usage by businesses. The DOL estimates that over the next 10 years misclassified workers will cost the US Treasury $7 Billlion. And they want that money. So there will be alot more scrutiny of workers labeled independent contractors. You can read more here from The World at Work Law Blog.

So what do you do to protect yourself from this increase inspection, investigation and scrutiny? Here are my suggestions:

1. Understand the FLSA and make sure you are paying people correctly, have them classified correctly and that your recordkeeping is up to date. And train your managers! And document. As I mentioned in my post The Top 5 HR Mistakes That Small Business Makes documentation is very important.
2. Understand the IRS rules on independent contractors. You can get some help here by reading the guidance provided by the IRS, Independent Contractor (Self-Employed) or Employee?
3. If you are in a Target Industry, make sure you understand ALL of the regulations that apply to you and correct any deficiencies you have.

If you are overwhelmed by the prospect of doing this, then seek help. A good HR consultant can be worth their weight in gold. (BTW, I just happen to know one ). Or seek help from an employment attorney. The rest of the regulations we will have to sort out as they come, so stay tuned to HR Observations by subscibing in a reader, found on this page. I will be covering them as they develop.

And for everyone that thinks this stuff is boring, you try keeping up with this crap. This is where companies can lose big $$$$ and if you are saving it you will be golden.

Top 5 HR Mistakes That Small Businesses Make

I am giving a presentation today to a small business association. As all of you know, HR mistakes for any company can be disruptive or even destructive, regardless of the size of the company. For small companies HR mistakes can be amplified and have a significant effect on the potential survival of the company. As I was preparing for the presentation I thought this would make a good blog post as well. So here goes.

1. Not Hiring the Right Person. Many small business owners hire someone just because they know them, they are a family member or they feel sorry for them. They do not have a clear definition of the job skills needed for the job or if the individual possess those skills. And because they often know the person, or think they know them, they do not conduct a background check on them. Often them may miss a "skeleton in the closet" (click the phrase to see a meaning.)
2. Ignoring Government Regulations. Many small companies are mostly or totally unfamiliar with the majority of laws that govern the workplace. Given that most federal laws cover companies as small as 15 employees there are very few things that do not apply to them. They need knowledge, but they don't know it. (Which is why I am in the HR consulting business, btw.) Some choose to ignore regulations because they have had no trouble up to now. Well as the old AAMCO commercials used to say "You can pay me now or you can pay me later."
3. Misclassifying Employees. One of those laws that applies to almost all companies, regardless of size, is the Fair Labor Standards Act. Small business SCREWS THIS UP ALL THE TIME. I spend ALOT of time explaining that Salary does not equal Exempt and just because you call someone an independent contractor does not make them so.
4. Poor Documentation. Documentation in many companies is an afterthought. In many small businesses it is non-existant. The hiring process does not get documented correctly, as in incomplete I-9s. And discipline records are almost never there or are done after the fact. Terminations are generally not supported and often result in unemployment cases being lost or discrimination suits either lost or settled.
5. Not Rewarding Employees. Rewards are not always measured in $$$$. A good evaluation, training and communication are also rewards. In these recessionary times many small companies have taken the tack that since they cannot afford to give any raises there is no need to do a performance evaluation. In reality now is the most important time to do them. People who are afraid that they might lose their job at any time would like to know from their boss that they are doing a good job. Employees are feeling under-appreciated these days and as a result you read figures as high as 1 in every 2 employees is considering changing jobs in the next recovery. In a small company that kind of loss would be devastating.

Those are the Top 5 Mistakes that I will talk about. But there is one other thing I will tell my audience. They need to be vigilent. There are 14 or more pieces of legislation on the federal level, and who knows what is happening on the state level, that will affect business, small and large, in the employment and labor arena. All of them could have a potentially detrimental effect. To avoid this, and to have input in the legislative process, active involvement is needed.

So there you go. I would like your feedback so I can fine tune this presentation for future opportunities. Tell me what you think.

Getting Punished for Trying to do Good: The Lesson in the Quik Trip Fine

QuikTrip, a Tulsa, Oklahoma based convenience store chain, has agreed to pay out $750,000 in overtime payments that the U.S. DOL said were due employees because of a violation of the Fair Labor Standards Act. By just looking at the headline you might think this is the "standard" case of a company working employees off the clock or not counting time they worked. Well if you thought that you would be very wrong. This case has to do with a company trying to do good things for their employees and rewarding them for their good work.

QuikTrip has a bonus system based upon a secret shopper program. Employees are rewarded for extra good work based upon their ratings in the program. What an excellent thing to do! However, QuikTrip got caught in a making a mistake that many companies probably don't even realize they could make too. In fact when I talk about this in the SHRM prep classes I teach most people are agast. The mistake that QuikTrip made was in giving nonexempt employees non-discretionary bonuses! Because if you give nonexempt employees non-discretionary bonuses you have to use that in your overtime calculation for the period of time that was covered by the bonus.

This 2003 article, entitled Intersection of Bonuses and FLSA - Is More Overtime Pay Due?, written by Jason Reisman of the law firm Obermayer Rebman Maxwell & Hippel, explains that "The FLSA requires that non-discretionary bonuses - those promised to employees - be allocated over the time period to which they apply and included in calculating the overtime pay due to non-exempt employees. Such a bonus, viewed under the FLSA as additional compensation for employees' work, requires additional overtime pay beyond the employees' regular overtime pay rate, which is one and one-half times their regular hourly rate of pay. Non-discretionary bonuses that are not paid on a weekly basis require allocation to each workweek covered by the bonus before recalculating the overtime compensation due. Generally, non-discretionary bonuses include attendance bonuses, individual or group production bonuses, bonuses for quality and accuracy of work, and retention bonuses." (For further information click on the link above.)

Discretionary bonuses do not require such payment, but may have consequences beyond just the simple payment of the bonus. To avoid problems Reisman suggests either of the following in constructing a bonus program for nonexempt employees.

1. True discretion - both the language of the bonus plan and the actual administration of the plan must demonstrate "discretion."
   


2. A percentage of total earnings (both straight time and overtime) payout. As to the latter option, instead of a lump sum payment, the FLSA authorizes employers to pay a "percentage bonus" because it automatically includes an allowance for overtime pay as well as for straight time pay. The percentage bonus tool can be a silver bullet to effect compliance with the FLSA overtime provisions, while leaving intact the non-discretionary format of the bonus. However, a percentage bonus still requires advance planning, as it may have associated side effects, such as causing the employer to make different bonus payouts for similarly situated employees who earn different amounts of money, by virtue of different pay rates or working different hours.
   

Or you just don't pay ANY bonuses to nonexempt employees! Overtime problem solved! But wait that certainly does not get you in the direction you want to go in with having committed employees whom you want to reward for helping the company be successful. So careful design and understanding and guidance needs to go into each bonus program you design. Realize the cost of the bonus is going to be greater than the actual bonus designation. And if you don't have someone on your HR staff qualified to do this then get a good compensation consultant to help you. It will be a whole lot cheaper than paying $750,000 in back pay. QuikTrip got burned trying to do something good you need to avoid the same happening to you.

I would like for some of my compensation buddies to weigh in on this and perhaps offer some additional advice. Ann? Phil? Folks at Compensation Cafe?

Independent Contractor: The Devil In Disguise

In the daily news briefings today was a small article with big news. FedEx succumbed to the same problem that has plagued many a business, both small and large. They classified drivers as independent contractors. Fed Ex was sued for this misclassification and lost a $14.4 million settlement for 200 drivers. $720,000 per driver! Pretty hefty fine.

I don't know the particulars of this case, but I see this happen frequently in smaller businesses. They think they can have someone come in as an independent contractor, thus avoiding taxes. Unfortunately this arrangement is not quite as cut and dry as that and businesses get in trouble. The "contractor" negotiates a deal that includes some benefits, for example health benefits. Well that starts messing the relationship up. And when that relationship gets messed up taxes and penalities have to be paid.

There are definite rules to who is and who is not an independent contractor. Here are the rules according to the IRS. And here is another set according to the Fair Labor Standards Act. Lastly, here is another set from the perspective of the independent contractor from Nolo on Preserving your status as an Independent Contractor.

If you are an employer read these rules very carefully and make sure you comply if you are hiring someone as a contractor. A mistake can be very expensive. Remember $720,000 per person for Fed Ex, and that was on appeal.

Productivity Through Technology: A FLSA Trainwreck

As the gas crunch continues to escalate in the U.S. many companies are trying come up with solutions that help employees deal with the costs. One of these solutions is telecommuting, allowing workers to spend time at home and less time on the road. It is nothing new. This interest in telecommuting has been around for awhile as a way to reduce traffic, part of a corporate social responsibility initiative or as part of a progressive employee relations policy. The gas crunch has just sparked more interest. Plus study after study has shown that most workers are more productive as telecommuters.

So companies issue laptops, Blackberrys or Treos or IPhones, and other mobile devices to make their telecommuting (and traveling) employees productive. And with this come a host of issues that make this move more problematic than most companies would like it to be. These issues include:

• Security, for both the devices and the information contained on them.
• Personal use of the devices and privacy expectations
• Use of these devices by non-exempt employees and payment of overtime.

As we have seen in several news stories about stolen government laptops this is certainly an issue. So you need to have some policy and procedure statement that covers leaving these devices laying about for someone else to pick up. This should probably contain some statement about use in WIFI hotspots and use of a firewall. Get your techies to help on that.

If you issue business devices for business use do you allow personal use of those devices as well? Ideally not, that would make it cleaner to deal with. But that is not practical in the real world. You cannot expect your traveling employees to carry two computers so that they will be able to do personal things at night. If you have employees who are gone all week long they need to communicate with family and the bank and their doctors, etc. But you need to have a policy that does let them know that it is a company owned machine and as a result they should have no expectation of privacy and that all information on the machine is subject to review by the company if it is deemed necessary. This expectation of privacy also needs to apply to company owned phones and texting devices. All of that information is recoverable and employees need to be aware of that fact.

The train wreck I alluded to in the title is with the Fair Labor Standards Act. The FLSA requires that all non-exempt employees (both hourly and salaried non-exempt employees) be paid for time worked more than 40 hours in a week (in some state and local jurisdictions for more than 8 hours in a day). This means if you have a non-exempt employee with a company issued laptop/Blackberry/phone and they are checking email, working on projects, etc. you have to track all their time and then compensate them for the overtime. This can get very complicated, particularly if those devises are used for personal things.

We have learned that it is human nature that when an email pops up it gets read, especially on a Blackberry (that is why they are referred to as a "Crackberry.") Few of us ignore that late night email or that after-hours call. The law does allow some "de minimus" use that take up insignificant time. However, if that time starts adding up it then becomes compensible. So you need to set up a policy on the use of those devices and recording that time. If it is going to put someone into an overtime situation then you need to have some approval process in place to make sure OT does not run rampent. It is expensive.

This stuff can get so complicated sometimes that it discourages employers from issuing those devices to non-exempt employees. This can create a "digital divide" in our employee groups. So be careful of your reaction to this. The law can be a roadblock to a technologically productive workforce if you let it be. Perhaps it is time for an other overall of the FLSA. But don't hold your breath. With the influence of unions on the government it is not going to happen.

GINA: Not Just About the Genetics

President Bush signed into law, on May 21st, the Genetic Information Nondiscrimination Act. Beyond the expected healthcare provisions it also had two very HR related provisions:

1. It prohibits discrimination in all areas of employment on the basis of genetic information of the employee or employee's close relatives. This includes hiring, firing, compensation, terms or priviledges of employment. An employer would also be prohibited from limiting, segregating, or classifying an employee in any fashion that would deprive the employee of any employment opportunities or adversely affect the status of the employee because of the employee’s genetic information (or the genetic information of the family member of the individual).


2. A change unrelated to genetic information is the amendment to the Child Labor section of the Fair Labor Standards Act (FLSA). GINA provided for fines of up to $100,000 for any child labor violation that leads to the death or serious injury of any employee under the age of 18.

To me preventing the death or injury of any employee is of paramount importance, but especially if you have children working for you. If you needed anything else there is also this significant financial "incentive." So make your workplaces safe, have rules that are enforced and watch those kids. They think they are "bullet-proof" and may be inclined to short cut the rules.

Smell the Coffee: A Couple of HR Observations

Must have been a tough day today, perhaps due to a 3-day weekend for some, because at least two blogs had a coffee theme. (Ah coffee.. that aromatic nectar of wakefulness).

Kris Dunn, The HR Capitalist, weighed in on the Starbucks story about a court decision requiring Starbucks to pay baristas $100 million in back tips and penalities, for letting shift supevisors share in the tips customers put in the tip jar. Apparently that is a very big "no-no" in California (and now will embolden other employees in other states to bring the same lawsuit.) Starbucks has announced they will appeal the judges "excessive" judgement. However, I am sure we will see some fundamental changes in the way compensation is handled around Starbucks, win or lose. Personally, I never used the tip jar often, unless I got exceptional service, and I mean exceptional. One could argue that employees want tips then they should be willing to take a tipped wage of $2.13 an hour as well. I doubt many would be willing to make that trade.

The other blog with a coffee theme was that of Slacker Manager, Phil Gerbyshak. Phil gives a Monday Morning Management tip, which is: "Instead of having coffee alone, every day this week take a member of your team to coffee with you and find out a little more about how each associate on your team feels things are going. Start with the most junior member and work your way to the most senior." Great idea! In fact, if there is a Starbucks nearby, walk them over and spend sometime getting to know them.

This method is also good for getting to fellow executives and a great way to expand your "network" within the company. If you don't want to ask them out, then bring coffee to them. The point is that making allies and friends within the organization is VERY important to an HR professional and that can be done most effectively by taking a little bit of social time. It does not always have to be business. You are in the business of dealing with humans so put that social skill to work. (And by the way, Starbucks does serve other things than coffee and you will not be automatically be labled a snob. Unless of course you order a venti, no-whip, three shot, double-dipped, pat your head three times latte. Personally, I drink the coffee.)

Clocking Out: Shutting Off The Brain

"The proliferation of phones and PDAs also brings with it wage and hour liability, Weitz says. As HR managers well know, the federal Fair Labor Standards Act requires employers to pay nonexempt employees for all hours worked. Therefore, if nonexempt employees make employment-related cell phone calls from home during off-duty hours, that time is probably "hours worked" according to the FLSA. And that's true even if they say, "Oh, I don't mind making a few calls."

This quote from the HRAdvisor of BLR to me to thinking. Our laws almost require us to forget about non-exempt employees once they walk out the door. Because if you contact them by phone or email then you have to pay for the time and track the time as well. If you don't you get penalized by the Department of Labor, under a violation of the FLSA. And forget about having them think about work and doing something about it. In fact you have to discourage that. Certainly not a very good model for employee engagement. You work at getting people excited about their jobs and then you have to have them "shut it off" when they walk out the door.

Maybe in the days where most people worked on "things" and engaged in manual work that was easy to do. But in today's economy where many employees work with intellectual "things" it seems to me to be harder to shut off. How do you get a non-exempt employee to shut off their brain when they get home? Well, I guess you have them watch American Idol...

What do you think?

Minimum Wage Increase

I heard a discussion on NPR about the effect of the increase in the minimum wage that will occur in January with the new Democratically controlled Congress. It will increase over a three year period ending at $7.25 per hour. Obviously, being presented on NPR the discussion had both pros and cons.

My question for you is: How do you feel about? Will it effect your business? Do you think it will affect the economy? Will people gain from it? Will people lose as a result of it? Will we, the consumer, ultimately pay for it? Weigh-in on this discussion and lets hear what you have to say.

However, regardless of what you think about it, it is coming, so you had better be thinking of the issues and how it will effect your company.