Posts Tagged ‘HR compliance’

Who Are You Really Hiring?

Tuesday, May 17th, 2011

If you aren’t doing background checks and drug screens before you hire then you really don’t know who you are hiring.  KPA has found that over 30% of applicants we process through our HR system do not provide complete or accurate information on their application. To make a good hiring decision and to protect yourself in the event of a negligent hiring lawsuit a background check and drug test are a must. I’ll never forget having to testify against a client when I worked for one of the largest background companies in the US. The plaintiff’s attorney asked me if the client could have seen a history of substance abuse and traffic accidents if they had just been willing to spend $60 for a background check. I had to answer yes, the client had access and in fact had ordered background checks and drug tests in the past. Unfortunately a supervisor at the client company shortcut the process and put a person to work without the required background check. The new employee then promptly got drunk on the job and ran a company truck into the back of a car. The HR manager was not aware that the process had not been followed until after the accident had happened.  The settlement reached with the injured parties was over a million dollars.  Lessons learned?

1) Standardize the process for obtaining and reviewing background checks and drug tests.  If possible use software that will automate and force compliance to company policy for not just background checking but for the complete hiring process.

2) Don’t be penny wise and pound foolish.  A background check and drug testing will cost in the range of $60 to $75 dollars if you use a third party. A very small investment to make sure you know exactly who you are hiring.

3) Use a third party provider (they have  expertise, and access to data you won’t have ) but select with care.  Understand how they obtain their data. Make sure they provide compliance assistance as there are a  number of regulations at the state and federal level that govern the use of drug testing and background checks in hiring.

4) Never establish a policy that states “we don’t hire anyone with a criminal record”.  In many states this would be considered discrimination.  Each background check must be reviewed against the actual job and factors such as time since the criminal act, age at the time of the act, efforts at rehibiliationa and the serious of the crime must be considered.  Employers can determine that it is not in their best interest to hire a person with a criminal record but must show that the decision was made fairly and without discrimination.  Providing a ranking using specific criteria is where  third party provider can really add value.
For more information on background checking go to http://www.kpaonline.com/hr/hr-management-system/background-checking-drug-testing.html  or http://tandemselect.com/

Join the conversation: Do you always obtain a background check and drug test on a new hire?

Finalized Form I-9 Rules Effective May 16, 2011

Wednesday, May 11th, 2011

Effective May 16, 2011, employers must follow the newly finalized Form I-9 rule  (the rule was orginally published back in 2009). Here’s what that really means…

Don’t forget that  the final rules prohibits employers from accepting expired documents; revises the list of acceptable documents by removing outdated documents and making technical amendments; and adds documentation applicable to certain citizens of the Federated States of Micronesia and the Republic of the Marshall Islands.
The list of acceptable documents that employees may present to verify their identity and employment authorization is divided into “List A” documents, which show identity and employment authorization; “List B” documents, which show identity only; and “List C” documents, which show employment authorization only. Employers may continue to use the current version of the Form I-9 (Rev. 08/07/2009) or the previous version (Rev. 02/02/2009).  The U.S . Citizen and Immigration Service ( USCIS)  Handbook for Employers, Instructions for Completing the Form I-9 (M-274), was updated on Jan. 5, 2011.

The Lawsuits are Coming, Get Ready to Pay

Friday, April 22nd, 2011

  The Cleveland Plain Dealer reported that over 6,800 private-sector lawsuits were filed nationwide in 2010. The DOL (Department of Labor), handled about 32,000 wage and hour complaints in 2010, a jump of 33 percent in just two years.  The Equal Employment Opportunity Commission reports that pay and promotion cases are now the biggest category of employment discrimination filings but discrimination cases are also on the rise.  Broadly defined but complex new regulations on ADA (Americans with Disabilities) and GINA (Genetic Information Non Discrimination Act)  make it likely that even the best intentioned employer may inadvertently discriminate against an employee or applicant.

  Looking forward into the rest of 2011 and then on to  2012 employers should expect more new rules, with the DOL, ICE and IRS allocating more resources towards enforcement of those rules.  The DOL is planning to issue new rules on the Family Medical Leave Act and the Fair Labor Standards Act.  The National Labor Relations Board has proposed a new rule that, if adopted, would require almost all private-sector employer in the US to notify employees about their rights to unionize.

 The DOL has hired 250 new investigators and has launched the “We Can Help“ program that includes a website and bilingual public service ads designed find and correct the incorrect classification of exempt employees and other violations of wage and hour laws.  To “help” employees even more, on November 19, 2010, the U.S. Department of Labor announced a joint initiative with the American Bar Association to help employees find lawyers to enforce their rights under the Fair Labor Standards Act (FLSA) and Family Medical Leave Act (FMLA). Since December 13, 2010, employees who bring FMLA or FLSA complaints that cannot be resolved by the Department of Labor have been given a toll-free telephone number to contact a newly created ABA-approved attorney referral system that will provide information about participating attorneys in their geographic area.  The U.S. Immigration and Customs Enforcement (ICE)  will continue to increase its investigations and raids on employers who hire illegal workers, over 1000 notices were issues in the first 4 months of 2011. Don’t forget the IRS, in 2011 the IRS will conduct over 6,000 payroll tax audits focusing on companies misclassifying workers as independent contractors, fringe benefits and executive/deferred compensation, as part of a new federal and state focus on the miscallification of workers as independent contractors. 

Complex regulations, increased enforcement and easy access to plaintiff’s attorney are creating the “perfect storm” for employment lawsuits.  Are your payroll and employment practices ready? If you don’t have EPL (Employment Practices Liability) coverage call your broker now.  Consider an independent audit of your HR practices. Use automation (software) to ensure consistent process and good documentation. Plus keep your attorney on speed dial, you probably will be calling  them more than ever.

Join the conversation:  Are you worried about employment lawsuits or audits in 2011?

EEOC Issues Final Regulations for ADA Compliance

Wednesday, April 13th, 2011

Can you define what is a disability and who is covered under the ADA (Americans With Disabilities Act) and ADAAA (ADA Amendments Act of 2008) ?  The answer to this question of what is a disability  under the EEOC final regulations may surprise you.  Watch this short video to learn about the impact on employers when the Equal Employment Opportunity Commission (EEOC) final revised Americans with Disabilities Act regulations become effective on May 24, 2011.

 

 

 

 

 

Department of Labor Clarifies Position on Service Advisors Classification

Friday, April 8th, 2011

On April 5th, the Wage and Hour Division of the U.S. Department of Labor clarified that service advisors are not exempt from overtime. While the current regulations states “a service manager, service writer, service advisor or service salesman who is not primarily engaged in the work of a salesman, partsman or mechanic is not exempt” (29 C.F.R. § 779.372(c)(4))”, beginning in 1987, the Department had adopted an enforcement position that did not deny exemption from overtime payment.  The Department has reversed this enforcement position and dealerships are advised to take into account all earnings for service advisors during the relevant time period including salary plus any commissions to determine the appropriate amount of overtime pay which may be due.

A more complete review of the new enforcement position is available from our partner,  Ford & Harrison at http://www.fordharrison.com/shownews.aspx?Show=7117

How Many Lawsuits Does It Take….

Wednesday, April 6th, 2011
While “How many lawsuits does it take” does sounds like the beginning of an HR joke, AutoZone isn’t laughing.  The company has faced multiple employment lawsuits over the past several years and lost all of them, resulting in some very costly verdicts.  Most recently, on March 28th 2011,  the Ninth Circuit upheld a verdict for the EEOC  against AutoZone with the damages at $65,000.  The suit alleged that an AutoZone store in Arizona had created a sexually hostile workplace.   In September 2010 the EEOC filed a lawsuit in Massachuset U.S. District Court Massachusetts, alleging that AutoZone created a hostile work based on religious discrimination.  The Seventh Circuit upheld a verdict against AutoZone for wrongful termination in violation of the ADA in Wisconsin in December 2010.   The company is also facing a class action lawsuit for wage and hour violations in Oregon, California and Arizona. 
 
One thing the numerous lawsuit highlight is how hard it is to ensure compliance across a wide spread organization even with the best of intentions.   According to the AutoZone website, AutoZone is the “ nation’s leading retailer and a leading distributor of automotive replacement parts and accessories with more than 4,600 stores in the US, Puerto Rico, and Mexico.”  No doubt AutoZone has strict written policies against harrassment, hostile work enviroments and discrimination.  Certainly they provide training to managers and employees on what is appropriate behavior.  The founder of AutoZone has a long standing personal committment to equal rights and is patron of the of the National Civil Rights Museum, where the current CEO is serves on the board as Treasurer.  Yet a bad or misinformed manager at just one of those 4,600 locations can result in a $65,00 verdict.   
 
Join the conversation:  Is it easier to ensure compliance at a large corporate with a high level of HR staff and resources or at a smaller company?
 

Don’t forget “protection” when disciplining or terminating employees

Friday, April 1st, 2011

Remember the “protected” rule when disciplining or terminating employees. Never discipline or terminate an employee in a protected class or an employee engaged in a protected activity without consulting an attorney. Protected classes are race, color, religion, national origin, age (40 and over), disability, veteran status, genetic information sex, familial status, sexual orientation and gender identification (some jurisdictions). Protected activities include lodging a harassment complaint, filing a work comp claim, taking certain leaves including FMLA leave, asking for a disability accommodation or complaining or filing a charge of unlawful activities.

Internships: Paid or Unpaid?

Thursday, March 24th, 2011

With daydreams about laying by the beach and warm, hot summer days looming in the near future, comes the burning staffing question: are we going to need student interns who are on their summer break and (quite possibly more important) do we have to pay them?

As defined by the Fair Labor Standards Act (FLSA), internships with “for-profit” private companies are most likely viewed as employment (i.e. “suffer or permit to work), thus being considered non-exempt from minimum wage and overtime compensation requirements.  However, there are a few circumstances where internships in “for-profit” private companies may be unpaid.  The Department of Labor applies the following six criteria when determining whether an unpaid internship is legal:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training in which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Are you abiding by the Fair Labor Standards Act with your summer interns?

Want To Stop Whistleblowing? Give Out Whistles

Monday, March 21st, 2011

Never want to face a whistleblower initiated  investigation or lawsuit? Then encourage whistle blowing. Give your employees “whistles” and tell them to blow them,  asking that they blow them internally first. Creating a strong culture of internal reporting and resolution of issues is the best way to avoid costly government investigations and lawsuits. Plus having documented procedures and policies and a history of following up on employee complaints is critical if you do have to respond to an investigation, audit or lawsuit.

Here are simple steps that give your employees the chance to “blow the whistle” internally and create a safe, ethical and legal workplace culture.

  1. Create a policy for reporting issues or violations that includes:
    • How to report using formal mechanisms such as hotlines and  e-mail mailboxes
    • Communicates the process of voicing concerns, such as a specific chain of command, or the identification of a specific person in the organization
    • Clearly states that no retaliation will be tolerated
  2. Establish a connection between your businesses code of ethics, your safety standards  and performance measurements. Acknowledge and reward those employees who hold themselves to the highest ethical  and safety standards.
  3. Management  Buy In. Upper management must demonstrate a strong commitment to reporting and resolution of issues. Every manager should be trained on the corporate policy and required to have an “open door” policy for reporting issues.
  4. Talk it Up. Top management should make every effort to talk about the commitment to ethical behavior and a safe workplace in memos, newsletters, and speeches. Publicly acknowledging and rewarding employees who report issues sends the message that management is serious about addressing issues.
  5. Follow Up. Managers must investigate all allegations of improper, illegal  or unsafe conditions promptly and thoroughly.  Inaction when an issue is reported is the best way to create cynicism about the seriousness of an organization’s ethics policy.
  6. Check Up. Find out employees’ opinions about the organization’s culture. Conducts an annual employee survey related to ethics, safety and open communications.   Some questions to included are: Do you believe unethical issues are tolerated here? Do you know how to report an ethical issue?  Are you aware of any unsafe conditions?  Are you comfortable reporting issues to upper management?

Join the conversation:  Do you have an internal issues  reporting program?

Don’t Fire Whistleblowers- No Ifs, Ands, or Buts

Wednesday, March 16th, 2011

  Employees have a right to report alleged non compliance to federal and state agencies without fear of retaliatory firing or demotion-no ifs, ands or buts. The Department of Labor has made it very clear that retaliatory firing will not be tolerated. Consider the recent $110,000 back wage payment and fines imposed by OSHA for the firing of an employee who reported mechanical issues with his truck and was  fired the next day.  United Auto Recovery was required to rehire the employee, pay back wages and punitive damages plus improved the workplace by posting employee rights posters and increasing training on employee rights. 

  Traditionally OSHA and the EEOC (Equal Employment Opportunity Commission) have been the primary investigators of complaints of retalitory firing.   Other agencies including the SEC and FTC have gotten into the act with strong whistleblower protections under Sarbanes Oxley for employees of public companies; new laws including The Patient Protection and Affordable Care Act of 2009, which creates whistleblower protections for employees in the health care sector; and The Dodd-Frank Wall Street Reform and Consumer Protection Act which provides expansive protection to whistleblowers in the financial services industries. 

The bottom line is you can’t afford to fire a whistleblower unless you have absolute, irrefutable evidence the firing had nothing to do with the report of fraud, complaint of discrimination or safety issues.  Tomorrow’s blog will discuss how to create a work culture that encourages internal whistle blowing as a means to decrease external whistle blowing.