Running a business is hard work! Operational bottle necks, financial obstacles, personnel issues, and business development road blocks are realities. New opportunities exist, yet day-to-day challenges and distractions get in the way. The last thing a new entrepreneur or seasoned executive needs is another people-related distraction! Such personnel distractions exist due to poor preparation and planning. When it comes to people management, business leaders must setup policies, processes, and procedures to maximize human effectiveness and tighten legal compliance. Up-front preparation allows employers to minimize lost time, energy, resources, and morale. Over the next four blog posts, I will explore ten employment practices that create workplace distractions.
1. “But, I Don’t Want to Increase My Payroll!”—Failing to Pay Overtime Payments When Overtime Payments are Due
The FLSA classifies employees as either Exempt or Non-Exempt. The Exempt classification means an employer does not have to pay overtime wages (amongst other things) to an employee, who works over 40 hours. The Non-Exempt classification means an employer does have to pay overtime wages to an employee, who works over 40 hours. There are two tests to determine the FLSA classification: (1) Duties—the type of work being performed; (2) Dollars—the amount of money an employee earns. In most instances, an employee must “pass” both tests to qualify as an Exempt worker.
Oftentimes, employers misclassify an employee as Exempt either due to a lack of understanding or purposeful intent. Either way, when an employee does not meet the “dollars” or “duties” requirements, the company exposes itself financial and legal risks.
Action Step: Employers should review both their job descriptions and payroll records to ensure employees are properly and universally classified as Exempt or Non-Exempt. Each job description should denote the correct FLSA classification. In addition, if an error is found employers should provide back pay to anyone, who should have received overtime payments. It is better to correct the issue internally before the Department of Labor’s Wage and Hour Division comes knocking at the door!
Additional Resources:
- https://www.dol.gov/whd/overtime_pay.htm
- https://www.flsa.com/overtime.html
- https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/flsa-overtime-rule-resources.aspx
- https://www.hrdive.com/news/back-to-basics-a-newbies-crash-course-on-the-flsa/540816/
- https://content.next.westlaw.com/5-501-9884?transitionType=Default&contextData=(sc.Default)&__lrTS=20190923160703976&firstPage=true&bhcp=1
2. “But, I Need Somebody to Do the Work!”—Disciplining or Terminating Employees While on Approved FMLA or ADA Leave
Many times, employers face operational constraints when an employee goes on leave. During these times, employers face tough realities related to output, quality, and customer demands. What should an employer do? Hire someone to replace the person on leave? If on approved and legally protected leave (e.g.—FMLA, ADA), employees have rights protecting their jobs. FMLA allows for 12 weeks of job-protected leave for any employee, who qualifies. ADA allows for leave as an accommodation in some instances. While on leave, any adverse employment decision related to their job runs the risk of timely and costly litigation. An employer can move the employee, who is on protected leave into a comparable position with comparable pay, comparable work hours, comparable responsibilities, the same level of seniority, benefits, etc. It is vital that the employer understand the employee’s rights while on leave. Courts across the United States host many employment lawyers litigating FMLA and ADA retaliation and interference claims.
There are instances where an employer may terminate an employee on leave. If an employee would have been terminated regardless of his/her FMLA or ADA leave due to poor performance and behavioral violation, the employer may proceed with the termination. In addition, if the employer learns of policy violations or performance issues while an employee is on leave, the employer may have grounds to terminate. If an employee is found to engage in prohibited conduct (e.g.—fraud) while on leave, the employer may have ground to terminate. If there is a layoff event during an employee’s leave, he/she may still be considered for a reduction in the workforce if there is proof that he/she would be laid off in lieu of the approved leave. Bottom line, employers may terminate an employee on leave if there is a nondiscriminatory reason that is legitimate.
Action Step: Employers should document all behavioral and performance related corrective action. A paper-trail is essential if/when such a situation arises. In addition, employers must have solid communications, processes, and decision-making when it comes to FMLA and/or ADA. There are situations where employee performance and behavior come to light while on FMLA and/or ADA leave. If an employer decides to take adverse action against an employee, he/she must demonstrate correct action documentation as well as FMLA adherence. As with most employment law issues, employers should consult an attorney and HR expert, who can help maneuver through sticky situations.
Additional Resources:
- https://employment.findlaw.com/family-medical-leave/walking-the-fmla-termination-tightrope.html
- https://www.chard-snyder.com/employers-and-advisors/compliance-watch/guidelines-for-termination-of-employment-at-the-end-of-fmla-leave/
At the end of the day, entrepreneurs want to live out their vision and mission. It is vital that these (and the other eight workplace distractions) do not become their focus. Planning up-front by developing solid policies, procedures, and practices is key to this!
Stay tuned as I explore the world of ADA/FMLA/Workers’ Compensation, Proper Documentation, and Protected Speech in my next article of this four-part series.
Check out other blog's by Steve Black:
Micro-Interactions: Small Actions With Huge Results
Lattice Work: Building Structures That Support Strong Cultures