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Complying with Child Labor Laws

It’s 8:00 a.m. - Do You Know What Your Kids Will Be Doing Today?
By Lesley Sifers, Tax Favored Benefits, Inc.

     As the end of the school year fast approaches, many of you will consider hiring students for summer jobs. I commend you. Working is a lot better for kids than “hanging out” all summer. However, you must remember the labor laws governing the employment of minors. One small misstep in this area can cost you $11,000 for a single violation. (The Department of Labor wants to increase this to $50,000.)

     The DOL continues to creatively and aggressively enforce the Child Labor Laws. Often, inspectors contact local schools to identify businesses that hire teens and then closely monitor those employers. In addition, the DOL website (www.youthrules.dol.gov) teaches teens and their parents how to report violations.

     Here is some general and, I hope, practical advice about the employment of minors.

Work Hours

     The law defines hours of work for specific age groups. Following is a list of permitted work hours:

     Children under age 13 cannot be employed in any capacity in your dealership unless they are the owner’s children. Even then, duties are restricted.

     Age 14 and 15 can work outside school hours - 7:00 a.m. to 7:00 p.m. They are restricted to three hours on a school day, 18 hours in a school week, eight hours on a non-school day and 40 hours in a non-school week. When school is not in session (summer vacation), they can work as late as 9:00 p.m., but not over 40 hours per week.

     Age 16 and 17 have no hours restrictions but cannot work in “hazardous” jobs.

     Age 18 can work unlimited hours with no restrictions on the type of work. (Practical tip: If an 18-year old is in high school, pretend they are 15-years old. No sense enabling them to be a dropout!)

Hazardous Work

     The law prohibits certain types of hazardous work for minors. An exhaustive list is available at www.dol.gov/dol/topic/youthlabor/hazardousjobs. Here’s the “Reader’s Digest” condensed version.

     Age 14-15:  Allowable activities include clerical work, answering phones, stocking shelves, cashiering, light janitorial work (no chemicals involved), light packing (no heavy lifting). Prohibited duties include exposure to power equipment (including lawn mowers); things that cut, shear, saw or slice; hoists and cranes; environments that are dusty, smoky, confined or where risk is involved (i.e., grain elevators) and exposure to caustic chemicals. (Practical tip: Make the shop an “off-limits” area. All the neat stuff would be quite tempting to a 15-year old.)

     Age 16-17: Same as above except a 16-year-old would be allowed to operate a lawn mower. 

     Most importantly, for anyone under age 18, any work involving operating a vehicle – including farm equipment – is prohibited or severely limited. This includes moving vehicles on the dealership lot. (Please refer to the enclosed insert from the Department of Labor’s Youth Rules website.)

Exceptions to Child Labor Laws

     There are some limited exceptions to the Child Labor Laws:

     If you own the dealership, you can “employ” your child age 13 or under (not an employee’s child, however). While you can ignore most of the hour restrictions, you cannot allow your child to perform “hazardous” work.

     A person under age 18 who has a high school diploma, general equivalency diploma (GED), is head of a household or a parent contributing toward the support of children is treated as if age 18.

     A person participating in a vocational program approved by the State Department of Education may be exempt from some restrictions. Check with the school to determine which, if any, exceptions may apply.

     Your state may have more restrictive laws governing the employment of minors or may require work permits and/or certificates of age. Review state laws by going to www.dol.gov/esa and clicking on “State Labor Laws.”  For information about work permits and age certification go to www.dol.gov/esa/programs/whd/state/certification.htm. Your casualty insurance or workers compensation carrier may also be a good source of advice in this area. Don’t hesitate to call your agent if you have specific questions.

     If you have questions about this topic or any employment related subject, call the HR Help Line at 800-683-3440 or e-mail lesley@taxfavoredbenefits.com.

 

Taming the Time-Off Tiger - Part 2

By Lesley Sifers, Tax Favored Benefits, Inc.

     Last month, I discussed legal, administrative and employee management issues surrounding time-off.  This month, I hope to provide ideas for improving time-off policies and procedures.  (You may not tame that tiger but you might be able to get it back into its cage!)

     Many companies offer both paid vacation and a limited sick pay benefit. For example, an employee with one year of service might receive one week of vacation and two or three paid sick days. Vacation time usually increases with length of service but sick days do not. Is there a logical reason to differentiate between vacation and sick time? Is there any value in listening to an employee fake an illness? Would it break the bank to combine vacation and sick pay into one benefit?

     Combining these benefits is one advantage of a “Paid Time-off” (PTO) program. In a PTO plan, employees are granted a certain number of days (or hours) to be used during a fixed benefit year. Benefits amount can be tied to years of service as in a traditional plan.  All time away from work (vacation, illness, personal) is then charged to that employee’s PTO.  In essence, this is a “no-fault” attendance policy. Employees don’t have to be on vacation or ill to take time-off.

     Pre-scheduling is required for planned absences such as vacation, planned medical treatment or purely personal reasons, such as parent/teacher conferences. Most other absences, including lateness, are automatically deducted from PTO. Setting a minimum deduction amount is recommended to reduce administration. For example, you could set a minimum of two or four hours and deduct time-off that is equal to or greater than the minimum amount. You can also require employees to take a full day off if a planned absence is going to take most of the day. For example, if you set a minimum of four hours, you could require an employee to take the entire day off if the absence will be greater than four hours.

     A PTO plan works equally well for exempt and non-exempt employees. As you know, an exempt, salaried employee cannot be docked pay for absence unless it’s for purely personal reasons and then only in full day increments. With a PTO, you are permitted to “draw down” time in hourly increments. There are some types of absence that cannot be deducted from PTO unless the employee chooses to do so. Under USERRA, you cannot require an employee to use PTO (or vacation) for military duty.  Jury duty is another situation covered by individual state law. In some states (Nebraska, for instance), you must pay employees who are called to jury duty. In any state, however, it’s probably not a good idea to REQUIRE employees to use PTO for jury duty.

     Automatically drawing down PTO is a first step in taming the tiger.  If you administer the program properly, there should be less unused time at the end of your benefit year. In addition, you can prohibit carryover or limit it to a small amount. In my company, we can carryover two days but this does not accumulate. For example, if I carried over two days every year for ten years, I would still have only two days of carryover – not twenty.

     Implementing PTO requires making decisions. Even though this could be a way to make life easier for everyone, many companies are reluctant to change. One stumbling block is large amounts of unused vacation currently on the books. It’s an employee relations’ nightmare (not to mention, possibly illegal in your state) to simply erase that and start over. One option is “buyout” which would be popular with employees, I’m sure. Put a pencil to it and discuss the cost with your accountant. There could be some hidden benefits to your bottom line that only your accountant can explain.

     A second option is “freezing.”  This won’t be as popular with employees but, if you give sufficient notice that you will be changing your methods, employees may be able to use some of their banked time.  With freezing, no PTO is granted until current banked time is drawn down to the annual benefit level plus any allowed carryover.  For example, an employee with eight years of service has accumulated five weeks (25 days) of vacation. Under PTO, the benefit at eight years is thirteen days annually plus carry over of two days (15 days). This employee receives no further benefit until the current level of PTO is down to fifteen days in a benefit year.

     Look at special situations such as new hires to pro rate their benefit and place them in the program. For example, with a calendar benefit year, someone hired mid-year would be eligible for a 50 percent benefit. Many of you impose a one-year waiting period for paid time-off. I don’t agree with this approach because an argument can be made that PTO granted after a year is actually for the preceding year. I think employees could argue, at termination, that they are due compensation for that unused time (if any) as well as current year time.

     Even if you do not implement a PTO program, you can use some of these ideas to manage your current system.  Review the language in your employee manual. Avoid words such as “earned” or “accrued” vacation. Make sure that sick leave is described as an annual benefit, available by occurrence only and does not accumulate.

     Explain that, in the event of termination, current year unused benefits are paid on a pro rate basis. This works best if you have a standard benefit year and have clearly stated that the benefit is to be used during the year. If someone terminates in June, for example, and has not used any vacation, you pay 50 percent of the benefit - rather than 100 percent. If they have already taken the time-off, you would owe nothing.

     Keep in mind, too, that the reason for termination doesn’t matter. I see many handbooks with policies pertaining to loss of unused time-off in the event of discharge or, in some times, if the employee fails to give notice. Such policies are not legal in most states.

     As you can see, there is a lot to think about with time-off benefits. It may prove difficult to get a handle on the problem since you don’t see it every day. It’s not like health insurance premiums with a monthly price tag. If you would like to discuss how to tame your company’s tiger, you are welcome to contact me via the HR Help Line at 800-683-3440 or by e-mail at lesley@taxfavoredbenefits.com.

 

Taming the Time-Off Tiger - Part 1

By Lesley Sifers, Tax Favored Benefits, Inc.

     Tigers are beautiful creatures – well known for their stealth and ferocity.  In India, people living near tiger habitat wear hats with eyes painted on the back to discourage tiger attacks since the animals sneak up from behind.

     Paid time-off is like a tiger. It’s a wonderful and highly valued benefit. However, some of your employees probably have unused vacation on the books. Accrued vacation sneaks up on you because it’s not something you look at everyday. It pounces when an employee leaves the company. In most states, you’ll write a very large check to compensate a departing employee for earned time not taken.

     Calls to the HR Help Line indicate a growing problem with accrued vacation/sick pay. People seem to take less vacation time, leading to large amounts of “banked” time.  Some of you remain concerned about this growing liability, while others have questions about payment at termination. Many calls from Nebraska members are the direct result of a recent State Supreme Court ruling that includes accrued sick pay as a “fringe benefit” compensable at termination.

     No federal law currently mandates paid vacations or sick time, although there is a push in the House of Representatives to draft a paid sick pay bill. (Those new Democrats are tigers, aren’t they?) Some states (California) have addressed this, but to my knowledge most currently do not require employers to provide these benefits. You do it because, if you didn’t, it would be extremely difficult to recruit workers.

     Time-off benefits are governed by state law. Twenty-eight states have statutes addressing vacation. Much variance remains between how states view this, but a common theme is that vacation is a form of compensation and earned time not taken is payable at termination. Twenty-one states rely on common law (court decisions) to establish vacation rules. One state (Virginia) appears to have neither, but relies upon what an employer has “promised” translated into what the employee believes was promised.  (Big tigers in Virginia!)

     If you have an employee handbook, I’m sure it includes a vacation policy. Common components of these policies are forfeiture of unused time, limited carryover, or no pay when discharged for cause or failing to give notice of resignation. These may not be legal in your state. It doesn’t matter what you state in your handbook if the law says otherwise. In some states, a contract of employment (or union contract) governs vacation. However, you’ve gone to great lengths to avoid having your handbook interpreted as a contract. In court, if you relied upon your handbook to prove your position, look behind you for the two or three tigers on your tail – they will be disguised as lawyers!

     When you allow earned vacation or sick pay to accrue, you create a liability reflected in your financial reports. In the worst-case scenario, if you closed your doors, employees would be entitled to pay for unused time. As wage increases occur, this liability inflates.  It’s a financial burden, just like “dead” inventory, obsolete parts or some used equipment. And, like a full-grown tiger, it eats a lot – including snacking on your profitability.

     There’s another side to this problem. I hope we all agree that people need time away from work to rest, relax, be with family, and have a life. Sometimes, employees have excessive time accrued because management practices actually discourage taking time-off. Do you severely limit times when vacation is permitted? Are workloads excessive or are you understaffed?  Do your employees lack someone to back-up their work, causing them to dread being away?  I’m not saying you need to change anything, but you should examine this area to see if you could make beneficial changes.

     You may have an employee or two who never takes time-off. Perhaps you think he/she has an exemplary work ethic, total dedication or some such bunk. It’s either the sign of a person with no life outside of work or someone taking you to the cleaners. I have personally dealt with situations where kickbacks and embezzlement were discovered only when an employee was unavoidably away from work and someone had to fill in. I also get calls on the HR Help Line about unacceptable computer use and, guess what, nobody had a clue until the employee was away and someone needed to access that particular computer.

     While researching this topic, I came across a bank policy guideline. It included requiring employees to take a week of vacation annually, taking away keys/access cards prior to vacation, and assigning an internal auditor to examine the employee’s desk, files and computer (including changing passwords) during that week. Apparently, your typical embezzler has to work very hard to cover his or her tracks and can ill afford to be away from work for more than a day or two. (Sneaky tiger!)

     Is there a way to tame the tiger?  There are several things to consider, but most will require changing your ways. Old habits die hard and walking a new path is always a little daunting but, if you can avoid those tigers, why not give it a try?

     First, if you don’t already do so, convert to a standard year for time-off. Tracking employee benefits from their employment anniversaries gets complicated. While the first year does take some calculating to pro-rate new hires, etc., after that, you will be delighted when it’s so much easier to keep records. At this point, you can also address current carryover on the books – possibly with a buyout or a freeze – because you will be implementing a new method to prevent, or at least limit, future carryover.

     Second, take a close look at paid “sick” days. When you give days for personal illness and allow carry over, it’s really extending vacation benefits. It’s not difficult to call in and say you have diarrhea and no one wants to hear more about that! Imagine that Joe makes $8.00 an hour and resigns after ten years. If he accrued three days annually, that’s $1,920.00!  (Feed that tiger!)

     Third, track time-off carefully. We all hate paperwork but you need a paper trail. Create a simple form and require a written request for time-off. Supervisors should complete the form when an employee calls in sick. Take time to provide each employee with a quarterly report showing days taken and remaining. Include a statement that discrepancies must be reported within ten (10) days or the record will be considered accurate.  This allows conflicts to be dealt with in a timely manner, rather than years later when an employee leaves your company.

     I will continue this topic next month with some ideas for redesigning paid time-off programs. Until then, you could try painting eyes on the back of your hat!   Questions, comments, ideas? Contact me at 800-683-3440 or lesley@taxfavoredbenefits.com.

 

The Manager’s Role in Your Dealership - Part 3

By Lesley Sifers, Tax Favored Benefits, Inc.

     In my October article titled, “The Motivation Myth,” I wrote about Maslow’s Hierarchy of Needs. The person who fits best in management is the one who is at (or strives for) level four – esteem needs. These individuals seek responsibility and a sense of accomplishment – something a good manager finds in competently performing his or her function. While this can be someone internally (as I discussed last month), there are some pitfalls, so leave your options open.

     External candidates, even people outside your own industry, may have the management skills you seek. These candidates can bring a fresh perspective to your company. New ideas and ways of doing things might be just what you need.

     Within your industry, you have a great source of referrals and information in your Association. Dealerships are merging and in some cases closing, which puts some very qualified people into the job market. Your Association may be able to provide leads for recruiting these candidates.

     If you advertise for a position, don’t limit yourself by specifying that experience in your industry is a prerequisite for consideration. You are looking for a leader – someone with above average interpersonal skills who understands teamwork and how to help others excel. Don’t discount people with management experience in other fields because, most of the time, you can teach them about your industry and your specific company.

     You will need to obtain a resume (if nothing else, it gives you an idea of writing ability) and an application. The interview is, as always, key to making your selection. With external candidates who have prior management experience, there is an extra step – a very thorough background check with a twist. If possible, have the candidate provide contact information for at least two people who worked for him/her. Your conversation with these references should include delving into the candidate’s management style, strengths and weaknesses.

     Once you have your new manager on board, it’s important to introduce them to the group they will lead. Whether the person comes from inside the company or outside, you should make an effort to personally introduce them to the group and provide some background information about their qualifications. Ask the group to welcome the new manager and help him/her get acquainted.

     I personally don’t agree with telling a new manager which employees are troublesome or exemplary. An individual with true management abilities should be able to form his/her own opinions and, most likely, will come to you to verify them. However, you should offer to make personnel files available to a new manager.

     Like all employees, managers may require some training. Due to the nature of management work, some training will be related to the Human Resource function. One of the responsibilities of management is to ensure that your company operates within applicable HR laws. In fact, inept management and supervision can be blamed for the majority of lawsuits and charges brought by employees.

     Management errors can lead to expensive problems for your company. Common management mistakes involve:

·       Mishandling employee complaints – especially harassment complaints

·       Failure to address and resolve workplace conflicts

·       Failure to document problems

·       Creating a perception of retaliation when complaints are made

·       Fostering favoritism - inconsistent application of policies and discipline

·       Failure to give appropriate feedback or to conduct effective performance evaluations

·       Ignoring provisions of a company handbook or other written policies

·       Careless use of e-mail

     It is well worth the cost and effort to train managers (and supervisors) in basic employment laws. The intent is not to make them HR experts but to overview the pitfalls of FMLA, ADA, EEOC and the rest of the alphabet soup that governs employment. General HR seminars are a cost-effective way to increase awareness. (In fact, you might benefit from accompanying them to a few seminars.)  Courses in management or HR are available at most junior colleges or through correspondence or online course work. Think of this training as preventive medicine – you could prevent a major workplace illness such as a sexual harassment lawsuit. Training is not a one-time deal. Annual or bi-annual refresher training is important too, since employment law is ever changing.

     I hope this series has provided you with some food for thought about management and supervisory positions within your organization. You already know how important these employees are to the success of your company. (Not to mention the fact that, without them, you would have to handle everything yourself.) In the end, though, you are the ultimate manager of your enterprise and so I ask, would you hire you?

     Thank you, as always, for reading my articles. If you have ideas for topics, questions or input (positive or negative), contact me via the HR Help Line at 800-683-3440 or by e-mail at lesley@taxfavoredbenefits.com

 

The Manager’s Role in Your Dealership - Part 2
By Lesley Sifers, Tax Favored Benefits, Inc.

     In my last article, I discussed management responsibilities and the attributes of a successful manager. Finding, developing and keeping good employees remains a challenge when operating a business. It is, perhaps, a more difficult task when it comes to management positions.

     Two tools can prove very helpful in this endeavor.

Tool #1 – Organizational Chart

     One tool is an organizational chart showing the lines of reporting/authority. Such charts can be as informal as a sketch on a yellow pad, or created with a specialized computer program. (Excel spreadsheets are useful for creating organizational charts.)   Regardless of how you create it, an organizational chart helps you define the lines of authority. In addition, it makes it easier for employees to understand how the organization is structured. For managers, it helps define the limits of responsibility and authority. You may also find this chart useful when interviewing candidates for management positions.

Tool #2 – Written Job Description

     A second tool, important for every position, is a written job description. This tool helps you organize your thoughts about the knowledge, skills and abilities a person should have in order to successfully fill the job. It helps identify qualities the best candidate must possess, as well as areas where formal education or training is necessary. Job descriptions also provide a basis for determining what training you could provide. If you take the time to create accurate and realistic job descriptions, you will immediately see how different a manager’s job is from employees such as service technicians or salespeople.

     An important point to remember about written job descriptions is that they must comply with the Americans with Disabilities Act (ADA). This means the job description should include the “essential” physical requirements of the position. Activities like lifting, sitting, climbing, standing, walking, etc. need to be quantified. Working conditions also must be identified, including noise levels, heat, cold, fumes, etc. This is not as difficult or tedious as it sounds and checklists are available to help identify physical requirements.

Finding Management Talent

     Once you have the tools, you are ready to begin the job of finding management talent for your dealership. Where do you look? You will likely consider both internal and external candidates. There are pros and cons for both.

     Promoting from within is common in almost all companies. Perceived advantages are that an internal candidate already understands your business and your unique company culture. In some cases, you may feel that an internal candidate will be readily accepted by other employees. This may well be true as long as that internal candidate has the interpersonal skills in communication and leadership to function as a manager.

     Unfortunately, more often than not, you lose a good technician or salesperson and end up with an ineffective manager. This happens precisely because the skills your current employee has are NOT the skills a manager needs. Lawrence Peter, writing in the late 1960s, coined the phrase, “The Peter Principle.”  This is the idea that, over time, people can be promoted until they reach their level of incompetence. It happens because we assume that if a person is good at one job, they will be just as good at the next higher level of related responsibility.

     As to the argument that other employees more readily accept an insider, if the new manager is not qualified, this initial acceptance soon turns to dissatisfaction. Problems also arise for the manager when he or she realizes they are no longer “one of the gang” but are now “leader of the pack.”  Workplace relationships and friendships have to change and that can prove very difficult.

     It’s often difficult for employees to accept not being promoted. Some people sincerely believe that after many years of service they “deserve” the next promotion. But, length of service doesn’t automatically equate to “qualified for the job.” It’s possible that you have a service technician, salesperson or administrative worker who also has management abilities. But, more often than not, the person who excels at their current job goes into a management position thinking they are the only one who knows how to do things. This leads to the dreaded micro-manager and every other employee’s work environment changes for the worse.

     There can be other issues related to compensation and your expectations regarding the amount of time a manager spends on the job. Someone accustomed to being compensated for every hour of work may have difficulty adjusting to working more hours but receiving a fixed amount of salary. Issues concerning overtime often arise, as well.

     It can be very difficult to avoid this “auto-promotion” syndrome. Remain clear about how you intend to fill vacancies from the start. If you have a handbook, make sure any mention of promotion cannot be interpreted as a guarantee that positions will be filled from within. Stress that you seek specific qualifications for every position, including management slots. Explain that you will consider current employees, but will also look outside for qualified people.

     Treat internal applicants as you would external applicants. This means requiring a resume, application and in-depth interview. Any internal candidate who thinks they are exempt from the selection process is probably not the person you need in management.

     When you interview these candidates, don’t spend a lot of time discussing their abilities in their current job. Instead, ask them how they propose to help others develop into exceptional employees. Ask them for their assessment of co-workers’ strengths and weaknesses and what solutions they might have for addressing employee issues. Have them review the job description and explain how their abilities are a match with what you need. And don’t forget the all-important question, “Why do you want to be in management?”  (Hint, “For the money” is the wrong answer!)

     In the next installment I will discuss external candidates: how to deal with rejecting a current employee; and begin a discussion on management development. Please stay tuned. If you have input or questions on this topic, feel free to call me at the HR Help Line at 800-683-3440 or e-mail lesley@taxfavoredbenefits.com. 

 

The Manager’s Role in Your Dealership - Part 1
By Lesley Sifers, Tax Favored Benefits, Inc.

     In the last issue, I wrote about Maslow’s Hierarchy of Needs as it relates to personal motivation. This theory also relates to selecting the proper people for supervisory and management positions, because they must understand what is important to people under their control and be internally motivated to do their jobs for rewards other than money. (Other sociologists have more traditional theories arguing that money produces better results. Personally, I have only seen that work in the short term.)

     Today’s businesses are complex operations. In all but the smallest enterprise, it’s just not possible for one person (YOU) to oversee every activity. Subordinate managers and supervisors remain key to the smooth and profitable operation of the business. Your challenge is finding and keeping the right people for these important roles.

     Customer satisfaction, employee morale, efficiency and profitability can all be traced to effective management in a particular location or department. Good managers bring out the best in employees, leading to greater efficiency and a higher level of customer service, thereby improving your bottom line. Poor managers de-motivate employees and actually cause problems for employees and customers, translating into expensive problems for YOU! Even though most of us recognize the importance of the manager’s role, many businesses continue to struggle with ineffective or downright incompetent managers and supervisors.

Managers vs. Supervisors – What’s the Difference?

     There is a difference between a supervisor and a manager. For instance, supervisors oversee a group within the organization (i.e. office, shop or parts department). Supervisors generally report to a higher-level manager. Supervisory responsibilities include scheduling work, training employees, and assisting with unusual work-related situations or problems. While supervisors may have input into performance evaluation, disciplinary action, hiring, firing and a host of other areas, they usually do not have the authority to actually hire or fire an employee. However, their recommendations often carry some weight.

     While many skills and abilities required of managers and supervisors do overlap, the positions are not identical. Managers lead and direct a group of people – including supervisors – by communicating company needs and goals and by helping people strive toward those goals. Managers may also help set goals and create strategies for achieving them. Managers often report to the owner or president of the concern. For this series, I will focus on management positions.

Managers – What Do They Need To Know?

     If you remain serious about finding the right person for any position, you must determine the knowledge, skills and abilities required to perform essential functions of the job. Recognize the differences between these positions and the task-oriented jobs that many employees perform. You must clearly understand the role managers play in YOUR business and define your expectations for those who fill these key positions.

     Although managers should understand the jobs people are doing, it’s not essential for them to be able to perform every job. It is far more important for managers to have the ability to work with people (employees, other managers and customers) in a positive way. To do this, managers must:

·       listen effectively - get all pertinent information before making a decision

·       remain calm under pressure - and help others do so, as well

·       think logically - using past precedent and experience as well as specialized knowledge 

·       treat people respectfully and fairly - regardless of their perceived status in the organization

·       put the long term good of the organization above personal gain or momentary reward

·       earn the respect of employees, fellow managers and customers

     Did you notice there’s not one word about writing up a parts order or tearing down a tractor engine? That’s because managers aren’t going to be doing that, are they? They have to make sure a job gets done right, so yes, they need to understand what that entails. However, this type of knowledge can be learned.

     Every manager should have some general knowledge. For example, managers, perhaps more so than other employees, need to know how to speak and write clearly, understand accounting methods and how to use a computer. In the “old days,” management positions came with a secretary (now called administrative assistant), and managers didn’t need to know how to type or spell. Nowadays, it’s more common for managers to write their own letters and prepare financial reports on a computer. Something else to consider is the increasing reliance your company (like all others) places on computer and Internet use. You need managers who embrace this technology because it’s certainly not going away.

     Managers may be called upon to speak to groups of people. I once saw a survey where respondents ranked public speaking as more fearful than snakes! (Guess they hadn’t seen the new airplane movie.)  Sometimes managers conduct training sessions that require a different style of speaking than making a customer presentation or conducting an employee meeting. (I once attended an employee meeting where the CEO announced, “We will be bifurcating the responsibilities of the engineering department.”  Most of the employees thought this sounded like a nasty, bodily function and assumed the engineering department would be eliminated in some fashion. This caused an awful uproar. What the CEO meant was that R&D was going to be a separate department. He would have been better off saying that!)  In short, a manager should either be comfortable with this part of the job or be willing to develop into a competent speaker.

     A lot of this knowledge can be gained through formal education. I personally think today’s managers should have some college level education – perhaps not a four year degree, but at least the equivalent of an associate’s degree in business or human resources. There are reputable universities today that offer on-line classrooms and adult accelerated degree programs. I went back to college later in life and graduated so I know it can be done. I will explore this more in the third article of this series.

What’s Next? - In the next article I will discuss what tools you can use to help find and develop good managers, where to look for managers, and the pros and cons of promoting from within. Please stay tuned. If you have any ideas you would like me to explore in upcoming articles, contact me at the HR Help Line (800-683-3440) or at lesley@taxfavoredbenefits.com.

 

The Motivation Myth
 By Lesley Sifers, Tax Favored Benefits, Inc.

    “How can I motivate workers to do their best?  We offer competitive wages and great benefits but it doesn’t seem to make a difference. Why do so many of my employees seem to do only the minimum to get by?  What am I missing?”

     If you read management books or, God forbid, went to seminars titled “How to Motivate Your Workforce,” you were led to believe that you can create motivation in people. Perhaps you were told that a formal recognition program “motivates” people. Another advisor suggested sweetening your benefit package. Still another consultant claimed that a “Mission/Vision” statement would “motivate” everyone to work toward your business goals.

     While there isn’t anything wrong with that, it won’t motivate anyone since motivation remains an internal force. Remember, everyone has needs and will be motivated to meet those needs. Motivating factors vary from person to person depending upon their situation in life at any given time. In our society, people expect many of their needs to be met through their employment.

     Various sociologists have studied group behaviors in the workplace. (Nice to know what people do with those sociology degrees, isn’t it?)  There are many theories about what motivates people at work. In my opinion, the one who has come closest to reality is Abraham Maslow. In the 1970s, he published his “Hierarchy of Human Needs” theory. His theory explains a progression of needs from basic needs (food, shelter) to an upper level of needs (independence, self-expression) in five levels. Essentially, a person cannot be motivated to a higher level until needs at a lower level are met.

     The easiest way to explain how employment plays into these motivational needs is to tell a story. Let’s say you hire a new person, Ima Worker, as an Accounts Payable Clerk. Ima has been looking for a job for about two months so she is thrilled when you hire her. (This meets her first level needs for food, clothing and shelter.)  Ima performs well and, at the end of the Introductory Period, you give her a small increase in pay and enroll her in various benefit programs. (This meets her second level needs for safety and security.)

     Ima gets along well with everyone and is a “team player.”  This, in part, is the result of meeting those lower level needs so she can strive to meet the next level of needs – social needs. These needs include group acceptance, being part of a team. But, after two years, you notice a subtle decline in her work performance. As a good manager, you sit down with Ima to discuss some small problems that have arisen.

     Ima is apologetic but finally admits that she feels her work is underappreciated (remember, needs are about feelings and men have them, too). She isn’t unhappy about money or benefits, and she has good relationships with her co-workers, but the work no longer seems interesting. (This is level four, where esteem needs include a sense of accomplishment, recognition and self-respect.) At this point, Ima reminds you that she does have a degree in Accounting and would like the opportunity to use her knowledge and experience in a more productive way.

     Now you are in a quandary. You don’t want to lose Ima, but you don’t know what to do to make her job more rewarding. After all, Accounts Payable is what it is. So, you ask Ima what she thinks needs doing and how she would propose doing it. (By involving her in the planning process, you also meet the highest level need for self-realization, including planning your own work and expressing creativity.)  This turns into a win-win situation. Ima is happy and you are getting some projects done.

     Whew!  You met every one of the criteria for Maslow’s Hierarchy of Human Needs and you did it with great success. But now Ima tells you that her husband has lost his job. She is worried about the bills and wants to talk about a raise. It appears that you may be back at level one.

     That’s the problem with trying to motivate people. You can spend a great deal of time and energy trying to “motivate” your workforce but, in the end, what motivates one person may have no effect on the next. It may be more productive to think about how you can avoid DE-motivating workers.

     We will continue to look at this topic and others in a series of articles about management and supervision. Stay tuned. If you have suggestions, complaints, questions or any input for this column, please call me on the HR Help Line at 800-683-3440 or e-mail lesley@taxfavoredbenefits.com. 

 

Part-Time and Temporary Employees - It’s About Time

By Lesley Sifers, Tax Favored Benefits, Inc.

     During busy seasons, many employers use temporary or part-time help to fill in for vacations and seasonal increases in the workload. Students are available and their employment provides a willing worker who gains some valuable work experience. What is a “part-time” employee?  What is a “temporary” employee? Curiously enough, our friends at the Department of Labor (DOL) have never graced us with definitions. (Don’t worry - they will probably get around to it one of these days!) What is so important about time in the workplace? Well, if Microsoft can get in tons of trouble for misclassification of employees, so can you.

     A part-time employee usually works less than 30-35 hours per week on an on-going basis. Many employers use part-timers to perform duties that simply don’t require 40 hours per week. In some cases, such arrangements are an accommodation for someone who isn’t seeking full-time work or, in today’s workplace, those who are transitioning into retirement.

     Temporary employees can work a part-time or full-time schedule for a finite, and relatively short, period of time. Temporaries are normally used for special projects or to fill in when regular employees are on vacation or leaves of absence. The length of employment should be established up front. It’s best, if you are actually putting a temporary person on direct payroll, to have some sort of written agreement. Be careful not to establish an employment contract, however. If the circumstance that justifies hiring a temp is longer or shorter than anticipated, you will want to have the latitude to conclude or extend the arrangement.

     Benefits can become a problem with both part-time and temporary workers. Check the plan documents that govern your health insurance and other fringe benefits, as well as your retirement plan. With some benefit plans, you can address these issues when establishing eligibility requirements. You may be able to exclude certain classes of employees from health insurance coverage, for example, by establishing an hours requirement less than the 30 hours per week customarily used.

     Retirement plans are more restrictive because they must comply with IRS and DOL rules. For example, the maximum eligibility requirement for employee contributions to a 401(k) plan is age 21, twelve months of service during which the person works 1,000 hours, and employment on an entry date. A part-timer who continuously works three days a week is likely to be eligible for a 401(k) plan and any employer match as well. In the Microsoft case, it was a stock option retirement program that started the brouhaha. Employees classified as “temporary” and/or “part-time” actually worked past the eligibility for participation. It cost Microsoft close to $100 million to resolve the issue.

     Several years ago, one of our retirement clients began sending 401(k) employee contributions for an employee but did not send the normal matching contribution. When asked about this anomaly, the client explained that the person was part-time, and even though he had met the age, service and hours requirements for participation, he was “not entitled to benefits.” Most retirement plans can’t work that way. The employee was entitled to matching contributions and, if he continued to work at least 1,000 hours in a Plan year, he would earn vesting credit toward ownership of those contributions. In addition, he would be eligible to receive profit sharing contributions if any were made in the future.

     Another highly prized benefit for any employee is paid time-off: vacation, holiday and sick pay; jury duty pay; and time-off for voting. These types of benefits are usually covered by specific state statutes. Military leave and Family Medical Leave are covered under Federal laws. There is usually little or no distinction between classes of employees under state and/or Federal laws. Most employers communicate these benefits in an employee handbook or other written personnel policies.

     Problems often arise when a part-time employee works a full-time schedule for a period of time. For example, a part-time clerical person assists the Office Manager who takes a medical leave for several months. During this time, the assistant works longer hours. This may be convenient for you but the part-timer might now meet the definition of full-time and be eligible for benefits. The same is true of a temporary employee who stays on your payroll longer than three or four months.

     The key to making the best use of part-time and temporary workers is to monitor hours worked to ensure that, in actual practice, these classes of employees do not become full-time. You should also be familiar with the eligibility requirements of your benefit plans and the impact of any applicable state or Federal laws. Periodically review benefit plan documents and your employee handbook to ensure those documents accurately describe eligibility for benefit plans.    Part-time and/or temporary employment can be a win-win arrangement if both parties understand the limitations.

     If you have questions on this topic (or any employment-related matter) please feel free to call your HR Help-Line at 800-683- 3440 or e-mail Lesley@taxfavoredbenefits.com.

 

Can You Hear Me Now?  Cell Phones in the Workplace
 By Lesley Sifers, Tax Favored Benefits, Inc.

     At the gas station, while paying for a tank of liquid gold, the youngish clerk’s cell phone rang. Naturally, he stopped in mid-transaction to take his personal call. Turning his back to me (and the open cash drawer) he asked his caller, “Can you hear me now?” Were I of a criminal persuasion and about a foot taller, I could have reached over the counter and helped myself to a handful of bills. Instead, I started laughing as he continued with his call until he remembered the cash drawer was open and he owed me $3.16.

     Cell phones have proliferated faster than farm cats in summer. It seems like everyone has one and some feel compelled to talk on it non-stop.  If what I see at retail stores is any indication, most businesses must deal with this new technology. Unfortunately, even the giants of the retail industry seem hard-pressed to check this annoying employee behavior that not only alienates customers but can be, at its worst, dangerous.

     Most people are not that good at “multi-tasking,” especially when engrossed in a personal phone call. People in office positions really cannot do what you pay them to do if they are distracted. Those in your shop may pose a danger to themselves and others if they aren’t concentrating on the job at hand. And little doubt remains that talking on the phone interferes with concentration.  If you haven’t noticed this with people driving and talking on the phone, then you just aren’t getting out enough.

     Employees who deal with your customers, like the gas station clerk, should never, ever be allowed to take personal cell phone calls when assisting someone. It’s rude and insulting. Why does it appear to be tolerated when rudeness takes the form of talking on one’s personal cell phone?  My common sense tells me it’s no different than any other form of rudeness for which most employees would be dismissed.

     Fortunately, most of us are not “giants of the retail industry” so we have the luxury of using our common sense to deal with the problems created by new technology.

     Let’s begin with the assumption that the majority of those cell phone calls are personal, non-emergency calls. If you have a handbook, you have probably addressed personal phone calls in some fashion. Perhaps you have stated that employees are to make and receive personal calls only on breaks or lunch. Is there a difference between personal phone calls made or received on company phones as opposed to employees’ cell phones?  Common sense tells me there is not. Use your disciplinary process to address the problem.

     You are not required to have a handbook or written policies to deal with unacceptable behavior.

     You are in charge of your business and you make the rules. Use your common sense and tell the offending employee(s) to stop it. (Can you hear me now?  The phrase is, “STOP IT!”)  You have every right to take disciplinary action when warranted.

     Company issued cell phones pose other issues. You can assume those phones will be used, to some extent, for personal calls. It’s up to you to draw the line between acceptable use and abuse. Many cellular service providers send detailed bills or other tools you can use to determine if an employee is abusing a company phone. Take time to examine those phone bills or assign the task to someone who is really good with numbers!  Common sense will tell you when an employee’s phone use is not proportionate to his/her position or production. Start by having a frank discussion and explain what you expect. In some cases, you may be due reimbursement. Handle it the same way you would if an employee made unauthorized long distance, personal calls on company land lines.

     When you crack down on employee cell phone use, you will probably hear, “I need to keep my phone on for emergencies.”   Common sense tells you that an average employee doesn’t have more than one emergency per day. Of course, that depends upon the definition of “emergency,” which differs from one person to another nowadays. Real emergencies are about car wrecks, hospitals, fires, missing children – they are not about bringing home a gallon of milk. Ensure employees that emergency calls can be made to the company number and will be handled appropriately. Isn’t that how it was done in the days before cell phones?

     Several weeks ago, I was asked if I had any pre-written policies on employee cell phone use. At the time, I thought I should probably write one. Then, common sense kicked in. The issue of employee personal phone calls is already discussed in most handbooks. It’s the same thing you have all had to deal with in the past. A phone is a phone, even the ones that have little cameras in them. Can you hear me now?

     Have questions, comments or feedback?  Call me at the HR Help Line (800-683-3440) to talk about this or any other HR topic on your mind. You can also e-mail me at lesley@taxfavoredbenefits.com.

 

Summertime and the Minors are Working: It’s Not So Easy

By Lesley Sifers, Tax Favored Benefits, Inc.

     It’s time for our annual update on Child Labor Laws. Federal law covers the employment of minors (anyone under age 18) in great detail, including permitted work hours, types of work allowed and quite specifically, driving.  In some states, additional restrictions or requirements may apply to the employment of anyone under age 18. Check your specific state law for additional rules or requirements if you intend to employ minors.

     Federal law limits the work hours for minors. A person age 14-15 is permitted to work up to 40 hours per week – no more – when school is not in session. At age 16-17, while there is not a restriction on hours, overtime pay applies to hours over 40 in a workweek. (I find it unlikely that you would hire a minor to work in an “exempt” position.)

     In addition, federal law addresses the type of work allowed for persons under age 18. “Hazardous” work is not permitted – there is a long list of hazardous jobs at the DOL website. In 2004, the DOL expanded their list to include roofing. So, if you were considering having your summer help retar one of your outbuildings, forget it now. Anything related to roofing, or any activity that brings a minor into “close proximity” with a roof, is prohibited.

     Any type of work that involves operating a vehicle – including farm equipment – is prohibited or severely limited for minors. Anyone under age 17 is prohibited from any kind of work-related driving. While you may assign limited driving responsibilities at 17, there are legal restrictions on the number of trips, distance and time of day. In no case is a minor allowed to carry passengers. You should also check with your insurance carrier for their opinion on allowing a minor to operate a vehicle for work-related purposes, including short errands.

     Compliance with Child Labor Laws is easier if you understand the intent of these laws. Our laws are intended to prevent the injury and abuse of young workers. It was a different world in the early part of the last century. Children as young as eight or nine worked in coal mines, meat-packing plants and manufacturing sweatshops in this country. Our laws evolved to address the deplorable conditions under which children were often forced to work during an earlier time.

     From a purely business perspective, these laws still make sense. Consider the impact on your business if a person under age 17 is injured or, God forbid, killed on the job. Your work comp carrier would drop you like a hot potato – not to mention the OSHA investigation. And, if that person (under age 18) happened to be driving on company business, well, you may as well lock your company doors and throw away the key.

      However, there is a huge advantage to employing young workers. Today’s youth remain the future workforce and you have an opportunity to mentor these youths so they could be productive citizens someday. (After all, our future Social Security benefits may depend upon it!)

     Your real challenge is not compliance with the law – it is managing youth workers. If you cannot be personally involved, make darn sure your supervisors and store managers understand what the law permits and prohibits. Make sure that everyone understands that a young person is not a “flunkie” or someone who can be subjected to teasing and ridicule that could be considered illegal harassment.

     By the same token, don't allow young workers to behave badly. This includes flouting safety rules, abusing privileges, being late or absent, etc. If you have to tell them once that they are acting inappropriately, don’t hesitate to terminate them if they misbehave a second time.

     This topic is close to my heart because my first real job (at 15) was in a printing shop after school and during summer vacation. It was that reference that helped me get a job ten years later when I re-entered the workforce. So please, don’t hesitate to give a kid a chance. You may find it one of the more rewarding experiences of owning a business.

     Now, if you still believe you must understand details of the Child Labor Laws, here is the most helpful website: www.youthrules.dol.gov or by telephone, 1-866-4USWAGE.  You can also access past articles on this topic at the I-NEDA website archives www.ineda.com.

     Have questions, comments and/or negative feedback?  Call the HR Help Line at 800-683-3440 or e-mail lesley@taxfavoredbenefits.com.

 

HR Help Line Bits & Pieces
By Lesley Sifers, Tax Favored Benefits, Inc.

     This column is a potpourri of topics I’ve discussed with Association members on the HR Help Line in the past several months. While it’s in “Q&A” format, that’s just for my writing convenience – these are not the exact questions posed.

Q1:  Our Accounting Clerk is paid a semi-monthly salary. He says he works an average of 44 hours a week and expects to be paid overtime. Salaried employees aren’t paid overtime, right?

A1:  Maybe! There are two tests to determine if a salaried person is exempt from overtime rules. One, is he paid at least $23,660 per year? Two, are his job duties mainly non-ma