2015 New Year’s Resolutions for Employers
- Review and Plan: Most employers understand that HR problems can derail a business operation. Accordingly, business owners/managers should conduct a review of 2014 HR issues/problems and develop a plan for successful 2015 HR management.
- Review/Update Employee Handbook and other Employment Documents: Employment laws are constantly changing. Your business is changing. If you have not reviewed and updated your Employee Handbook, job application, offer letters and other employment-related documents in the past few years, they are likely out of date (and potentially legally insufficient or illegal).
- Conduct Harassment Training and Ensure all Employees have Acknowledged Receipt of Policy: The U. S. Supreme Court has provided employers an affirmative defense to harassment/discrimination charges (in certain circumstances) if an employer has a proper anti-harassment/non-discrimination policy in place, that has been effectively communicated to employees, and the complaining employee has not utilized such procedures. Accordingly, all employers need to: (a) ensure that they have well drafted harassment/non-discrimination policy; (b) make sure employees sign receipt that they have received such policy; (c) provide training to all employees and managers about such policy. This should be done annually and for all new employees.
- Review/Update/Implement Confidentiality and Non-Competition Agreement: Your business trains employees, introduces them to your clients and vendors, provides them access to your technology and trade secrets, if your business does not have a Confidentiality/Non-Compete Agreement in place, it should. Further, if you have an existing Non-Compete Agreement in place, unless drafted by an attorney and reviewed/updated in past few years, it could be outdated and unenforceable. A good agreement should: (a) protect Confidential Information/Trade Secrets; (b) provide intellectual property rights for employer through “work for hire” provisions; (c) prohibit former employee from recruiting your employees/contractors; (d) prohibit former employee from soliciting clients/prospective clients; and (e) depending on your business, prohibit your former employee from competing with your business on limited (duration and geography) basis.
- Review Employee/Contractor Classifications: First, make sure you have employees and independent contractors properly identified. If your business controls the when, where and how of the relationship, the person is likely an employee and, as such, must be paid on W-2 basis. If person has their own business, works for multiple companies, has his/her own equipment, carries business insurance, has website, he/she is likely independent contractor and can be paid on 1099 basis. If any confusion, ask your attorney. Second, the Fair Labor Standards Act (“FLSA”) defines exempt and non-exempt employee categories. Exempt employees do not need to be paid overtime for work over 40 years in a week. If you have not done so in past year (with a knowledgeable attorney or HR professional), review all employment positions and ensure that employees are properly classified. Finally, make sure your business understands the FLSA rules with regard to payment obligations.
- Review/Update Performance Evaluation Process: Effective HR management generally leads to hard-working employees striving to help their employer grow and succeed. Without an effective performance evaluation process (“PEP”), employees are often confused, frustrated and unsatisfied. Further, and from a legal perspective most importantly, without an effective PEP, an employer may not have a documented paper trail to substantiate employment termination decisions when faced with a discrimination charge. Accordingly, at a minimum, all employees should undergo formal PEP on an annual basis (it is recommended that there also be semi-annual mini-PEP). Further, any time employees make mistakes or are reprimanded, there should be formal documentation of such actions. When an employer has effective communication with employees through PEP and documentation of any mistakes/reprimands, not only are employees more likely to succeed, but also, if such employee needs to be terminated, the employer has strong evidence supporting the employment termination decision.
- Fire Problem Employee(s): You likely have heard the express “hire slow, fire fast.” It is true. Unfortunately, too often employers don’t want to fire problem employees for a myriad of reasons. And, too often such problem employees are not only putting a tremendous operational drain on the business, but also they are the employee who is likely to file a discrimination lawsuit when finally fired. So, resolve in 2015 to fire (as soon as possible) your problem employees. Make sure you have documentation and substantiation for termination decision. Fire them. It is amazing how often times after a problem employee is terminated there is general improvement in morale and productivity in a business.
- Make Sure Your Business Has A Good Employment Law Attorney: Finally, when your business is getting ready to make an employment-related decision, whether hiring, granting leave, or a termination decision, you should not make the decision without legal counsel. You should have a good employment law attorney you can call to make sure that you are not missing any landmines.