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As we approach 2022, all employers should review and update human resources/employment policies and procedures. This is particularly important with the challenges and changes in employment law during the past two years. Provided below are eight topics all employers should review.
1. Review and Plan: Most employers understand that HR problems can derail a business operation. Accordingly, business owners/managers should conduct a review of 2021 HR issues/problems and develop a plan for 2022. With COVID and remote working (often in different states), planning is more important than ever. If you don’t have strong HR policies and an established HR culture, you need to plan and develop.
2 Review/Update Employee Handbook and other Employment Documents: Employment laws are constantly changing (especially in the past two years). 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handbook, job application, offer letters and other employment-related documents in the past few years, they are likely out of date (and potentially legally insufficient or illegal). District of Columbia, Maryland and Virginia employment laws have all changed in past few years. You need to review and update your policies and procedures. And, of course, if you do not have COVID-related policies in place, you must.
3. 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.
4. 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, so 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 the 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 employees from recruiting your employees/contractors;
- (d) prohibit former employees from soliciting clients/prospective clients; and
- (e) depending on your business, prohibit your former employee from competing with your business on a limited (duration and geography) basis.
Also, in the past year, Virginia has outlawed non-compete agreements for low-wage workers and the District of Columbia has passed broad law outlawing non-compete agreements (but the DC law is not yet in effect).
5. Review Employee/Contractor & Exempt/Non-Exempt 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 a W-2 basis. If a person has their own business, works for multiple companies, has his/her own equipment, carries business insurance, has a website, he/she is likely an independent contractor and can be paid on a 1099 basis. If there’s 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 the 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.
6. 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, 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.
7. Fire Problem Employee(s): You likely have heard the expression “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 2022 to fire (as soon as possible) your problem employees. Make sure you have documentation and substantiation for the termination decision. Fire them. It is amazing how often times, after a problem employee is terminated there, is a general improvement in morale and productivity in a business.
8. 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. Merritt Green with General Counsel, P.C. has over 20 years of experience helping employers and would be pleased to assist. He can be reached at firstname.lastname@example.org.