From Embezzlement to Wage and Hour Compliance:

The Four Most Important New areas of Employment Law

Small Employers Must Know in 2012.

 Be a savvy employer.  Sign up for the webinar here and enhance your knowledge! (Everyone that signs up will be sent the rebroadcast)

Webinar Broadcast is Tuesday April 17th, 7pm EST

When it comes to wage and hour issues and employment laws, there is no doubt that small employers are being targeted for enforcement like never before. That makes 2012′s Employer Update even more important. It is designed to help you identify wage and hour problems, and it will help you resolve mistakes that leave you and your practice vulnerable.

You’ll learn:

1.  Wage and hour enforcement, including California’s and New York’s Wage Theft Acts.  It’s a trend across the country.

• Among an epidemic of new ambiguous and employee friendly laws, employers must now give wage notices to each employee and again whenever their rate or method of pay is changed.
• Employers and Managers are now personally responsible for certain types of wrongful terminations and wage and hour violations.
• At least 15 other states have some kind of wage notice requirement.

2.  At Will employment does not protect employers the way it used to. 

• You must document instances where employees have violated policies
• You are responsible for knowing laws about final paychecks and deductions
• You need to ensure you have no outdated or unlawful policies.  (For example, prohibiting employees from discussing their wages with each other is NOT LEGAL.)
• Outdated, borrowed, and downloaded handbooks are like borrowed toothbrushes – DANGEROUS!
• If you do not have a handbook or are missing critical policies (like progressive corrective action), make sure you understand that ALL the laws and rules favor your employees, not you.

3.   Wage and Hour Crackdown

• Non-exempt employees must record all hours – no matter how you pay them.
• You must pay for all job-related travel and seminar training, with very few exceptions.
• You must pay for unused vacation or PTO at termination in at least 35 states.  (Who will you call to determine what the rules are in your state?)
• The belief that hygienists can be excluded from overtime or that paying them high commissions excludes them from overtime is almost always NOT true.
• Hygienists and Associate doctors are not independent contractors.

4.   Embezzlement is rampant - Five things you can do to protect your assets.

• Enforce a policy against sharing passwords.
• Activate those pesky permission levels.
• Don’t use personal email for work.
• Break the chain between payments received and payments posted.
• Investigate suspicious behavior- embezzlers are almost always trusted and have been with the practice for years.

We can be reached  at 866 414 6056 or 602 476 1418. or by email- info@cedrsolutions.com or on the web at www.cedrsolutions.com

We find that employers often don’t understand that bonus systems/programs are subject to wage and hour rules. In fact, most employers haven’t a clue that bonuses affect overtime, often do not qualify for the infamous “discretionary” clause, and that if offered, need to be governed by a comprehensive and separate bonus policy. When done properly, this approach allows you to change and amend your bonus system at any time, including discontinuing one that is not working.

Bonuses or “pay for performance” solutions are a hot topic across the small business world as employers seek ways to engage and reward employees who perform well.  More and more,  bonuses are being used  to encourage employees to embrace and try new things.  On the downside, they are often used as “cure alls” for whatever ails a business. While this post does not address different types of bonus programs or their merits, employers need to know that wage and hour enforcement responses to employee complaints about bonuses are now routine.  

So we ask a couple of questions. What you would do in any of the following instances? And would you pay out the bonus?

What if an employee quits in the middle of the week or month in which a bonus is due?

What if they get fired?

What if they are great at the conduct that earns them the bonus,  but really bad at showing up on time?

What is the bonus for? Is it a reward for doing a great job or is it for anyone that does an OK job?

Is it contingent on anything else? Can it be?

Can you, at your discretion, just not pay out a bonus that has been earned by stating it in a policy?

Is there an eligibility requirement? Should there be one?

Why not just lump all this stuff into one program?

Can I get the best of both worlds by keeping my discretionary bonus and offering something to reward individuals?

For answers to these questions, you need to understand the difference between discretionary and incentive-based bonuses. At the bottom of this article we provide a couple of sample bonus policies.

There are many different kinds of bonus and incentive programs.  For simplicity, they are broken down into two categories: discretionary-based and incentive-based bonuses. Discretionary- based policies are more subjective and general.  Incentive-based policies are based on a formula, or tied to specific goals, either individually or for the whole team.

Cautionary Note about Incentive-Based Bonuses:  Bonuses tied to individual job performance or to organizational performance  tend to be considered an element of regular compensation, especially if given on a regular and consistent basis.   This means an employer can get into a lot of trouble for not paying a promised bonus at the time of termination.  Employers have been held legally responsible for bonuses expressly promised to employees as incentives. Once the worker has satisfied whatever criteria the employer has established to qualify him or her for the bonus, courts typically order the employer to pay.  This is especially true where the salary or wage is small, and the bonus proportionately larger.

Policy Checklist

• Consider the amount of the bonus you plan to offer. It should be more than a mere gesture, but not so much that it will be devastating if withdrawn or restricted.
• Leaves of absence.  Employees who have taken any leave of absence should not be disqualified from a bonus given to all other employees, as this may imply some type of discriminatory motive. For example, most leaves of absence at small practices generally involve medical leave for pregnancy. Therefore, excluding employees on that basis has a disparate impact on pregnant women.  However, a bonus may be prorated based on the actual days/hours worked during the bonus period.
• Most states require that all forms of remuneration, including bonuses, be treated as wages when figuring the amount of gross payroll for unemployment compensation tax purposes.
• Subjective portions of any bonus/incentive should be determined by a team or committee (e.g., manager, supervisor, or office manager), not just one person.
• If you are giving discretionary bonuses and want a specific way to  incentivize your employees, consider giving an “award” distinct from a bonus.  For example, give recognition for perfect attendance by offering an extra privilege or a paid day off.
• If you want to discontinue or amend a bonus system, it is often best to pay the bonus based on your employees’ current understanding of it, then address changes in writing with an “effective as of” date.
• Establishing a separate bonus policy allows you to modify and use a variety of bonus systems without having to alter and update your employee handbook.

If you have an employee handbook that doesn’t have a bonus policy and
you are wondering what else you have missed, now would be a  good time
to contact us for an evaluation. Call us and we’ll waive the fee.
Just let us know you read this post. Learn more here

Below, you will find two example bonus policies adaptable to most practices.

Example of Discretionary Bonus Policy
Example of Incentive Bonus Policy

You have questions? We have answers.

If you haven’t already- Fill out the form and download the toolkit from any page on our website
Become a Savvy employer or manager and sign up for our Employers Solution Series here. It is free.

Questions about this trainer?

Use the  chat box to speak with an expert or submit your question(s) to info@cedrsolutions.com

OR

 Please call us at 602 476 1418. Just let us know you have a question about one of our trainers.

The country’s unresolved economic problems are adding fuel to the job discrimination fire and driving the increase in charges filed with the U.S. Equal Employment Opportunity Commission (EEOC).  Unfortunately, this news affects businesses of all sizes, even those with just one employee.

Last month, the EEOC revealed that it received 99,947 charges of job discrimination in fiscal year 2011, the highest number of charges in the Commission’s 46-year history.

Even small business employers can blame more than just the economy for the critical need to revise their employment policies.  In 2011, the EEOC received a major cash infusion and redoubled its enforcement efforts.  It stepped up its outreach and education efforts to directly reach 540,000 workers.  By pursuing charges more aggressively than ever, it also reduced its long list of pending charges by 10% for the first in 10 years.

What does this mean for employers?  It means discrimination claims are no longer languishing in a bureaucratic tomb, never to be seen again.  It means the Commission is now more willing than ever to enforce employee rights.

Overall, 5.4 million workers reaped the benefits of new laws designed to benefit employees during the past fiscal year.  For employers, the only access to protection is through an up to date, compliant handbook.

How do you keep up with rapidly changing policies and practices?  How do you navigate the long rules and legal jargon?  Most of all, how do you achieve the peace of mind needed to focus on your business?

Here are a few helpful tips:

• Attract the right employees and develop a strategy for keeping them on-board, using a hiring guide like CEDR’s.
• Job descriptions create clear expectations and eliminate the confusion that often leads to disputes.  CEDR customizes job descriptions for members.
• Adopt a progressive discipline policy to ensure you are documenting appropriately, effectively, and with an eye toward defending EEOC charges.
• Stay up to date on relevant state and federal legal developments, a service CEDR provides for about $3 per day.

Compliance is not getting any easier. If the economy does not turn around soon, it is likely to get much harder. Call the CEDR Solution Center for expert advice on all your workplace needs.

www.cedrsolutions.com

(866) 414-6056

solutioncenter@cedrsolutions.com

On September 23, 2011, the Seattle mayor signed into law the Seattle Paid Sick Time and Paid Safe Time Ordinance.  This law, effective September 1, 2012, requires all Seattle employers with 4 or more employees to provide specific amounts of paid time off for personal illness, family care, and other purposes called “safe time”, including business or school closures due to weather or other emergency and domestic violence.  Ordinances such as this are a growing trend in cities across the country.

Expand your knowledge of the new law here.

Seattle employers should plan to update their vacation/paid time off benefit plans NOW.  Here are some highlights of the new law:

•   Accrual and amounts vary with business size.  However, most small businesses with 4 to 50 employees will be required to provide 40 hours (5 days) of PTO annually, accrued as one hour of PTO per 40 hours worked;

•   Employees may use accrued PTO after 180 days of employment;

•   The rule applies to full time, part time, and temporary employees;

•   Employers may NOT require a doctor’s note or other absence verification for absences of three days or less;

•   Unused amounts must be carried over and “use it or lose it” policies are prohibited;

•   Employees may forfeit at termination.

The 50-page ordinance is complex and may be subject to legal challenges.  Accordingly, CEDR will provide additional updates and details as the deadline approaches.

What should you do?

Consider the impact of this new rule on your business now, as you plan hiring, benefits, and raises.

As part of their membership, active CEDR Solution Center members with CEDR employee handbooks will receive updates before the new law takes effect.

ESS members who do not yet have CEDR’s handbook should contact us for an evaluation of their employee handbook and determination if their handbook complies with federal and state laws.

Remember, CEDR works with practices with anywhere from one to 100 employees.

Reach us by phone at (866) 414 6056 or schedule a convenient time for CEDR to call you using our interactive calendar.

Non-Exempt Employees:  Non-exempt employees do not have to be paid for office closures, as long as you notify them in advance of reporting for duty.  In some states, however, once an employee reports to work, if they are then sent home, they must be paid for a minimum amount of hours as “report-in pay.”

Report-in Pay states (call for details):    CA, CO, DC, KS, MA, MN, NH, NJ, NY, RI

Exempt Employees:  Exempt employees are a bit trickier. Here are the rules:

Salaried exempt employees who are out for a full day or more due to office closures must be paid the same salary as long as the office is closed for less than a full week.  However, exempt employees can be required to use any paid time off or vacation available for these days off.

If the office is closed for a full week due to an emergency such as power outage, you can prorate or deduct pay for the entire week not worked.

Practice Tip:

Be sure to create a record of your efforts to notify employees of the office closure and that they should not report to work.  If you use email, you may also want to follow it with a phone call and make a record because many employees may not have internet or power at their homes.  Your obligation is to make reasonable efforts to prevent them from wasting a trip to work.

Questions on this or other employer issues?

Call 866.414.6056

Please give us a call at 866 414 6056. Or, you can schedule a convenient time for us to call you using CEDR’s convenient, interactive calendar. Click the ‘Tungle.me’ button below.

What:  The November 14th, 2011 federal deadline has been changed to January 31st, 2012.

Who: ALL CEDR Members

When: We will begin mailing updated federal and state posters to our clients by November 15th. Posters are included in your monthly membership fee.

Non-clients and ESS members may purchase federal and state posters through CEDR’s Compliance Store.  Use discount code cedr2011 at check out to receive 20% off.

Purchase posters here

Common Questions about the NLRB Poster Rule

1) What if my workplace is nonunion?

NLRA rights apply to union and non-union workplaces; thus, employers with and without union workforces must post this notice.

2) What if I operate a small business?

Hospitals, blood banks, other health care facilities (including doctors’ and dentists’ offices) who earn more then 250k are within the NLRB’s jurisdiction and must post the notice.

3) Does CEDR work with all practice sizes?

Yes. In fact, many of our practices have less than ten employees. Some have as many as 50 or more.

4) What if I still have questions?

Watch the video. If you still have questions, submit them using the form below. We will reply shortly. You may also request CEDR’s free training titled The NLRB and Your Small Business by using the form below.

“Look, I know I did this backwards, but I hired someone and now we have a problem.  She seemed great in the interview, but after we hired her, we discovered [insert inappropriate/shocking/ stupefying/scary behavior here]. So, I decided to call her references and you are not going to believe what I found out…”

You may be surprised how often this situation arises.  The doctor or manager failed to check the new employee’s references or do a background check, only to discover s/he had been dismissed from multiple businesses for suspicious or inappropriate conduct, served time for embezzlement or fraud, is working under a suspended license, or has sued four out of five of their last employers.  While CEDR can help your office through these issues, wouldn’t it be better to have avoided that “bad hire” all together?

We employers have a serious quandary. We all want to know the “goods” on a new hire, but we’re all gun shy to tell each other the truth when the next prospective employer calls. And for good reason.  We’ve been wisely advised not to discuss the details of a former employee unless we want to be sued.  Accordingly, rather than call an applicant’s former employer, usually the best predictor of future performance, we skip it thinking it’s probably just a waste of time, and instead we go with our gut.  But often the best manipulators/deceivers/embezzlers are also the best at interviewing.   What we all need are ways to avoid costly hiring mistakes, get the goods, and hire smarter.  

Embracing our Five Secrets to reference checks is a great place to start. 

Aside from hiring a professional to do a background check (which is always advisable), what can YOU do?  Well, first, you need to be extremely careful about conducting your own internet search.  Looking up the applicant’s social media page, or doing your own mini credit check is a bad idea.  Information available on the internet can be inaccurate, outdated, or false.  If you rely on it, you risk eliminating qualified candidates based on useless information.  Additionally, because you can’t “unlearn” protected information you discover on a personal webpage, like the applicant’s sexual orientation or that he’s a cancer survivor, you could end up being accused of discriminatory hiring practices.  If there’s a provable indication that you knew of the applicant’s protected class and allowed it to affect your hiring decision, you may end up party to a lawsuit.  But there are a lot of things you can do on your own, and to get the information you need to make an informed hiring decision.

What if you don’t want to do a full-fledged background check, but simply want to verify information or check references?  Provided you’re not pursuing confidential, sensitive information or obtaining credit information, you can use Google or use another search engine to verify applicant information or conduct reference checks.  Learn more details in our SECRETS below.

Five Secrets to Reference Checks

Secret 1:  Get the Applicant Talking.  Before even trying to verify references from third parties, why not get the information from the source.  Near the end of your interview, tell the applicant that it is your standard policy to verify references and ask them if there is anything they want to explain before you do.  You will be surprised how many confessions you get.  The process also gives you insight into the kind of person you are dealing with and how they handle stress. It will go something like, “Well, they will tell you that I threw the doctor off the building but I want you to know he jumped. I swear!”

Secret 2:  Make Applicants Back it Up with Documents.  If the job requires a state certification, license, or the applicant claims s/he has a certain level of education, get supporting documents.  Require a copy of the license, degree, transcript, or diploma.  Then, check it thoroughly. Anyone can pay around $200 for a credible and professional looking counterfeit diploma with transcripts.  So, do look for signs that the document has been altered, faxed from a different number than the granting body’s published fax number, or has any spelling or name discrepancies.

Secret 3: Don’t Take Their Word for It.   Ask for the prior employer, school, or accrediting body’s address and contact number.  Then, use the internet to confirm the address provided isn’t in the middle of the Hudson River, and verify that the address and phone number are published numbers for the business, and not just their buddy posing as a manager.

Though you should always ask for specific, detailed contact information to confirm work history, prior employment, and education, you must dig a little deeper.  CALL THE NUMBERS and don’t just ask for the name provided.  Ask to speak with the person responsible for verifying transcripts, hire dates, etc., and get the person’s title and name that you speak to.

Secret 4: Read Between the Lines.  As you know, former employers are likely  to be closed-lipped in discussing their former problem employees.  But if you pay attention to the signals, you will learn a lot.  Always ask the question, “Is the person eligible for rehire?”  Even if they won’t tell you the reason for termination, they often will tell you that much.  Tone of voice matters, too.  Many people will simply repeat their statement over and over in a monotone voice when they are trying not to say something negative.  If they do talk and say positive things, pay attention to what is not said.  Also, remember that opinions are often biased.  If you do get the person talking, it is perfectly reasonable to take all opinions with a grain of salt.

Secret 5:  Verify Information You Already Have. Finally, former employers are more inclined to verify specific questions about information given by the applicant than to offer general answers or opinions.  Applicants are famous for quickly jotting down information like, “2008-2009 Acme Widget Company — Manager in charge of developing the black holes the roadrunner uses to escape.” Check the dates on the application against the dates the former employer provides.  Also, using the example above, confirm that the Black Hole Division exists, and that the applicant was responsible for creating new black hole technology.  If Acme tells you they weren’t producing black holes during the dates provided, it’s a red flag.

Make a hiring mistake and need help?  Call CEDR Solutions at 866 414 6056

We welcome your emailed questions, a call, or use  of the chat. Email us at info@cedrsolutions.com

Transitioning Employees Before During and After- Supplemental Video and Guidance

From CEDR’s Winter 2011 Profitable Dentist Article- See the article here

• Receive free lifetime employer training designed for you (arrives once per month by email)
• Ask our experts about any current employee issue
• Receive our video tutorial – the five things you must know when hiring or taking over a business with employees
• A Hiring Checklist which outlines your legal obligations
• Discounts on mandatory Federal and State Posters
• Details on programs that can make your transition hassle free

 

If you have questions please feel free to call at 866 414 6056  Ask for a transition expert. Or- Set an appointment on our calendar that works best for you and Self Schedule!

]]> http://www.cedrsolutions.com/newpractice/feed 1 http://www.cedrsolutions.com/newpractice?utm_source=rss&utm_medium=rss&utm_campaign=newpractice http://feedproxy.google.com/~r/CedrSolutions/~3/Lrsd-FV6if0/transitioning-employees http://www.cedrsolutions.com/transitioning-employees#comments Thu, 29 Sep 2011 16:51:38 +0000 Erin P http://www.cedrsolutions.com/?p=3894 In a recent on-line discussion with a group of dentists, I found myself embroiled in a heated debate.  The issue was what to do about the employees when you are in transition on a purchase of a dental practice.  Do you fire them all? Do you keep them?  Do you wait it out and make them prove their worth? What are your legal obligations?  Is it insane to think about letting what one dentist called “the lifeline to the patients” think anything other than that their job is secure?

Because we are a Human Resource organization for dentists, at CEDR, we see this issue come up all the time.  With dental practice clients in 48 states, we are regularly asked how to handle the transition of employees in the sale and transfer.   This is a time when your decisions will affect a lot of lives, and the more prepared you are about the choices you have and which options to avoid, the smoother your path will be through the often painful process of transition.

If you are the purchaser or new associate partner buying the practice, how much can you afford to upset the apple cart?  What about your soon to be employees? Will they support you or is there a problem brewing?  Taking a “let the chips fall where they may” approach is certainly an option, but at what cost?  One thing is for sure, whether we are talking about 2 or 50 employees, you must have a strategy.

I want to start this discussion with the basic but often forgotten premise that fear, intimidation, uncertainty, and insecurity are not the way to begin, maintain, or grow your relationship with any employee, at least not if what you ideally want from that person is loyalty, positivity, or commitment to your goals.   At a minimum, you need their honesty.   And the best way to get that is not through intimidation or being less than truthful with them, or yourself.  With this premise in mind, it is easy to see that if you take a passive approach with respect to managing the transition of employees through a wait and see attitude, that it may  exacerbate conflict in what is already a time of fear and insecurity for the employees. By the way, this is also the time to let new employees know that you will not be operating from a place of fear either. Threats,  outbursts, and dismissing new ideas and your requests will not end well for the perp. That leads to my first practice transition tip.

• Know What You Don’t Know and Get Help.   The most common mistake we see is from employers who refuse to accept the importance of getting reliable expert support on employment related issues.  You may be the most skilled dentist in the world, but unless you have spent as much time specializing in human resource law or management as you did to get those medical skills, you likely should NOT be trying to write your own handbook (this goes double for the dentist who is selling you his practice), or to evaluate the risks of being sued by an employee you would like to fire.  To be a bit blunt:  If you’ve been in practice for twenty plus years, things have changed.  If you’ve been in practice for two years, and you think things will be more casual and easy without a bunch of written rules, you are in for a rude awakening.

I’ll spare you the scary statistics about employment litigation and the exponential rise in audits of pay practices of small businesses in this article.  Let me just say that there are easy solutions to this problem.   The first is to put an employee handbook in place that is brand new, up to date, and fully customized for your state and your number of employees.  Do not attempt to do this on your own.  Of all things that you can put off until you learn what is going on, this is one that cannot wait.  This important document is your leadership platform and your most important protection.

• Promise Carefully.   Setting clear and honest expectations with employees will avoid disappointment and improve your credibility.   The day you purchase the practice is the first day of the rest of your relationship with the employees.   It is critical that you do a “reset” with the employees.  Reset their expectations.   Let them know there is a new sheriff in town, what you’re about, and what you value in a good team member.

Let the employees know what to expect in the first few months.   If you don’t know specifics yet, tell them you don’t know, and when you plan to know.   Before the deal is even done, we recommend you meet with each employee to discuss the transition.  Ask them what they do, if they are happy, and how they see the practice evolving.  Ask them what they want to contribute to your vision.  This is an opportunity to show you are a worthy leader, who is capable of compassion, and rewarding of those who commit to the success of the practice.

A good approach is:

I want to be very clear about my expectations for each employee, and will be evaluating each individual to see how they fit in with the vision for our practice. I want employees who are in support of the patients and my vision for our success.  But, it is not my intention to keep any employee in a position that neither of us wants them to be in.  So, I encourage you to talk to me, tell me your concerns, and to expect the same from me.

Don’t make any specific promises.  Never promise to keep any employee as a condition of the sale.  A common request or condition of a sale usually shows up late in the negotiations and it goes something like, “I need you to let Mary stay on at her current pay and benefits for at least two years.”   This is a bad idea that will cost you money that you would not otherwise be obligated to pay.   Great employees do not need your guarantee of future employment.

• Approach terminations objectively.    This issue was the center of my online debate.  The chatters varied in their approaches:   1) Do Nothing;   2) Fire Everyone and Start over;  3) Make everyone Re-apply;  4)  Do nothing, and then eventually do something only when you can no longer do nothing.  Frankly, none of these options are very appealing or effective.

Firing everyone is costly, risky, and could cost you a good portion of the patient base of your new practice.  Making everyone re-apply for their old positions, especially those who have been with the prior owner for many years, is a great way to establish mistrust, disloyalty, and insecurity.  And, while you may think it is a good idea to do nothing, or even to wait for six months before you “do” anything, rest assured that your responsibility and exposure to all of the risks of being an employer started the moment you took over.

Don’t wait until your new team finally becomes settled with the changes to make termination decisions.   Trust your gut and make the tough decisions as soon as you know which people are not a fit for your vision.   The more proactive you are, the less time the employee has to establish a claim against you, or worse yet, to create a toxic atmosphere with the rest of the employees.   But you do need to proceed carefully, knowing exactly what the risks are and whether your employee can come back and bite you and how.   It may take some good documentation, and some level of confrontation, but with the right techniques, and CEDR’s support, it can be done relatively painlessly.

While we agree with the consensus that keeping the existing team in-tact during a transition is the ideal solution, it is important to understand that you do not have to retain or keep anyone so long as you have the proper mechanisms in place.  This starts with an employee handbook and not just any old employee handbook.  It continues with support and guidance when difficult issues arise.

NEED HELP?  We’ve posted some very useful additional materials along with video guidance on this subject at http://www.cedrsolutions.com/newpractice


After you are done checking out the additional guidance, I’ve provided an easy way to ask me any questions you have regarding your current or upcoming transition and your employees.  This is something you can plan for, need to take care of, and CEDR can help.

]]> http://www.cedrsolutions.com/transitioning-employees/feed 1 http://www.cedrsolutions.com/transitioning-employees?utm_source=rss&utm_medium=rss&utm_campaign=transitioning-employees http://feedproxy.google.com/~r/CedrSolutions/~3/C3R2WsMoFm8/milking-the-clock http://www.cedrsolutions.com/milking-the-clock#comments Tue, 20 Sep 2011 22:20:40 +0000 Erin P http://www.cedrsolutions.com/?p=3862 Even inside my own HR company, I face the challenge of getting everyone to clock in and out properly.

What follows are a few notes on issues common to time clocks, paychecks, and working overtime, including:

• Charging penalties when employees clock in incorrectly
• Failing to pay employees on time because of their mistakes
• Using a biometric clock to prevent employees from clocking in early and clocking out late

Penalties. In most states, deducting pay from paychecks to penalize employees for registering their time improperly violates wage and hour rules. We are aware of a practice that penalized employees by making them pay out of pocket for time spent fixing an issue with their paycheck.

Hitting your employees in the pocket might seem like a smart and effective way to ensure they record their time accurately. But what if your attempt to teach them a lesson results in your being the one who is breaking a wage and hour law? And, what happens if your employees refuse to pay the penalty? Would you withhold their paycheck pending payment of the fine? Would you terminate? Withholding the check violates federal and state law, and termination exposes you to a lawsuit. Penalties of this nature aren’t such a smart idea, after all.

Withholding Pay. In most instances, it’s legal to adopt a policy informing employees that you may not revise or correct paycheck errors until the next pay period. However, employers must understand that it’s illegal to withhold or delay an entire paycheck as a punitive measure. Employers must also pay for hours worked based on your own state rules. Almost all states also set time periods in which employers must pay for hours worked and recorded.

Time Tracking Devices. Programmable time tracking devices that prevent employees from clocking in early or clocking out late are legal. If that is the case, why do employees still prevail on Department of Labor (DOL) complaints when a biometric time clock is in place that limits the hours that will be recorded? According to the DOL, if an employee claims she/he worked hours you did not pay them for, you’re on the hook, regardless of your time tracking method. Additional problems arise where an employee works extra hours the employer is not aware of because they fall outside of the clock’s pre-set parameters. Although helpful, biometric clocks are not reliable. It’s better to address unauthorized hours proactively, using the following approach:

1) Adopt a properly written policy about unauthorized time worked. See the end of this post for an example.

2) When an employee works unauthorized hours, address it in writing. In some states, such as California, write-ups with employee acknowledments are very important because of the daily overtime rule. Documenting offenses reacquaints your employees with the policy and ensures you have critical documentation in case problems arise.


Practical Solutions.

 

Milking the clock. After a second offense, issue a termination warning.

Failing to Clock In. Although you can’t penalize employees with fines, there are ways to hit them in the pocket. You can adopt a bonus policy that makes employees ineligible for bonuses if they do not comply with your other policies. Note that such a policy does not revoke or withhold a bonus already earned. Also, note that this is a policy of general application, and everyone is subject to its terms. When you draft a written warning for recording violations, inform the employee he or she is at risk of being excluded from the bonus for that week.

CEDR offers a resource called The Employer’s Toolkit at our website. In it, you will find a bonus policy with clearly defined eligibility requirements. Access the Toolkit via our website, www.cedrsolutions.com.

Sample Overtime Policy

At times, you may be requested to work overtime in order to meet the needs of the Practice.  However, working overtime is generally discouraged.  Exempt employees are not eligible for overtime pay.  Non-Exempt employees must have all overtime approved in advance and reported on the time sheet for that pay period.  Non-exempt employees will be paid at their regular rate, plus one-half for hours actually worked in excess of 40 hours in a work week, or as otherwise prescribed by state law.  Paid time off, such as vacation, personal days and holidays are not counted for overtime.

If you answer YES to any of the following questions, please give us a call.

• Want the kind of knowledge and support contained here at your fingertips?
• What are your state rules?
• What if they change?
• What if you’ve tried some of the methods that aren’t legal? Can you get back on track?
• Would you like to take care of this and other issues, but you don’t have time?

Because employee handbooks do not update themselves, and employee problems are often risky and seldom easy, we give our members affordable and easy access to the CEDR Solution Center.  Learn more here.

Want to discuss an issue or learn how to become a member?

Contact us three  ways:

Call 866 414 6056

Please give us a call at 866 414 6056. Or, you can schedule a convenient time for us to call you using CEDR’s convenient, interactive calendar. Click the ‘Tungle.me’ button below.






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