July 2012 Compliance and Culture Newsletter

“It is the duty of the executive to remove ruthlessly anyone — and especially any manager who consistently fails to perform with high distinction. To let such a man stay on is to disrupt the others. It is grossly unfair to the whole organization” —Peter Drucker

This issue discusses:

• Editor’s Column: Three Major Gaps
• Keeping Cool in the Summer Heat
• What’s Important to HR Pros
• The NLRB: A Political Football
• Challenges with Intermittent FMLA Leave
• It Pays to Provide Healthy Snacks
• HR: You Versus the Competition
• Using Outsourced Workers
• HR and Risk Management
• Oh No! Where Did Our Information Go?

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Three Major Gaps

In a recent Webinar, I reviewed 15 forms and tools on HR That Works that can have a direct impact on a company’s bottom line. If you haven’t yet watched this Webinar, I encourage you to do so by clicking on this link.

During the Webinar, I asked three polling questions. How would you respond to each one of these?

1. Do you have a social media policy?
   Amazingly, less than half of respondents have such a policy — they’re sticking their heads in the sand. Don’t ignore this significant risk exposure. The best way to create a policy is by coordinating with your HR, marketing, and IT departments, as well as a representative team of employees. This can’t be a top-down document — it just won’t work. You need to create your policy by consensus so that everyone at the company will buy into it. A good way to start is by taking advantage of the Social Media Training Module and Sample Policy on HR That Works.
2. Do you have a written hiring process?
   Once again, less than half of respondents do. This is amazing when you consider that the single most important thing you can do for your company is hire the right people. Don’t take my word for it; rely on the research of best-selling author Jim Collins (Built to Last, Good to Great, etc.) who argues that the main factor in creating great companies is hiring great people. How can you possibly do this on a consistent basis without an effective hiring process? Answer: You can’t!
3. Does your employee handbook tell employees how to be a good employee?
   Believe it or not, two-thirds of respondents said that their handbook doesn’t.The reason: Lawyers, who have taken over writing employee handbooks, focus on protecting your business, rather than helping you to grow it.Remember, as Norman Vincent Peale preached, you get what you focus on. Your handbook should definitely include the How to Be an Excellent Employee and sample Team Rules provision from HR That Works.

Keeping Cool in the Summer Heat

When it comes to outdoor workers, “water, rest and shade” can literally make the difference between life and death. Every year, thousands of workers nationwide suffer from serious heat-related illnesses. If not addressed quickly, heat exhaustion can become heat stroke, which has killed — on average — more than 30 workers annually since 2003. Labor-intensive activities in hot weather can raise body temperatures beyond the level that normally can be cooled by sweating. Heat illness might first manifest itself as heat rash or heat cramps, but can quickly turn into heat exhaustion, and then heat stroke, unless workers follow basic preventive measures.

“It’s essential for workers and employers to take proactive steps to stay safe in extreme heat, and become aware of symptoms of heat exhaustion before they get worse,” says Dr. David Michaels, Assistant Secretary of Labor for Occupational Safety and Health. “Agriculture workers; building, road and other construction workers; utility workers; baggage handlers; roofers; landscapers; and others who work outside are all at risk. Drinking plenty of water and taking frequent breaks in cool, shaded areas are incredibly important in the hot summer months.”

In preparation for summer, OSHA has developed heat illness educational materials in English and Spanish, as well as a curriculum for workplace training. Additionally, a Web page provides information and resources on heat illness — including how to prevent it and what to do in case of an emergency — for workers and employers. The page is available here.

OSHA also has released a free application for mobile devices (both Android-based platforms and the iPhone) in English and Spanish that workers and supervisors can use to monitor the “heat index” at their work sites. This app displays a risk level for workers based on the index, as well as reminders about protective measures to take at that risk level. You can download the app here.

NOAA also includes pertinent worker safety information on its heat watch Web page.

What’s Important to HR Pros

SHRM surveyed 504 HR professionals on their degree of satisfaction with 26 different job attributes. The respondents’ top five concerns, in order, were:

1. Opportunities to use skills and abilities — Exactly what skills and attributes are you interested in using? Does management even know that you have this ability or desire or are you keeping it to yourself? For example, if you’ve recently completed a course of self-study, does management know this?
2. Relationship with immediate supervisor — This holds true for all employees, not just HR executives. What, if anything, feels “unfair” about this relationship? Have you been given time to discuss your agenda for the company and your career? Has your boss pooh-poohed some of your ideas? Does your immediate supervisor even know what’s most important to you in the relationship or are you hoping that he or she can guess at it?
3. Communication between employees and senior management — It’s highly frustrating to be stuck in the middle when there’s a poor relationship between manager and employees. (Guess what? It’s your job to help improve this communication!)
4. The work itself — If you find yourself doing under-valued work, whose fault is this? Have you made the case for ditching your $10-$20 per hour work so you can focus on higher value work? Can you show management the ROI on your moving up the ladder?
5. Autonomy and independence — You want to do your own thing like everybody else. Have you earned the trust necessary to have this independence? What level of authority do you have?

Interestingly, compensation and pay came in at seventeenth place! As I kid in my workshops with HR executives, “They know this about you.” In my survey of HR executives, most of them tell me that what they want more than anything else is to make a difference — which is great. Just don’t underestimate the importance of getting paid well to do it!

The NLRB: A Political Football

Many employers have expressed their frustration about the National Labor Relations Board’s agenda. Are they really surprised or just annoyed? The NRLB, like OSHA, the EEOC, DOL, etc. are administrative branches under the control of the President, who is currently backed by unions. As you can see from the graph, the figures in yellow show how NLRB enforcement declined once the Bush administration came into office, and has been back on the rise since the Obama administration came in (in pink). No surprise here. Unfortunately for the NLRB, state legislatures and courts have begun to rein in the NLRB agenda, which arguably goes beyond any authority found under the Act. Take, for example, the demise of the Employee Free Choice Act, problems with the NLRB Poster, and most recently the new election regulations.

My advice: Make sure that someone at your company stays on top of the NLRB agenda. Check out the HR That Works Blog posts, as well as the www.nlrb.gov website and our recent Webinar on managing recent NLRB requirements.

Challenges with Intermittent FMLA Leave

Few things drive HR executives nuts more than dealing with intermittent FMLA leave. When faced with this situation, bear these facts in mind:

1. Employees must comply with reasonable call-in procedures and no-call/no-show policies affected by intermittent leave.
2. Employers are allowed to get recertification under appropriate circumstances. They can also put employees in an accommodated position that might reduce the need for the intermittent leave.

HR That Works has an excellent series of podcasts produced by the Franczek firm discussing FMLA leave.

It Pays to Provide Healthy Snacks

Smart employers realize that they should make healthy energetic foods available to their employees. After all, what’s the cost of a few healthy snacks when you’re paying a worker $50,000 a year to produce? I encourage all employers to provide rice cakes, fresh apples, lemons, fresh water, sparkling water, oranges, carrot sticks, almonds, broccoli, etc. You can often go to the local supermarket and buy a tray which already has many of these fruits and vegetables. The point: Make it easy for your people to eat healthy food — and they’ll become far more alert and productive. Even better, work with a local farmer or health food store to set up a regular delivery schedule.

HR: You Versus the Competition

HR operates in a highly competitive landscape. For example, your ability to attract and retain employees more effectively than your competitors will benefit your bottom line. HR can play a key role in this process. How would your company compare to the competition in these elements of employee compensation?

• Salaries and wages
• Benefits and other rewards
• Training
• Career growth opportunities
• Flexible work arrangements
• Retirement benefits

If you’re not clear about how you stack up, you have some serious homework to do. Many industry groups or local employer groups can help you obtain data related to your industry. Contacting a recruiter in your field can also help supply you with this information. Remember that these factors can have a significant effect on your ability to attract employees, get them engaged, retain them, avoid unionization efforts, and improve your brand and customer relations.

Using Outsourced Workers

HR That Works has an extensive report and checklist about what’s known as the “contingent workforce.” This includes temporary employees, leased employees, and more. Here are some questions to consider in these relationships:

• Who is responsible for what? — As with any arrangement, it’s important to study the contract. For example, if an employee isn’t working out, who should be responsible for firing them? Consider every aspect of managing personnel from hiring through performance management and retention to termination.
• How much are you paying to outsource various HR functions? — Whether you’re outsourcing because you don’t have the time, expertise, or desire to do the job in house, you’ll have to pay for someone else to do it for you. What’s the competitive rate? What about the provider’s experience and results? Do your homework and interview at least a couple of providers and their clients before you choose one.
• What is the provider’s hiring process? — They should be able to show it to you in writing. If they can’t, pick someone else. Make sure that the provider does proper skill testing, character assessments, background checks, extensive interviews, immigration checks, and pre-hire physicals.
• What references can the provider offer? — Don’t just ask for references, get the names of companies who have used the vendor during the past year. See if the vendor is willing to share this information and allow you to interview those companies. Ask “What will these companies tell us?” Then do Google research to see what comments you can find online.
• What’s the knowledge on board at the vendor? — How long has the person who does the hiring and staffing been doing their job? What are their credentials? Is there expertise on board to help you with any compliance concerns?
• Does the agent carry the right insurance? — Depending on whose payroll is involved, the law requires employers to provide Workers Compensation benefits, as well as withholding unemployment and Social Security taxes, and more. If the temp or leasing agency treats their workers as independent contractors you could end up being in a heap of trouble.
• Does the agency provide employees benefits? — Remember, if a worker walks and talks like your employee, they’re probably going to be considered your employee, whether they’re a sole employee or in a joint employer relationship. If an employee receives no benefits from the provider, you can easily face a hefty benefits claim down the road.
• What about union activities? – To what extent has the agency been faced with unionization efforts? Your temporary workforce might be considered part of an existing bargaining unit and thus covered by your union contract.

HR That Works members should view the extensive Contingent Worker Report and Checklist.

HR and Risk Management

We usually think of HR helping to avoid employment practice risks. We want to make sure not to be trapped in wage and hour claims, discrimination and harassment litigation, and wrongful termination lawsuits. Then there’s leave management, including ADA and FMLA. Although these are the major issues in HR risk management, HR is also instrumental in helping with other aspects of managing risk, such as:

• Workers Compensation — Insurance companies don’t pay claims, they finance them. When you suffer a Comp claim, your experience modifier (“MOD”) increases to repay the claim during a three-year period at a high interest rate. This can be the most expensive money that your company borrows. That’s one reason we recommend that employers do everything possible to get employees returned to work. Has your HR person helped develop a comprehensive return-to-work program?
• Cyber Liability — To what extent are poor employee practices leaving your information systems vulnerable? To what degree is HR working with IT and security to make sure that new employees receive proper orientation and terminated employees are managed effectively from a security standpoint? For example, what precautions have you taken to have mobile devices returned, passwords retrieved, trade secrets protected, etc.? To what degree does HR make sure that telecommuting employees don’t expose the company to cyber risks?
• Social media — One element of cyber liability, risk from social media, is expanding every day. Has HR made it clear who owns the company Twitter account? Have they set social media guidelines? Do they know how to respond to any perceived risks, such as negative employee postings?
• Privacy exposures — Whether it’s medical records (HIPAA), Social Security information, financial information, etc., employees can both generate exposures and be subject to them.
• Disaster planning — One disaster can wipe out your company overnight. Whether it’s a tornado, hurricane, earthquake, flood, or a brutal snowstorm, the news is replete with the devastating impact of such events. To what degree has HR helped generate a plan to protect the company in the aftermath of a disaster?
• Employee Benefits — With a growing number of ERISA claims and a rapidly changing benefits landscape, HR is thick in the mix. Who is responsible for staying on top of the emerging benefit trends?

Perhaps the greatest risk that HR can help with is growing the business: Providing strategic advice about what your company needs for growth and how to move in this direction. At smaller companies, it’s difficult for the HR executive to wear all these hats. In this situation, many businesses have partnered with their insurance agency or other professional providers of risk management services.

Oh No! Where Did Our Information Go?

During recent months I’ve been reading a large number of lawsuits related to industrial espionage, sabotage, misappropriation, and theft. Most of these cases involve a current or former employee or some third party stealing valuable financial or other information. In several recent decisions, courts have ruled that they lack criminal jurisdiction over theft of information by an employee who had access to a company’s database. The courts essentially held that the misappropriation in question did not violate the National Stolen Property Act, the Economic Espionage Act, or the Computer Fraud and Abuse Act (CFAA). In the case of US v. Nosal, Judge Kozinski, known for his left-of-center opinions, engaged in a display of semantic gymnastics to rule that the Computer Fraud and Abuse Act was nothing more than an anti-hacking statute and doesn’t apply to misappropriation. Essentially, he argued that employees who wasted time on Farmville, Facebook, New York Times, daily Sudoku, etc. would be in violation of the Act, which is too broad for the government to enforce. If you want to see some feathers fly in a scorching dissent, read the case.

Bottom line: Make sure to buy Cyber Liability insurance; it looks like you’re going to have a hard time getting protection from the courts, especially if you happen to be in the Ninth Circuit.

Form of the Month

Factors Affecting HR (PDF) – Check out this comprehensive list of the internal and external factors that have a significant impact on your HR activities.

Podcast

Click here to to listen to this month’s newsletter podcast.

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©2012 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.

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