In 2014, New Hampshire passed SB 207, the Paycheck Fairness Act, that prohibits conditioning employment on a promise to refrain from disclosing wages or to waive the right to disclose wages, salary, or paid benefits, and prohibits retaliation for disclosure. In fact, even if you have employees sign a nondisclosure agreement, they still have the right to discuss pay.

Companies covered by the National Labor Relations Board have always had to allow employees the right to discuss salaries. An executive order by President Obama in 2014 extended that ruling to all federal contractors: “The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant.” Discussion of wages can be in person or online; the rules are the same.

One of the motivations for these laws and the executive order is to enable women and minorities to find out if their salaries for equal work are lower than those of men or non-minorities. As part of the same effort, a recent Massachusetts law prohibits employers from asking employees about their salary history until after a job offer that includes compensation. The intent of the law is to prevent companies from extending an artificially lower salary to groups, such as women, who traditionally are paid less, by basing the salary offer on an artificially lower previous salary.

In general, society is moving toward greater transparency in salaries and more protection for employees. Even if your company does not have any federal contracts, is not covered by the NLRB, and does not operate in Massachusetts or New Hampshire, you should be aware of the trend and you should keep ahead of it in your policies. You have little to gain and potentially a lot to lose by insisting on pay secrecy.

For help in framing your policies about pay, please contact HR Compliance 101 today.

As the US becomes more diverse and as even small companies reach out globally to employees and customers, cross-cultural understanding becomes ever more important. Most authorities recommend starting with similarities to build understanding at work, including the universal need for respect, communication, and encouragement. All employees need information about the company’s business plan, a chance to hone their skills on the job, appropriate rewards for work, and access to training and resources.

Differences between cultures may appear in unexpected places. For example, different cultures have different views of time, teamwork (cooperation versus independent action), communication styles (particularly in relating bad news), and attitudes toward status. These differences may result in a team member who is more or less assertive, more or less likely to take credit for results, or more or less flexible in respecting deadlines simply for cultural reasons. Managers and coworkers have to be willing to look beyond obvious, familiar patterns of behavior to see which employees are truly valuable additions to the company.

Because employment laws and attitudes vary greatly from state to state, let alone from country to country, a company may find itself treating different cultures differently simply because employee expectations are different. If offshore employees have a different expectation about advancement (seniority is the only criteria) than onshore employees (advancement is a reward for exceptional work), then a perception may arise that offshore employees are not ready for advancement or that onshore employees are too demanding—when neither perception is correct.

A workplace that emphasizes respect, tolerance, and a willingness to learn is way ahead when it comes to cross-cultural understanding. Transparency is another factor. John Mackey, co-founder and CEO at Whole Foods, has said that with transparency, “any kind of favoritism or nepotism is seen.” The same goes for any type of discrimination. If your workplace does not currently reflect the values of respect, tolerance, and transparency, please contact HR Compliance 101.

In a recent HR Compliance 101 newsletter, I explained the alternatives for employers who are concerned about the effect of personal cell phone access on employee productivity. There are steps employers can take short of an outright ban of cell phones to make sure that employees are giving their full attention to the job, not to text messaging their friends and family. But cell phone use raises other problems that the employer may not recognize: disintegration of an employee’s life/work balance, the need for changes in communication, and threats to company security.

Employers who fail to recognize that employees need downtime away from the job may send emails, text messages, and phone calls at every hour of the day and night—and expect an immediate answer. That attitude increases stress on the employee, may violate wage and hour regulations, especially for hourly employees who must be paid for overtime, and forces employees into decision making at all hours, when they may not be at their best. Further, employees may be driven to answer while driving, a dangerous situation for anyone on the road. Employers have a responsibility to recognize the boundary between work hours and downtime if they want productive employees.

A change in communication style is another problem that employers may fail to recognize. The phone is no longer used for phone calls. Respondents to a recent IDC survey of 7,400 Smart phone owners found that these owners spent an average of 132 minutes a day on their phones, but only 16 percent of that time was spent on phone calls. Therefore, managers must be ready to engage with employees (and customers) through texting or emails rather than face-to-face or voice-to-voice.

Many companies are providing technology such as smart phones for their employees. This approach has the advantage of giving the company’s IT department some control over security. The ease of modifying smart phones with apps and accessing unapproved sites means that security will always be an issue, regardless of who owns the technology or what rules are set in place; but some control is better than none. The Employee Handbook should outline the rules regarding security and use of company-owned cell phones on and off the job.

In all of the arguments for and against connectivity, one message is clear: your employees are acting in exactly the same way as your customers. If you find cell phone usage frustrating with employees, you may be missing opportunities to reach your customers—because they are the same people, with the same desire to stay connected through their devices.

HR Compliance 101 is experienced in developing company policies for personal and company-owned cell phones. Please contact us.

Much has been written recently about multi-generational workplaces. In the past, a manager was seldom younger than the people he or she managed; now that situation is commonplace. In the past, few companies rehired a retired employee as a contract or contingent worker or held on to that employee by offering flexible hours or telecommuting; now that situation is commonplace. In the past, older employees had the best grasp of technology related to the job; now younger employees are taking the lead.

However, many myths have also grown up about the generational gap. For example, baby boomers are not that far behind millennials in embracing new technologies. They are just as wedded to their Smart phones and just as likely to be on social media (according to one survey of 1000 baby boomers, 91% use social media). They may favor different social media sites or shake their heads over the refusal of millennials to actually talk on a phone, but they use and understand the latest technology.

Flexible working hours are important to both groups, baby boomers and millennials. In a recent report, lack of flexibility was among the top reasons that millennials quit their jobs and a major factor in older employees staying on the job.

According to a 2014 Wall Street Journal article, “Today, more than one in three US workers are freelancers—a figure expected to grow to 40 percent by 2020.” In 1995, the Monthly Labor Review stated that contingent workers (freelancers and part-time workers) were more likely to be African-American, female, and enrolled in school. Now, according to a 2016 Huffington Post article, contingent workers are “providing your company with specialized workers who meet very specific needs in a way that drives bottom line growth”—and they come from every age, socio-economic, gender, and racial group.

What does all this mean for employers? First, employers should realize that a workforce of all boomers or all millennials will not give them some magical guarantee of either loyalty or technology know-how. All ages are liable to change jobs if they object to the work/life balance and all ages are technologically astute. Second, employers should never consider an employee to be permanently gone from the workforce. Just as employees are told not to burn bridges when they leave a company, now employers must be careful not to alienate employees who are leaving. Today’s full-time worker might be tomorrow’s consultant.

If you find yourself unable to bridge the generational gap, real or imagined, please contact HR Compliance 101. We can help.

The workplace is changing more rapidly than ever and so are the regulations affecting it. Here are some recent changes in healthcare, technology, benefits and employee relations.

Healthcare

As the IRS explains, “The Affordable Care Act added section 6056 to the Internal Revenue Code, which requires applicable large employers to file information returns with the IRS and provide statements to their full-time employees about the health insurance coverage the employer offered.” The new requirements first became effective in 2016 and cover any employer with more than 50 employees. The new requirements simplify reporting by combining forms and decreasing the amount of information that needs to be submitted about health insurance coverage.

Technology

Technology changes are affecting the way that employers and employees approach health care. For example, money can be saved through virtual visits to doctors or specialists or by monitoring blood pressure over 24 hours at home.

In a further development on the technology front, in December of 2015, the National Labor Relations Board determined that employers cannot forbid employees from “recording conversations or taking photographs at work.” They cannot direct employees to first get permission from a supervisor before taking photos or recording conversations. The NLRB claimed that those prohibitions would prevent employees from documenting unsafe working conditions or employer harassment, for example.

Benefits

Another trend for 2016 is the widening scope of voluntary benefits being offered to potential employees. More and more, benefits are being tailored to individual employees, including help with everything from student loans to retirement planning.

Employee Relations

As the workforce changes—becoming more global, diverse and more demanding of interesting work—more employees are seeking opportunities to learn. A workplace that provides those opportunities will attract highly motivated employees. Those opportunities range from “people analytics” (such as StrengthsFinder™) to courses on how to handle specific tasks and equipment at work.

Another workforce change is the increase in contingent workers. According to a recent survey on “Global Human Capital Trends, 2016” by Deloitte University Press, “Only 19 percent of executives surveyed believe their companies fully understand the labor laws that govern contingent workers.” As explained in an earlier HR Compliance 101 blog, contingent workers are part-time, freelance and consulting employees as opposed to full-time employees.

HR Compliance 101 keeps up with the latest regulatory and workplace trends and laws so that our clients are able to adapt quickly and avoid lawsuits and fines. Please let us know how we can help you.

Some great folks at the New England Graduate Accounting Studies Conference (NEGASC) last week challenged me about the concept of “comp time.”  I stated that “comp time” is not a legal term in the private sector, only in the public sector. Private sector means all of us who don’t work directly for the government.

“Comp time” (compensatory time) is only permissible if the employee works for an entity defined as a public agency by the Fair Labor Standards Act (FLSA), and that basically means anyone who works for the state or federal government, such as town officials, other elected officials, firefighters, and law enforcement personnel. The definition of public agency does not cover any private companies who do the same type of work as public companies.  For example, employees who work for the Town of Pleasantville Ambulance Service work in the public sector and are entitled to “comp time.”  Employees who work for Ivan’s Ambulance Company, which is privately owned and operated, are working in the private sector and are not entitled to “comp time”.

The FLSA states that an employer who requires or permits an employee to work overtime is generally required to pay the employee at a rate of not less than time and one-half their regular rates of pay for hours worked in excess of 40 hours in a workweek.   Unless the employee is specifically exempted (normally known as exempt-salaried employees who meet both the duties test and the new salary minimum), all hourly or non-exempt employees who work in the private sector get overtime pay.  (If your company’s current policy is to pay overtime after 8 hours worked in any given workday, I would strongly encourage you to change your practice to hours worked in excess of 40 in a workweek.)

It is illegal to give employees time off instead of paying them or to pay them straight time when they have worked overtime.  What employers may do is to give their employees flexibility within a given work week so that their total hours don’t exceed 40.  A good example is when Gertrude has a doctor’s appointment on Tuesday at 3:00 p.m. She needs to leave at 2:30 and her normal workday ends at 5:00.  Instead of taking her normal, one-hour lunch break, Gertrude only takes 30 minutes for lunch each day during that week, working the other 30 minutes which makes up the 2.5 hours she needs for Tuesday’s appointment.  However, Gertrude can’t earn those extra hours the week before and “float” them into her time off the following week. That’s not allowed in the private sector. The flexibility of the work schedule is only allowed during the current scheduled work week.

If “comp time” is a common term in your private-sector world, I would encourage you to eliminate the practice.  If you let your employees “use up” their “comp time” as quickly as is feasible for your organization, and not let them accrue any more, then you will be in compliance with that portion of the FLSA.  Reach out to me at paula@hrcompliance101.com if you need help with this process.

One of the trends that has recently appeared on the Human Resources horizon is the evaluation and nurturing of emotional intelligence. Among other qualities, emotional intelligence includes passion for one’s work, the ability to interact well with others (including listening skills), the ability to stay in control under stress, and a commitment to a positive company culture.

Emotional intelligence (EQ) is often part of “soft skills,” such as the ability to work in a team, lead people, motivate people, and find solutions to problems.

As a business owner, you should have an interest in emotional intelligence because it makes your own job easier. People cooperate, information is shared, finger pointing diminishes, employees turn from “yes men” into independent thinkers and problems are solved before they reach crisis proportions. If your own emotional intelligence is high, you are better able to recognize stressful situations and respond to them in a way that reduces rather than aggravating the stress for yourself and others.

Basically, emotional intelligence is all about the relationships between people and their effect on performance and health. The smoother those relationships go, the more efficient and productive the workplace and the less stressful.

When you are interviewing candidates and trying to determine their EQ, you might consider whether:

1. The interviewee shows interest in the company and asks appropriate questions. Someone who is totally focused on themselves and their own successes probably has a lower EQ.
2. When asked, the interviewee describes an acceptable way for handling workplace conflicts or stress. There are a variety of acceptable responses but shouting or physical violence definitely indicates a low EQ. You also want to be careful of anyone who claims they never experience conflicts or stress.

As an interviewer, however, you have to be careful that your EQ questions are not hostile (“when did you last annoy a co-worker?”) or intrusive (“how do you get along with your spouse?”).  Questions should never be designed to test an interviewee’s patience and willingness to be bullied.

If you find that your workplace as a whole suffers from low EQ—it is more stressful, less productive and less efficient than you would like—please contact HR Compliance 101. Let’s talk about possible solutions.

Once all the documentation and paperwork is out of the way for hiring your first employee (as related in Part I), you may face some unexpected challenges.

The first is your own attitude toward supervision and sharing space. We all want to consider ourselves great bosses, but clearly we all have bad days. We all want to consider ourselves generous, but clearly we all also need some privacy and me time. Consider what you want from the new culture you are developing. Will you have the patience to train a complete novice or do you want someone who will jump in right away or will you be exasperated by having to undo habits learned elsewhere? Are you happiest surrounded by extroverts or introverts? Some questions you can only rely on yourself to answer; others have already been answered in the wealth of books and online articles available on managing people and evaluating your management style. Take advantage of the knowledge of people who have taken this first step before you.

The second unexpected challenge is the process of interviewing. I recommend a telephone interview before you take time for a personal interview. Over the phone you can find out if the candidate’s experience, workplace preferences and salary requirements match the job you’re offering. If you have never interviewed anyone before, you would be wise to have a script (HR Compliance 101 will help you develop one) so that you are always comparing answers to equivalent questions. Don’t dominate the interview. Allow your interviewee plenty of time to speak; that’s the only way you’ll know if a candidate matches what you are looking for. Also remember that the purpose of the interview is to find a great fit for your company—not to eliminate people with trick questions.

The third unexpected challenge may be closing the deal. I strongly recommend that every first hire be contingent on a 1 month trial. In the course of that month you will find out if you are compatible with your new hire. You will also discover if the new hire exaggerated qualifications or has habits that would have been deal breakers in the interview, if you knew about them. Finally, the new hire will be able to walk away without prejudice if the job is simply a bad fit.

Until you have actually hired and kept your first employee, you are a novice in a situation that is far more complicated—legally, emotionally and procedurally—than you may have realized. HR Compliance 101 has shepherded many a business owner through the process of hiring a first employee. Please give us a call.

Moving from a sole-proprietorship to a company with one employee is a bigger step than many people realize. In this blog, I will discuss some of the legal ramifications. In the next blog, I’ll discuss hiring and management tactics that apply to first hires.

Legally, a company hiring its first employee needs to prepare by obtaining an employer identification number from the US Internal Revenue Service. You must set up systems for keeping records of federal and state taxes (which should be kept for 4 years), including form W-4 (withholding exemption certificate) and form W-2 (wage and tax statement). Among other requirements, a copy of the W-2 form will have to be sent to the Social Security Administration by the last day of February for the prior calendar year.

However, before you start collecting W-4 and W-2 forms, you have to make sure your potential employee is eligible to work in the US. Form 1-9 lists the specific documents you can ask for to confirm an employee’s eligibility; for example, a passport or alien registration receipt card or permanent resident card (often called a “green card”) with signature. Although the current I-9 form has an expiration date of 3/31/16,. it is still valid until the government issues a revised version. Employers now have the option of e-verifying through a specific government website.  Since 1996, you must also report a new hire to your state’s directory within 20 days of the hire.

Even with just one employee, you’ll need workers’ compensation insurance; required federal and state posters; and policies covering sick leave, vacation, paid holidays, and unpaid leave. As a best practice,  you should have written job descriptions and an employee handbook or guide, so that there is no confusion over policies.

Hiring a first employee is a bigger move than many sole-proprietors realize. HR Compliance 101 can help set up and navigate the systems, forms, and information you need to make the process go smoothly—and legally. We welcome your questions before that first hire comes through your door.