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Privacy Concerns and Your Nonprofit?

By now, everyone is aware that healthcare organizations operate under HIPAA rules that govern the privacy of patients. Similar government regulations and rules are in effect for financial, human services, and educational institutions to guard the privacy of their clients, employees, and students.

Nonprofits also have an obligation to extend privacy to their members, donors, clients, and volunteers.

A privacy policy is essential to make sure that all staff members are on the same page. The privacy policy should be available to donors, members and clients, as well as staff. If your nonprofit collects information about children, has international members, asks health-related questions or asks for financial information, you may trigger federal or state laws that govern how or even whether the information can be asked, stored and used.

The first rule is to err on the side of preserving privacy. You should get permission from every individual whose name appears in your printed or online materials, including your newsletter, press releases or website. For example, a signed thank you note from a beneficiary of the nonprofit is not permission to use the thank you online with the person’s full name and contact information. Participation by a volunteer in an event is not permission to include that volunteer’s name in a photo of the event. Finally, if someone contacts your organization for help through your website, that is not permission to use their name as an example of the type of help you provide.  You must ask.

Anyone who connects with your nonprofit through your Facebook page should be aware that their information will be available for other people to see—that’s the nature of social media—but that doesn’t authorize you to use their name and information in other contexts.

You may be storing private information electronically and/or in paper files. File cabinets should be secured. There should be limits on the individuals who can access personal information, such as donor contact information and the amount donated. When changeovers occur in staff, passwords should also be changed.

If you lack a privacy policy or haven’t reviewed your policy recently, HR Compliance 101 can help you and recommend appropriate resources to ensure that your nonprofit meets its state, federal and moral obligations.

Turning around an Organizational Culture: 3 Practical Steps

Most employees have no trouble recognizing a company with a poor culture: high turnover, low morale, low productivity and lack of teamwork. But business owners are sometimes too overwhelmed to recognize the same signs; and when they do recognize the signs, they feel powerless to turn the situation around.

In over a decade of work as an HR consultant with companies throughout New England and Florida, I have found that turning around an organizational culture begins with three practical steps that are both vital to a healthy culture and easy for a business owner to implement:

Step 1. Update your employee handbook—and if you don’t have one, start one. Mark sure every employee has a copy of the handbook. In the handbook, you lay out the benefits each employee is entitled to (vacation time, for example), rules that every employee must follow and the consequences for not following the rules. It is your first resource when employees complain about or try to wheedle preferential treatment. The handbook frees business owners and managers from feeling like the “bad guy,” and that alone is bound to improve the organizational culture. Does an employee have a problem with a decision? Refer to the handbook.

Step 2. Create job descriptions for every employee and make sure that each employee reads and signs his or her job description. The job description should review the soft skills (professional behavior, team work) that are essential for a positive organizational culture, as well as specific duties. The job description creates a solid foundation for annual reviews and provides the backup you need to deal with someone who is not measuring up in either soft or hard skills.

Step 3. Create processes. Your employees will be more productive if they know the work flow and if they are not constantly fighting an unrealistic schedule or chaotic organization. Your own desk may be messy, but your business processes have to be logical if other people are going to follow them successfully. Removing the frustration of disorganization is an important step in turning around an organizational culture.

Once you have those three practical steps in place, you can begin to visualize the organizational culture you would like to have and to bring your supervisors and managers on board with your vision. If you need help at any stage of the process, please contact HR Compliance 101.

What’s New in Human Resources in 2016?

Although presidential election years always seem to generate different dynamics for businesses, here are some issues that businesses need to pay attention to in 2016:

1. Labor shortage. I have predicted for several years that businesses will have a much harder time finding and hiring qualified applicants. By definition, a 4.5% unemployment rate represents full employment. Full employment means that everyone who wants a job is working; the remaining 4.5% either can’t work or aren’t actively looking for work. Although these statistics aren’t completely accurate, the same measurements have been used for decades. As of November 2015, New Hampshire’s unemployment rate was 3.2%. I predict a lower rate, as low as 2% (equaling New Hampshire’s rate from 1983 to 1989). Businesses can counteract this shortage in a variety of ways:

a. Most of us baby boomers don’t look at retirement as our parents did; we would prefer to slide into semi-retirement and work part-time. Allowing your senior employees to move to a part-time status if they choose will give your business time for succession planning. Post that employee’s job for internal candidates. Create training systems that give senior employees avenues to pass along their knowledge and expertise to those coming behind them.

b. Posting internal jobs creates ladders for your employees to climb; companies typically keep employees longer and reduce their turnover if they offer internal training and tuition reimbursement, allowing employees to move up from within and obtain professional certifications.

c. Make sure your on-boarding activities are designed to make your new employees feel part of your team quickly. You want your new hire to acclimate to the job and your culture in the shortest time possible.

d. Before adding an applicant to your payroll, you must check them out thoroughly to make sure they will be a good fit with your other employees. Every time you hire someone you don’t know personally or without checking and verifying references, you put your company at risk.

2. Hands-free driving. Use of cell phones while driving was regulated by law in 2015 and hopefully hands-free driving will become the norm in 2016. To protect their employees, their business and the public, business owners should make sure that their policies emphasize hands-free driving protocol. Many of my clients have incorporated hands-free language in their job descriptions and made Bluetooth devices available.

3. Social Media. This remains an issue for employers. Laws in New Hampshire make it unlawful for employees or applicants to disclose their login information or lower their privacy settings so you can see their information. However, when an applicant hands you a resume that is significantly different from the one that she posted on LinkedIn, it is worth having a discussion with her.

4. Workplace Violence. Ever since 9/11, workplace violence has been a bigger concern for employers. All retail employers must implement policies and procedures for their employees to follow in the event of a holdup or an episode of violence in their workplace.

In 2016, finding and retaining strong employees, ensuring employee safety and adapting to new technologies will create challenges for business owners. But taking the proper steps will promote not only the best interests of employees but the best interests of the business.

Part II, Arbitration

Nine Scary Words: “…may elect to resolve any claim by individual arbitration.”
These words have been showing up more and more on consumer contracts. Their intent and effect is to prevent customers from filing class action suits.  This is an issue that was brought to my attention by one of my clients as a rising concern for employers. My client asked, “Can we and should we institute an HR policy that requires private, individual arbitration in the event of an employee lawsuit?”  The research I’ve done gives the following information:
1. Arbitration is defined as a method of resolving disputes without going through the courts. An arbitrator looks at the evidence, listens to the parties, and makes a decision. This process is less formal and less expensive than a formal court or trial process.
2. Most arbitrations are a result of clauses in a contract. These clauses can be very simple or very complex, dealing with a large number of matters. The clauses can be mandatory or voluntary, and the arbitrator’s decision can be binding or nonbinding. If mandatory and binding, the parties give up their right to sue in court, participate in a class action lawsuit, or appeal the arbitration decision. An arbitrator’s decision can’t be overturned unless fraud or misuse of power can be proved.
3. In many arbitration agreements, disputes must be arbitrated through one of the big arbitration groups or associations. Sometimes, the parties can agree on an arbitrator. The charges can be in a set amount or a percentage of the amount in dispute.
4. In the employment-at-will states of New Hampshire and Florida, an employee can be terminated or may voluntarily leave for any reason or for no reason. By adding an arbitration clause to an employment application or an employment agreement, employees gain an option that isn’t currently available.
I can’t recommend adding an arbitration clause of any kind to an employment contract or application. Employees have plenty of access to legal protection in the form of representatives from OSHA, Department of Labor, Department of Employment Security, Human Rights Commission, and various additional state and federal agencies. I cannot see where adding an arbitration clause would be of benefit to any employer and don’t see it as a best practice.

Nine Scary Words: “…may elect to resolve any claim by individual arbitration.”

These words about arbitration have been showing up more and more on consumer contracts and have been proposed as part of employment agreements. For example, in a credit card agreement, these words prevent customers from filing class action suits by insisting on individual arbitration.
Class action suits have been effective in the past for fighting deceitful or illegal business practices. They allow individual consumers to band together, sharing resources, information, and experiences that show a pattern of deceitful or illegal activity.

However, those Nine Scary Words are the individual arbitration clause in contracts that prohibits individual consumers from banding together. Because it is close to impossible for one individual to take on a corporation with unlimited resources, some judges have called individual arbitration a “get out of jail free” card.

This is an issue that was brought to my attention by one of my clients as a rising concern for employers. My client asked, “Can we institute an HR policy that requires private arbitration in the event of an employee lawsuit?” My initial response was, “Arbitration is a term generally used in connection with unionized workforces. Labor issues are typically arbitrated between the union and the employer. They either reach agreement on the issue or the employees go on strike until an agreement is reached.”

Then I asked, “What do you think your employees are going to sue you over? I don’t know if private arbitration would apply when, in most cases, your employee could be represented by the Human Rights Commission, Department of Labor, OSHA, or other agencies. Your Workers’ Compensation Insurance protects you from your employees’ suing you if they get hurt at work.”

It has been getting harder to apply for a credit card or shop online without agreeing to private arbitration. If the same applies to accepting a job or hiring employees for a job, I’m not sure I understand the pros and cons well enough to make a recommendation at this time. However, I’ll do some research and have a recommendation in my next blog.

Holiday Stress: Preventing Religious Discrimination

The tension begins in October with concerns about religious and spiritual groups that do not celebrate Halloween. In Massachusetts, that concern has led some schools to ban the traditional Halloween march of children in costume and to prohibit costumes in the classroom.

Then the tension escalates as someone starts a discussion about how to name the holiday party, how to greet employees near Kwanza, Christmas, Chanukkah and other winter celebrations and how to acknowledge employees who do not celebrate any religious holidays.

Some people are antagonized by a generic “happy holidays” greeting, but I once heard what I considered a sensible response to that attitude. The response was, “When you greet people, you are wishing them a good day in their lives, not yours. If you do not know what holiday they observe, then good manners suggest a ‘Happy Holidays’ greeting.”

Good manners are an excellent rule to follow whenever you are uncertain of an employee’s religious practices. Being knowledgeable about different religious traditions can also help you react appropriately.

But beyond that, you must be careful not to practice religious discrimination even inadvertently, or you may expose your company to lawsuits and fines. Unless your company has a specific religious mission, your employee handbook should emphasize nondiscrimination. Even a general statement of belief (such as, “we follow God’s will in all we do”) is unacceptable. If the majority of your employees share a specific religious belief, you must be careful that they do not create an environment that is hostile to other beliefs or you may open your company to a claim of harassment. These are equivalent to the rules designed to prevent discrimination by gender or physical ability.

You are expected to make reasonable accommodations for individuals to observe their religion (for example, time off for high holy days or acceptance of different dress codes) if the accommodations will not cause undue hardship for the company in conducting business. Companies should also make reasonable accommodations for those who prefer not to participate in religion; for example, they should be able to arrive late or leave early to avoid invocations at company meetings.

HR Compliance 101 can help you develop policies and procedures so that you, your employees and your company enjoy the holiday season (and every day thereafter) without crossing the line into religious discrimination or harassment.

Problem Employees: Four Strategies

In an earlier blog, we discussed ways to handle problem customers. Many of those techniques will help you deal with problem employees also. But here are four strategies that are specific to handling difficult employees.

1. Make sure your Employee Handbook and employee job descriptions explain the behaviors expected and the consequences. You need to develop consistent rules and to give employees the training and information that allows them to behave well. You should not allow one employee to arrive late and reprimand another employee for lateness because the first had an excuse that appealed to you and the second didn’t. An employee cannot use protective equipment appropriately if you never told or trained the employee how to use the equipment.
2. Keep records. Every time the problem employee engages in inappropriate behavior (arrives late, misses deadlines, hassles other employees), write down the date and the circumstances. If you eventually need to discipline or fire that employee, you will have documentation as to the employee’s behavior.
3. Face the issue. Some of the most intractable problems go away once they are openly discussed but employers hesitate to bring them up and then the problems escalate. If you as the boss or manager hesitate to bring up an issue with an employee, think how helpless your other employees, vendors and customers feel. The most important step you can take in facing an issue is to listen. You cannot know what is causing an employee’s problem until you ask the employee and then truly listen to the answer.
4. Ask for help. At HR Compliance 101 we have helped many companies prevent and turn around problem employees. You want to use the right words in your Employee Handbook, job descriptions and most of all in one-on-one conversations, to prevent misunderstandings and even lawsuits. We can help train managers in how to deal with problem employees. Difficult employees can have major long-term effects on your business culture, safety and success. Let us help.

How the Minimum Wage Affects Your Business

Paying minimum wage for all hours worked

New Hampshire no longer has its own minimum wage.  Instead, it applies the federal minimum wage (currently $7.25 per hour) as the threshold wage.  However, as of January 1, 2015, under an Executive Order, federal contractors need to pay a minimum wage of $10.10 per hour.

There are a few exceptions to this minimum wage law, including special rates for student learners and tipped employees, to name a few. If you employ interns, student learners, tipped employees, or anyone under the age of 18, you need to make sure you know the special rules for these classifications. Mistakes could be costly. A violation of the Youth Employment Law could cost a company $11,000.

Paying 2 hours minimum pay

An employer must pay 2 hours of minimum pay on any given day that an employee reports to work at the request of the employer.

In New England, this is also known as the “bad weather” rule. It applies primarily to hourly employees in the private sector.

Normally, if bad weather is expected, management should decide in advance what would cause them to cancel a shift or close the offices for the day.  Smart employers tell their employees what the criteria is the night before (for example, if the local schools are closed, the office is closed), minimizing the need to reach out to employees individually.

However, if an employer doesn’t catch an employee in time, and the employee shows up for work, the employer will have to pay a minimum of 2 hours of pay. Unless there is a power outage, no heat, or no running water, the employee can be put to work for those 2 hours. There is an exception to this rule. If the employee’s job or task requires less than two hours of work that day, the employee only needs to be paid for the time worked, but this arrangement must be in writing in advance of the time worked.

Guarantee of Overtime Pay

The US Department of Labor (DOL) has proposed rules that will guarantee overtime pay to salaried workers earning less than $50,440 annually ($970/weekly) by 2016. The old threshold was $23,660 annually ($455/weekly). To receive overtime pay, therefore, an employee has to be a salaried employee and earn less than $50,440. For most employees, the DOL has the final decision on whether they are exempt or salaried depending (a) how much they are paid, (b) how they are paid and (c) what kind of work they do. This is called the “duties test.”
Even though the duties test is not being changed, far fewer employees will be eligible to be classified as exempt. On a go-forward basis, the DOL also proposes to automatically update the salary threshold, based on inflation or a fixed percentile of earnings.
If passed, the new rules don’t become effective until March 2016. This is a good time to look at your employee population and make sure they are classified correctly. HR Compliance 101 will be happy to help with that or you can do a self-assessment and reach out to us if changes need to be made.
Ivan Smith              Gertrude Jones                    John White
Duties Test Passed?                          Yes                                Yes                                        No
Salary Test Passed?                           Yes                                No                                         No
Action Needed:                              None                      Increase salary to                Re-classify as
base of $50,440                   hourly & pay
or re-classify to                    overtime for
hourly & pay OT                  hours over 40

We included this information in our 3rd quarter newsletter, but it bears repeating. If you want to receive our newsletter with compliance alerts, Q&A, information about workshops and up-to-date advice about employee, regulatory and leadership issues, please sign up at our website,

Employee Review Policies & Practices

We all know that the employment landscape changed considerably since the 80s. In 1989 & 1990, we saw employees at the middle-management level get wiped out when their jobs went away. Even to this day, some of those folks who lost their jobs in massive layoffs, are still underemployed. Since then, we’ve seen some real slowdowns in the economy, right after 9/11 and then again in 2008. I have spoken to many, many business owners who have not been able to give raises since 2008 because the money just isn’t there. This is not a good excuse not to do performance reviews.

I strongly recommend to my clients that they keep raises and performance reviews as separate events. An exception would be if an employee performs well above normal expectations and is receiving a merit raise for his/her efforts. The 10% raises that some of us enjoyed back in the 80s are gone forever. When companies had that ability and budget, it was easy to differentiate a star performer like Gertude with a 9.5% raise and give Ivan, a less-than-stellar performer, a 2% raise. But even if companies can’t give their employees additional money, they should at least do written performance reviews. People want to know how they are doing and good employees also truly want to know what areas where there is room for improvement. A fairly painless process involves letting your employees do self-evaluations. A good method is to hand the review form out with paychecks and ask your employees to return their completed forms in sealed envelopes with their names on the outside. You, in turn, complete the employee’s review BEFORE you look at what the employee wrote. In this way, if there is a disconnect in your communication, it’s easy to find out. If Gertrude thinks she is exceeding your expectations regarding her quality, and you think she is failing to meet those expectations, this gives you the basis for a discussion. You might say, “Gertrude, I’m concerned with your assessment of your quality, given the (8) rejections we received from Customer A and the (6) rejections received from Customer B. I’m curious as to how you reached your conclusion that you were exceeding our expectations.”

The timing of reviews is also pretty important. Your employees know the day (and sometimes even the first hour) that they started working for you. If your Employee Handbook or guide says that you review everyone on or around their anniversary date, that is what your employees expect. Then, when you are late delivering the review, it creates anxiety for the employee. For small companies, it is an easier process to do twice per year. In March, employees hired between Jan – June could be reviewed. In October, employees hired between July – December could be reviewed.

For help with this process, don’t hesitate to ask HR Compliance 101. We’ve helped put good review systems in place for several clients and would be glad to help you with yours.