Firing an "At-Will" Employee

Gina Madsen is one of the really bright small business attorneys in Nevada.  She recently asked me to write an article on a ‘real-life’ situation – and I chose the concept of firing an at-will employee.

Even though most states abide by at-will concepts (you can fire an employee at any time for any reason – other than a few exceptions), there are many compliance and management principles that should be followed.

Here’s the blog on her great website – http://www.madsenlawoffice.com/

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The Art of Persuasion

It’s always a little strange to see your thoughts in writing – especially if they’re being written by someone else.

I was recently interviewed by students at the USC Marshall School of Business – they are candidates for Master’s degrees in Leadership and Management.  The focus of the interview was how to persuade employees to see your point of view.

Here’s the paper (and I didn’t edit at all!)

Background:  Eric Swenson has over 20 years of experience in management, sales, training and marketing. He has managed hundreds of employees and interviewed over 2,000 people in his career. RSJ/Swenson LLC is a management and human resources consulting firm with offices in California and Nevada.

Interview Summary: Eric shared his insightful thoughts about the leadership and persuasion. For Eric, persuasion is a natural process and he prefers soft tactics. He is always honest to his superiors and subordinates. Eric believes that effective leaders are very expressive when they come to everybody. They are very candid and direct and these personal traits play a key role for persuasion process. According to Eric, the three most important aspects for managing up and down are communication, openness, and setting a positive tone that focuses on the end result.

Persuasion Strategies:

  • Self Persuasion: “If you were in my position, how would you handle my problem?”
    • You should let team members identify the solutions on their own. You also remind them why they live in the same organization. This especially helps you deal with some conflicts with your members.
  • Logical reasoning: 
    • You use facts, figures, and belief that your idea is correct. You also consider the goals, needs, and interests of your subordinates/superiors you’re trying to persuade. The more they see an idea can help them, the more likely they are to help you.
  • Persuasion Tactics: 
    • Collaboration: You need to work with your subordinates, not at them, in order to get them to enthusiastically support your requests. You collaborate with team members, rather than using authority. You don’t need to overuse that power. The relationship based on the trust is a key for the collaboration.
    • Communication/Honesty: You should facilitate communication and be very honest to your people.
    • Improving Persuasive Skills: Appeal to the subject’s self-interest: You make it sure that what you need align with their best interests.
    • Present strong evidence to support your views/positions: You do intensive research and show the team members an idea that will likely work.
    • Establish credibility: You’re more likely to persuade your subordinates when trust and respect you. You promise to take the blame if it does not go well. This leads you to build up the trust and respect you’re your subordinates.
    • Make your objectives clear: You should get your team understand what you are doing and why are why you are doing that.

Other key factors:
Decision making is a collective effort: As a leader, you have to be honest to your team members. If you found you made a wrong decision, you would change the decision. There is nothing wrong with admitting a mistake.

California Alternative Workweek Schedules

One of the best ways of improving morale without costs is to consider Alternative Workweek schedules.  Up until January 1, it has been most difficult to implement.  However, California law regarding alternative workweek schedules have been eased somewhat as a result of AB 5.

Alternative workweek schedules allow non-exempt employees in a “work unit” to work in excess of 8 hours per day without incurring overtime. (California law includes a daily overtime requirement.) Generally, an employer may propose AWS work schedules of up to ten hours per day (12 for healthcare workers). Hours in excess of 10 per day, or 40 per week are overtime. Typically employers propose schedules consisting of four ten hour days or a “9/80” schedule. Special procedures describe advance disclosure and a secret ballot election prior to implementation of the AWS.

The AWS can apply to a “work unit” within a company, rather than to all employees. Previously, the Labor Code did not define “work unit,” although state regulations included a definition. The new law defines a work unit as “a division, a department, a job classification, a shift, a separate physical location, or a recognized subdivision thereof.” The amendment also clarifies that even a single employee may qualify as a work unit as long as his job function meets the definition.

In setting up an AWS, an employer may propose a single work schedule, or it may propose a menu of work schedule options for workers to select. Can the “menu” include a traditional 5 day week for those employees who do not want to work longer days? The amended law clarifies that the menu options may indeed include a regular schedule of five eight-hour days in a workweek. Consequently, employees who do not wish to work an AWS schedule may still vote in favor of the AWS by choosing to work the regular 8 hour day. This change greatly increases the odds of achieving the 2/3 employee supporting vote need to implement an AWS.

Additionally, the new law specifies how often employees may move from one schedule option to another on the menu. For example, if an employee opts to work four 10 hour days, how frequently can he opt to go back to regular 8 hour days? As amended, Labor Code § 511 allows employees to move from one schedule option to another on a weekly basis.

Independent Contractor or Employee? Better Be Sure, And Fast!

Many employers incorrectly classify an employee as an independent contractor.  Some employers do it intentionally (to avoid workers’ compensation and payroll taxes); but most are unaware of what the difference in classification actually is.

If you use Independent Contractors (also known as 1099’s), you better audit all of them at once.  The IRS is about to launch comprehensive audits of 6,000 businesses.  The focus is – you guessed it – properly classifying employees.

Please take a moment to review the criteria the IRS uses to determine whether a person should be classified as an employee or Independent Contractor.  It’s about control.  I’ve had clients insist a person is classified as a 1099 simply because that person requested classification that way! (That’s wrong as well, by the way).

Get a qualified consultant or employment attorney to audit your practices and procedures as soon as possible.

Courtesy Baker Hostetler

Nevada Wage & Hour Lawsuits

We’ve been warning employers for several months that wage & hour compliance issues will result in numerous lawsuits this year – especially in Nevada.

It’s starting to happen.

Wells Fargo & AutoZone have been sued (class-action status is currently pending) for mis-classifying employees.

With Wells Fargo, business banking specialists were allegedly mis-classified as exempt (from overtime, meal and rest breaks) when they were required to be ‘on-call’ on certain evenings.

In AutoZone’s case, Assistant Managers were not compensated for working overtime (this is a case very reminiscent of the Long’s Drugstore case in 2004).

The federal government is taking Wage & Hour violations seriously: Labor Secretary Hilda Solis recently announced plans to add 250 field investigators, increasing staff by 33%. The DOL believes 7 out of 10 businesses are not in compliance with Wage & Hour laws.

Garry Mathiason of Littler recently wrote:

No employment-law trend is more certain, universal or important than the total wage-and-hour compliance initiative and stopping the epidemic of wage-and-hour class-action (lawsuits)…

More ominous and prescient are these words from Mathiason (and, I believe, completely true):

With thousands of plaintiffs’ attorneys examining every aspect of the payroll process, employers must expect maximum scrutiny…”Every employee who is terminated or demoted, or who experiences an unpleasant workplace event, is encouraged by Internet and television advertising to seek the advice of counsel. In almost every intake interview, the attorney’s questioning turns to wage-and-hour issues in an attempt to find additional claims. Inspired by the prospect of turning a small individual claim into a multimillion-dollar class-action, the organization’s wage-and-hour compliance goes under the microscope.”

Thanks to Las Vegas Sun.

Businesses Taking Action Against E-mails, Linkedin, Facebook

In its 6th annual survey, the security firm Proofpoint reveals some new information regarding social media and e-mails by employees – and it’s almost always resulting in bad news for the employees:

  • 43 percent of US companies surveyed have investigated an email-based leak of confidential or proprietary information in the past 12 months. Nearly a third of them, 31 percent, terminated an employee for violating email policies in the same period (up from 26percent in 2008).
  • US companies are also experiencing more exposure incidents involving sites like Facebook and LinkedIn as compared to 2008 (17 percent versus 12 percent). US companies are taking a much more forceful approach with offending employees — eight percent reported terminating an employee for such a violation as compared to only four percent in 2008.
  • Even short message services like SMS texts and Twitter pose a risk. 13 percent of US companies investigated an exposure event involving mobile or Web-based short message services in the past 12 months.

Read the entire survey here.

Why Health Care Reform Is Necessary

It’s a deliberately provocative title. And this is not an article about which reform is best for our country.

But…

The Department of Labor just came out with their statistics regarding benefits paid by employers.

The cost of medical benefits to private employers has doubled in the past 10 years.

In March 1999, employers paid an average of $1.03 per employee per hour for medical benefits (about 5.4% of total compensation)

In March 2009, employers paid an average of $2.00 per employee per hour for medical (about 7.3% of total comp).

And based on my work with small and medium-sized businesses, the quality of those benefits has declined dramatically in the past 10 years (along with huge increases in deductibles, co-pays, etc.).

Twice the cost with half the benefits. All underwritten by private businesses.

Something must be done.