Ignorance is bliss, but being clueless can be dangerous: Our experts share some of their top employee handbook horror stories

Ignorance is bliss, but being clueless can be dangerous: Our experts share some of their top employee handbook horror stories

If your employee handbook was going to be audited tomorrow, how do you think it would go? If your stomach just dropped because (a) you don’t have a handbook; (b) your handbook hasn’t been updated in over 12 months; (c) your handbook consists of a potluck of policies you and your employees contributed over the years or; (d) your “handbook” is really just a few sheets of paper stapled together, then stop what you’re doing right now and read this Tip.

Over the years our HR consultants have reviewed hundreds of handbooks, and we’ve compiled our experiences—with the anonymity of the guilty intact—to bring you some of the most common handbook mistakes. Over the next several weeks, we’ll be sharing them with you in the hopes that others’ follies will help you to save valuable time and money by giving you the inside scoop on creating, managing and implementing your handbook the right way.

Let’s begin by reviewing what NOT to do:

Mistake 1: A handbook with holes

One of our clients proudly handed us a policy manual with the following table of contents:

• Company History
• Company Hours
• Paid Time Off & Holidays
• Health, Dental, & Vision Insurance
• Short-term & Long-term Disability
• Employee Discounts
• Timekeeping

Notice something missing? Yes! About 20 essential policies. While it’s important to communicate company benefits, the handbook should also serve to convey the company’s expectations regarding performance and conduct and to meet legal requirements that call for certain policies to be communicated to employees in writing. Avoid gaping holes in your handbook by learning about what policies to include.

Mistake 2: Policies that make you say “Huh?”

Here’s an excerpt from a Florida financial services company’s policy on progressive discipline: “Employees found to have dishonored company policy shall advance through the following disciplinary steps: first offense: verbal warning; second offense: written warning; third offense: suspension; fourth offense: termination. “

What problems do you see with this policy? Well…it’s confusing, vague and way too limiting. This policy doesn’t take into account each unique circumstance and leaves no room for management discretion. Thanks to our team of HR consultants, their policy is now straightforward and does not limit the company to following the progressive discipline process sequentially.

Mistake 3: A handbook covered in cobwebs

“We just never got around to implementing it.”

We can’t tell you the number of times we’ve heard this one. If you think the hard part is creating an employee handbook, there are many businesses out there that may say otherwise. From our experience the “we-just-never-got-around-to-implementing-it” excuse is due to the perceived time involved as well as an uncertainty about how to carry out the process.

Your plan of attack: Set aside time to discuss the contents of the handbook with your staff and to answer any questions they may have. And remember, not only is the initial introduction of an employee handbook important, but so is its introduction to new employees.

Mistake 4: “Out of sight, out of mind”: Failure to regularly review and update policies

“HELP! We haven’t updated our handbook since we created it 3 years ago!”

Sound familiar? An employee handbook that is out of date can be more damaging than not having one at all. Regularly updating your handbook will help to ensure that it remains compliant with applicable laws and that it is still meeting your needs. Get insider tips for effectively reviewing and updating your employee handbook.

Mistake 5: Fire at will—but only if you have a disclaimer

We’ve heard it with our own ears: a manager who thinks his staff is doing a great job says, “Keep up the good work and you’ll be a lifer”. Or“You’ll always have a job as long as I’m around.”

You wouldn’t want your employees thinking they’ve got a job for life, would you? Your best defense against breach of contract claims is a well written employment at-will disclaimer. An at-will disclaimer makes it clear that you do not intend to have the handbook construed as a “contract” or promise of employment. Disclaimers can even help to protect the company from verbal contracts made by managers, whether intentional or not. Get tips for writing effective handbook disclaimers.

Mistake 6: Not holding employees responsible

It’s simple: The handbook acknowledgment form, usually a single sheet of paper, is necessary in order to ensure that all employees verify that they have read, understand, and are prepared to comply with company policies. But why don’t more employers require acknowledgments? Most likely it’s the perceived time and energy that’s involved in the acknowledgment process: sending them any time there is an update, keeping track of who’s signed it and who still needs to, and properly storing completed forms.

Save time and money: The exclusive HR411 Employee Handbook Wizard simplifies this process for you by requesting your employees to complete acknowledgments electronically. Returned acknowledgments are stored in your account to be viewed and downloaded at your convenience—no paper involved.

 Mistake 7: Cutting corners by creating a Federally-focused handbook

Too often we see handbooks that only have a federal focus. What many employers forget is that state law is often more stringent than federal law. And when the two laws differ, the law that provides employees with greater protections must be followed.

Here’s one California employer’s policy on overtime: “Overtime is payable for all hours worked over 40 per week at a rate of one and one-half times the nonexempt employee’s regular hourly rate.”

What’s wrong with this? While the above policy complies with federal law it doesn’t comply with California overtime provisions. Almost all California employees must be paid overtime for all hours worked in excess of 8 in a workday, in excess of 40 in a workweek, or for the first 8 hours worked on the seventh consecutive day worked in a workweek. Be sure to check your state requirements or ask our experts and get the peace of mind that comes with meeting both your state and federal obligations.

Mistake 8: Managers are clueless about how to apply company policies

Have you held meetings with managers on how each policy is to be enforced?

We’ve seen all too many times: inconsistency breeds legal claims. Consider this: an employee files a discrimination suit because he was suspended following his third tardy in a 30 day period; but Sally, his co-worker, was only given a written warning for the same exact infraction. To prevent claims of bias, make sure managers use even-handed discipline and consistently apply all company policies.

Stay tuned for more “tricks of the trade”:

This is by no means a complete list of the mistakes employers make when it comes to employee handbooks and policies. While these mistakes are all too common, our upcoming Handbook Series will divulge the tricks of the trade to help ensure you don’t fall victim. It’s easy to reap the benefits of a legally sound employee handbook—if you know what you’re doing. So, stay tuned for tips, tricks and details on how to PROPERLY create, maintain, and implement an employee handbook

Implementing a Background Screening Program

 Background checks are useful tools for employers in hiring and promoting the most qualified individuals. They can help identify and screen out those candidates who have given inaccurate information on employment applications, or who might present a risk of violence or theft in the workplace.

For employers new to the screening process, there are some things to consider before the full implementation of a background screening program can take effect. First, a formal policy on background checks must be created. In drafting a screening policy, employers should consider the types of positions warranting background checks, the process for screening existing employees, and the types of information they wish to collect. In order to answer these questions and create a legally defensible screening policy, employers should adhere to the following steps:

1. Identify “sensitive” positions. Employers need to first identify positions or job duties deemed “sensitive”, or those that otherwise have the potential to threaten the security of the company, its employees, or its customers. Positions of sensitivity may include those that require the handling of important company information, exposure to confidential issues, the care of others, or access to company property or other proprietary information. The bottom line: employers need to have a legitimate business reason to conduct background checks. It is important to note that in some cases, background checks may actually be required by state or federal law. Most states require criminal background checks to be conducted on anyone who works in the securities industry or those who work with children, the elderly, or the disabled.
2. Determine the process for screening existing employees. It is recommended that in order for a screening program to have value, employers need to screen their existing employees as well. Employers should screen current workers who are performing duties deemed as “sensitive”. Additional circumstances in which screening existing employees is necessary are when: (1) it is required by state or federal law; (2) position responsibilities change, resulting in the position being designated as “sensitive”; or (3) the employer learns of a felony conviction or other offense that adversely affects one’s ability to perform the job or has an adverse effect on the company if employment is continued.
3. Determine the types of information you will collect for each position. Information sought in a background investigation should be job-related; therefore, the type of background check an employer conducts depends on the parameters of the position. Some things to consider before determining the appropriate type of background check to conduct include the following: How often will the position’s duties require exposure to company funds? Will the position require the operation of machinery or the driving of a vehicle? How many years of education or experience are required for the individual to be successful in their role?
4. Establish time-frames. It would be unrealistic to run a background check on every applicant at the initial stage of the hiring process. It is recommended that a background check be the last step, after other means of weeding out candidates has been exhausted (i.e., resume and application review, phone screening, interviews, and reference checking). Ideally, employers should wait to run a background check until they are ready to extend a job offer. And in this case, the offer should be made conditional pending the results of the background report.
5. Determine offenses considered disqualifying. Employers need to determine what offenses will result in an automatic refusal to hire. And sometimes the offenses themselves are not the only things to consider when making an employment determination. The length of time that has passed since the conviction, the number of convictions an individual has on his or her record, the relationship between the job to be performed and the crime(s) committed, and his or her subsequent employment history should all be taken into consideration when determining ones eligibility for employment. To refuse or discharge employment based on a criminal conviction, the employer needs to determine if the conviction is job-related. The employer bears the burden of proving that the specific job requirements justify denial of employment.
6. Establish adverse action procedures. When a background check reveals a criminal history or other negative information, employers may decide to take adverse action. Taking adverse action typically means not hiring, or not promoting someone based on the results of a background check. When negative information is discovered, provide applicants and/or employees with an opportunity to explain any potentially damaging or negative background information. Next, complete a Preliminary Notice of Adverse Action form, which is intended to inform employees or applicants that based on the information found in their background check, a preliminary decision has been made to deny the applicant employment, or to terminate the employee. Once a final decision has been made not to hire or promote the individual, a final notice to the applicant or employee should be given in writing.
7. Apply the process consistently. The single most important aspect of implementing a screening program is consistency. Employers must never conduct background checks on a selective basis; all similarly situated applicants must be treated the same. In the event you are confronted with a negligent hiring lawsuit, the reliability of your screening process and how consistently you’ve applied it will be put under scrutiny.
8. Ensure confidentiality. Employers must maintain the confidentiality of all background check information. Train all professionals that will be handling or reviewing background check information in the importance of preserving its confidentiality. In addition, keep all records under lock and key at all times.

Pre-employment screening promotes a safe work environment by reducing the risk of a bad hire. With an increase in negligent hiring, escalating recruitment and training costs, and an upsurge in workplace violence and theft, employers need to seek as much information as possible on prospective employees. However, in doing so they must be sure not to overstep their legal bounds. A published policy on conducting background investigations should reflect the employer’s effort to balance its “need to know” with employee privacy rights.

Legal Considerations when Conducting Background Checks

Background checks are essential in ensuring consistently good hiring decisions. In addition to helping protect company finances and resources, they can serve to ward against negligent hiring lawsuits and unsafe working conditions for other employees and your customers.

But, running background checks isn’t as simple as entering candidate information into a database; it requires some preparation. If executed without the proper care and attention, employers risk liability. Below are the necessary legal guidelines that must be followed when running background checks:

1. Comply with the FCRA. The Fair Credit Reporting Act (FCRA) regulates how employers may obtain and use the information disclosed in background investigations. The Act states that the following information cannot be reported: arrest records; civil lawsuits and civil judgments after 7 years; accounts put in for collection after 7 years; paid tax liens after 7 years; and any other negative information (besides criminal convictions) after 7 years has passed. If employers uncover any of this type of information, they may not use it in making an employment decision.

2. Adhere to the EPPA. The Employee Polygraph Protection Act (EPPA) prohibits the use of polygraph tests by private employers except under specific, limited circumstances. For instance, applicants for positions that are within federal contracts with defense, national security, or federal law might be required to pass a polygraph test prior to employment. It is important to determine your company’s position as it relates to the EPPA as well as any applicable state regulations in this regard.

3. Establish a screening policy. Before conducting background investigations, you should have a published policy on the process. A policy on background checks should indicate when the checks will be conducted, for which types of positions, and the kinds of information that will be collected. The policy should reflect the employer’s effort to balance its “need to know” with employee privacy rights. For a sample policy on background checks click here.

4. Examine application materials. Review of the employment application should be the initial step of the screening process. You should be utilizing the employment application as a means to weed out candidates, to verify information during an interview, and to look for inconsistencies or employment gaps. When inaccurate or undesirable information is found early in the hiring process, it saves you the time and money involved in interviewing and screening an applicant that just isn’t a good fit.

5. Obtain written consent. All employment applications should include a statement above the applicant’s signature line summarizing the specific types of background checks that may be conducted. A separate document requesting authorization to conduct background checks may also be a good idea. This way applicants and/or employees are aware of exactly what they are agreeing to.

6. Run only job-related checks. The type of background check an employer conducts must depend on the parameters of the position, and therefore, needs to be job-related. For instance, an applicant applying for an administrative assistant position, in which the individual is not expected to operate a company vehicle, should not be subject to a driving record check.

7. Be consistent. So as to avoid claims of discrimination, employers must never conduct background checks on a selective basis. All similarly situated applicants - those applying for the same or similar positions - must be subject to a background investigation prior to receiving an offer of employment.

8. Ensure confidentiality. Employers must maintain the confidentiality of all background check information. Train all professionals that will be handling or reviewing background reports on the importance of preserving its confidentiality. In addition, keep all records under lock and key at all times.

Before diving into the screening process employers should be sure they have a clear policy on background checks, that they have adequately used the employment application as a screening tool, and that they have obtained consent prior to running background investigations. Additionally, keep in mind that background checks should never be run on an inconsistent basis and all practices surrounding their use must be compliant with state and federal screening regulations.

10 Tips for using Employee-Friendly Work Practices to Manage Absenteeism Rates

On average, unscheduled absences cost businesses $650 per employee per year – not exactly chump change when you consider the number of employees on your payroll. Beyond the monetary costs associated with missed work, absences also inconvenience customers and co-workers, slow productivity, and can negatively impact employee morale.While absences are inevitable, employers can limit the number of unnecessary absences by implementing some simple employee-friendly work practices, such as flex-time, childcare assistance and health and wellness programs.

Below are 10 tips to reduce employee absenteeism and make your company a better place to work:

1. Manage employee stress. Stress is the leading cause of absenteeism among employees. Common workplace stressors include excessive workloads, long hours, conflicting expectations, and poor management. To help diminish some of the negative effects of stress – and increase employee attendance rates - consider encouraging regular rest breaks, setting realistic expectations, and training your managers to build positive working relationships with their staff.
2. Facilitate employee engagement. Employees who are engaged are more satisfied and typically miss less work days than employees who are dissatisfied or disengaged. To facilitate employee engagement, get employees involved. Hold regular staff meetings to inform employees of business goals and objectives and to solicit their feedback on different business initiatives. Other options for bolstering employee engagement include: taking a vested interest in employees’ career development, providing increased job responsibilities, and allowing for greater employee autonomy.
3. Promote teamwork. Poor co-worker relations can be a significant contributor affecting an employee’s decision to take time off of work. In an effort to avoid confrontation, many employees will opt to call out of work rather than face their problems head on. To promote positive workplace relationships, use teambuilding activities, such as trust exercises, ice-breakers and role-playing. When employees work together, bonds will intensify and an appreciation for one another will emerge.
4. Reward regular attendance. Recognition is a powerful form of reinforcement and can go a long way in boosting employee attendance rates. Let employees know you appreciate their hard work and dedication. Whether it’s a simple “thank you” note or an award plaque provided at a company event, recognition doesn’t need to be extravagant.
5. Tie attendance to performance. For employees to realize its importance, attendance should be a part of the performance evaluation process. Awareness that attendance patterns have the potential to impact their performance review may be all that’s necessary to prevent unnecessary absences all together.
6. Implement flexible work schedules. Work/life balance is difficult for many working Americans to achieve. You can help lessen the stress that comes with juggling work and personal obligations by developing flexible work arrangements, such as compressed workweeks, flex-time, job sharing, or telecommuting. These options will ensure employees don’t miss important work requirements and are always there when you need them to be.
7. Child care assistance. Consider offering childcare assistance to further help circumvent unexpected absences. “Back-up” daycare programs, which employees can use on an occasionally basis to fill unexpected gaps in daycare, are becoming more popular among employers. Some employers subsidize these programs and require employees to pay for a portion of the service while others provide a predetermined number of days per year which can be used for backup care, free of charge. Not only does childcare assistance promote employee morale, but it will also serve to severely cut down on unplanned absences.
8. Encourage health & wellness. Studies have proven that employees who take part in health and wellness programs are less likely to take sick days and are more alert and focused during the workday. Employers should consider promoting a health and wellness culture by educating employees on proper nutrition and effective exercise techniques, organizing a walking group during lunch breaks, and offering incentives for employees to participate (think discounts on health insurance premiums). A healthy workplace is a happy one!
9. Promote a positive public image. Make your business a place employees are proud to come to every day. Consider getting more involved in the community and encourage employee participation in community activities, such as charity walks and participation in local big brother/big sister programs. Not only will these types of activities have a positive affect on morale, but they will also serve to positively impact your’ company’s image.
10. Ensure consistency. Company procedures need to be enforced consistently and fairly in order to be effective. Say, for instance, Sally and John were both absent three days this month; Sally received a written warning and John was terminated. These types of inconsistencies in applying workplace rules will be viewed as biased and discriminatory, which can be disheartening for fellow employees. Rules regarding attendance must be applied in a timely and uniform fashion for employees to truly get the message.

Employee attendance is directly linked to employee satisfaction. Engaged and well adjusted employees are less likely to take time off of work, whereas unhappy or stressed employees are more likely to use their allotted time off and then some. Make your company a great place to work and you’ll likely see a decline in employee absenteeism rates and an increase in productivity.

HR411.com CEO on “The Growth Strategist(TM)” radio program

Our CEO sat down to talk with Aldonna Ambler, host of VoiceAmerica Talk Radio Network’s “The Growth Strategist™” which broadcasts live every Tuesday at 8am PDT (11am EDT).  Listen to him discuss the company’s rapid growth through strategic partnerships, and please check out the press release.

“Are you really going out in that!?” 10 tips for developing employee dress code policies

As warm weather approaches, employee dress habits tend to become more relaxed. With the summer months almost here, now is the perfect time to review your company’s dress code policy. Not only is inappropriate dress a distraction, some employees may find it offensive. And while employee productivity is certainly a concern, company image may also be compromised by poor workplace dress habits. Your employees’ appearance is directly tied to your company’s image and an inappropriately dressed staff doesn’t promote the company in a positive light.Below are 10 important considerations when developing a dress code policy to ensure that your employees dress for success:

1. Communicate the reasons for your company’s dress code. Your dress code policy should align with your company’s philosophy, mission, and business strategy. If your company is more traditional, a conservative dress code may be most appropriate. However, if your company is more creative or cutting edge, your dress code may be a bit more relaxed. For employees to buy-in, there needs to be a connection between what the company does and the image you wish to portray.
   

2. Think about the work employees do. Sometimes the type of work employees do will dictate how they should dress.For example, an employee working in a production facility should not be permitted to wear open-toed shoes due to obvious safety concerns. However, because this individual works with machinery, he or she may be permitted to dress more casually than other employees with regular exposure to clients or customers.
   

3. Will casual days be permitted? Comfortable dress has been shown to boost employee morale. As such, many employers have implemented “Casual Fridays” as a benefit for their employees. If you okay casual dress days, it is important to define what “casual” means (e.g., maybe jeans are acceptable, but not sweat pants) and indicate when employees are permitted to dress casually.
   

4. Be specific about what’s prohibited. Provide examples of what is, and what is not appropriate dress for your office. Include in your policy that, for example, opened-toed shoes, tank tops, short skirts, and revealing and form-fitting clothing are not permitted. Also, be sure to indicate the type of attire you expect your employees to wear with examples included. Specificity will ensure employees understand exactly what is, and what is not, allowed at work.
5. Appearance doesn’t just mean clothing. Polices relating to personal appearance should not only regulate employee dress, but they should also communicate guidelines relating to hygiene and other physical characteristics, such as piercings, tattoos, or facial hair.

6. Consider discrimination concerns. To avoid legal liability, make sure your policy does not adversely affect employees of a protected group. For instance, women have argued that requiring them to wear skirts or dresses is discriminatory. Make sure your policies apply evenhandedly to all employees. Dress codes should never favor one gender over the other or certain religions, races, or employees of a particular national origin.

7. Disciplinary action. It is important to clearly state the repercussions for failing to comply with your company’s dress code policy. Will employees be sent home to change? If so, will they be paid for their time spent away from work? Will employees be issued warnings based on the number of offenses as well as the severity of the violation? Whatever consequences you decide to apply to your dress code, make sure your employees are aware of it. When employees understand the consequences, they are more likely to abide by the policy.

8. Promote awareness for the policy. Employees must be aware of your company’s dress code policy in order to comply with it. Remember to reinforce the policy during company meetings, through company memos, and throughout the orientation process.

9. Be a role model to your employees. Dress how you would like your employees to dress. You can’t expect employees to wear a suit and tie if company executives show up in jeans.

10. Apply the policy consistently. To avoid allegations of discrimination, be sure to consistently apply your dress code policy. Policies are intended to ensure everyone is treated fairly and that all employees are held to the same standards. It’s important to train your managers to consistently respond to dress code violations and to always follow company policy when doing so.

There are a variety of issues that should be addressed when determining an appropriate dress code policy for your company. Consider the image you would like to portray to clients and customers as well as the policy’s implications on employee performance and morale. Regardless of the policy you decide to incorporate, it should be clearly communicated and consistently applied.

“No way, we won’t pay!” 10 essential steps for successfully fighting unemployment claims

You recently terminated a store employee for theft. You investigated the situation—even viewed surveillance cameras—and there was no mistaking it: the employee was clearly shown stealing money from the cash register. Now, two weeks later, you receive a notice from the state unemployment agency advising you that the employee has filed for unemployment.Think it’ll cost too much to try and fight the claim, or it’s not worth your time and effort? Think again: Each claim can triple your unemployment rate which could mean thousands in extra taxes each year! While it may not be wise to contest all claims, it is certainly worth fighting them when a former employee isn’t entitled, especially in a situation where the employee was terminated for misconduct.

Because your unemployment compensation tax is closely tied to your company’s claims history, you should promptly challenge any claim that you believe is not justified. Below are a few simple steps you can take to help keep your unemployment rates to a minimum:

1. Know your numbers. Know how many unemployment claims are open and the number of claims you have won or lost. This will determine your current unemployment rate and whether or not you can expect an increase in your taxes the following year.

2. Understand qualification requirements. Not all claims are worth contesting. The amount of time and energy put into fighting a claim isn’t worth it if, by law, an employee is entitled to the benefits. In general, the grounds for disqualification are narrow and are interpreted in a way more favorable to the employee whenever possible. However, workers can be legitimately denied benefits for a number of reasons, such as simply not earning enough in wages to qualify, being discharged for misconduct, or for voluntarily resigning “without good cause”.

3. Become familiar with the process. In order to combat claims, it is important to understand how the process works.The claims process begins with the separation of the employee and a claim filed on their behalf. Shortly thereafter, you will then receive a notice in the mail; you can either ignore it or contest it. The agency will then make a decision, in which you or the separated employee is free to contest. At that point, an unemployment hearing is scheduled and a decision is made by the hearing officer. If you choose to appeal the hearing decision, it goes to the Board of Review for a final determination. An understanding of the process will help you to make appropriate decisions each step of the way, ultimately increasing your likelihood for success.
4. Take immediate action. As soon as you receive a notice from the state unemployment agency, respond by disputing it. Failure to respond within a certain time period (typically 7-14 days) indicates your acceptance of the claim as valid and the employee will likely be eligible to collect – costing you more money.

5. Gather documentation. Good recordkeeping is essential in successfully contesting any claim. Documentation of disciplinary notices, resignation letters, and other related evidence demonstrating the reason for termination will be vital in supporting your case. If there are witnesses, be sure to also get written statements from them. Remember that documentation stems from a solid employee handbook. When employees clearly violate company policy it is important to discipline them accordingly and have them sign off on it. This may be all that’s needed to prevent the employee from collecting.

6. Provide evidence for the involuntarily terminated. When dealing with involuntarily terminated employees, be prepared to show proof of misconduct on the employee’s part. An employee who is fired for inadequate performance will usually collect benefits. However, an employee that intentionally or deliberately disregarded company standards of conduct may be denied benefits. Fighting, insubordination, stealing, committing illegal acts on company property, failing a drug test, etc., are often legitimate grounds for a misconduct-based disqualification, depending on the state.
7. Provide evidence for the voluntarily terminated. Employees who resign voluntarily and without good cause are usually disqualified from receiving unemployment compensation. However, the question of “good cause” comes up frequently. “Good cause” is generally understood to mean a real, substantial, and compelling reason that would lead a reasonable person to quit under like circumstances. In most states, the employee must establish that he or she had good cause to leave the job and that the reason for leaving can be attributed, at least in part, to the employer’s actions or lack of action (e.g., failure to correct sexual harassment in the workplace). An employers’ best defense to an employee’s claim that he or she had good cause to quit is a signed resignation letter or statement from the employee setting forth the specific reason for the separation.
8. Attend all hearings. Once a claim is contested, in-person hearings are scheduled shortly thereafter. Always come prepared with as much information as possible and know how the law applies to your case. The law should support your view that the worker was separated under disqualifying conditions, such as misconduct or voluntary resignation without good cause. Legal representation at the hearing may be appropriate, particularly in contentious situations where other employment-related litigation may be anticipated.

9. Put your best foot forward. Prior to an in-person hearing, be sure to thoroughly prepare. Be ready to answer questions pertaining to the circumstances surrounding the employee’s termination, his or her performance, and the like. Have documentation ready to support the statements you provide during the hearing, including resignation and termination letters, the employee’s personnel file, and witness signatures. In addition to witness signatures, it is important to have at least one witness present that can support your claim. Other tips for putting your best foot forward during an unemployment claim include: being on time, only answering questions that are explicitly asked of you, remaining calm, and never speaking out of turn.

10. Contest the hearing decision. Although not particularly cost-effective, employers that are dissatisfied with the outcome of the hearing can generally protest the hearing officer’s decision to one or more appeals within the state unemployment agency itself and then through the state court system.

Given the current state of the economy, unemployment claims are increasing and employers are getting stuck footing the bill. While it may not be wise to contest all claims, it is certainly worth fighting them when a former employee isn’t entitled. Combating all undeserved claims will help to keep your unemployment rate low and prevent you from paying through the nose in taxes.

Your best defense against unemployment claims starts before you terminate an employee. For insight into effective and legal termination practices be sure to check out our complimentary Webinar: Employee Terminations & Layoffs: 8 Steps for Avoiding Termination Lawsuits.

9 HR Programs you can’t afford to Cut

Given the current economic climate, many businesses are looking to cut costs where ever they can. Typically when cuts are necessary, a company’s human resources programs are first to go. But, before automatically removing some of your key HR initiatives, it’s important to evaluate their potential return on investment. A little time and money spent now may help your company stay afloat during these difficult economic times.Even in a tough economy, don’t put these key HR initiatives on the back-burner:

1. Performance reviews. Performance reviews help identify your key contributors as well as those employees that may be in need of improvement. When exceptional performance is documented it serves as a means to reward employees accordingly in the form of merit increases or promotions. When unsatisfactory performance is recognized, performance appraisals serve to support decisions relating to training and development needs and even discipline and termination. When used effectively, regular performance reviews can save your company big bucks by improving overall employee performance and removing under-achievers.
2. Job descriptions. Job descriptions have a variety of really important uses. In terms of employee efficiency and productivity, job descriptions give you the most “bang for your buck” by communicating to employees exactly what they are responsible for. This eliminates uncertainty and saves managers the headache of answering basic employee questions relating to job responsibilities.
3. Legal compliance. Failure to understand and comply with major employment laws can cost your company big in the way of a tarnished reputation, legal fees, and governmentfines and penalties.To prevent legal liability,make sure you’re on top of recent changes in employment laws and how they affect you, including new requirements under the FMLA, ADA, and COBRA.
4. Recognition programs. You need to keep talented employees around in order to drive your business forward. While you may not be able to afford to offer your employees regular pay increases, there are some other simple and cost effective ways to show your staff they’re valued. Simple forms of recognition such as offering “employee of the month” awards, flexible schedules, and increased autonomy and responsibility may be all that’s needed to keep your key contributors around.
5. Background checks. With more employers getting bit by negligent hiring lawsuits, now more than ever, it’s important to really know who you’re hiring. Spending a few dollars on a background check can prevent major trouble down the road, including: lost company finances and resources, negligent hiring lawsuits, and unsafe working conditions.
6. Employee handbooks. Management will find that compiling an employee handbook will be time well spent and saved. Instead of distributing multiple company memos and/or holding company meetings to discuss policies and procedures, the information is compiled within one document serving as an efficient source of communication between the company and its employees. Additionally, by law, certain information must be provided to employees in writing, such as EEO statements, sexual harassment policies, and leave of absence policies. An employee handbook serves as a great way to meet these legal obligations. Creating an employee handbook doesn’t have to be time-consuming or expensive: check out the HR411 Employee Handbook Wizard and see for yourself.
7. Employee training. To be effective, employees need to know how to do their jobs. Training is the best way to accomplish this goal, and it doesn’t need to be expensive. In fact, training can be as simple as an employee shadowing another co-worker for a day or rotating among different jobs for cross-training purposes. All of this will add to your employees’ skill level and will help in terms of future career progression. For all your training needs, check out our ready-to-go PowerPoint training programs.
8. Hiring. While hiring a new employee may be necessary, spending big bucks on the process doesn’t have to be. Use cost effective recruiting resources, such as your peer network, free job posting sites, and employee referrals. And don’t forget to look to applicants that have applied in the past. Previous candidates may not have been a good fit when they first applied; however, varying requirements, changing business needs, and new openings may make a previously mediocre candidate an ideal one this time around. Sometimes, timing is everything!
9. Orientation & onboarding. You may think once an employee accepts your offer, you no longer need to put your best foot forward. Well, you’re wrong. In fact, employee turnover is highest in an employee’s first week on the job. After spending all that time and money finding the ideal employee, it would be a waste if he or she decided to leave after just a few days on the job. To keep your valuable new hires around, it’s important to have a formal onboarding process aimed at making new employees feel welcome. Part of the process should include assigning the new employee a mentor, reviewing company information and job responsibilities, and clarifying performance goals. These simple steps could mean the difference between keeping an employee around for the long haul and spending thousands in replacement costs.

Instead of thinking about cutting certain programs or initiatives, consider how you can better utilize these critical HR programs to your advantage. Doing so can result in a workforce of talented and productive employees that will help to keep your business profitable, even during touch economic times.

Understanding your New & Pre-existing COBRA Requirements

The Consolidated Omnibus Budget & Reconciliation Act (COBRA) is designed to permit individuals who would otherwise lose their health insurance coverage to continue coverage through their employer, or former employer, at group rates. Employees electing COBRA coverage are responsible for paying the full premium themselves and may be required to pay a 2% administrative fee.

COBRA applies to employers with 20 or more employees who offer group health insurance. However, many states have enacted their own COBRA requirements which cover employers with less than 20 employees. Download our COBRA Continuation by State form to determine whether or not your state has specific guidelines on the issue.

…And as if general COBRA requirements aren’t already confusing enough, the American Recovery & Reinvestment Act (ARRA) - signed into law on February 17, 2009 - has added another element to COBRA: subsidized premiums. Below is a break-down of existing COBRA requirements as well as new COBRA provisions under the ARRA:

General COBRA Requirements (pre-ARRA enactment):

1. Covered employers. Employers must comply with federal COBRA requirements if they have 20 or more employees and offer group health insurance. However, as mentioned above, many states have enacted their own COBRA regulations that cover employers with less than 20 or more employees. Check your state requirements here.
2. Qualifying events. An individual is entitled to COBRA coverage when certain “qualifying events” would otherwise trigger him or her to lose health insurance coverage under their employer’s group plan. Such events include: termination or reduction in hours; divorce or legal separation of a covered employee from his or her spouse; death of a covered employee; change in dependent status; eligibility for Medicare; and the bankruptcy of an employer from which a covered employee has retired.
3. Employer notice requirements. An Initial Notice of COBRA Rights must be provided to all covered employees and their covered spouses when a plan first becomes subject to COBRA. This notice must also be provided at the time an individual’s coverage begins, including when new employees obtain coverage and when spouses are added. When certain qualifying events occur (including the death of a covered employee, termination or reduction in hours, and the employee becoming entitled to Medicare), the employer must notify the plan administrator within 30 days. The plan administrator then has 14 days from the date of receiving notification of the qualifying event in which to advise the qualified beneficiary of COBRA rights.

4. Employee notice requirements. A covered employee or qualified beneficiary is required to notify the plan administrator of a qualifying event that is a divorce or legal separation of the covered employee or when a dependent child ceases to be a covered dependent under the plan terms. When one of these events occur, the employee has 60 days to notify the plan administrator.
   

5. Premiums. Under COBRA, qualified beneficiaries are responsible for 100% of the premiums as well as a 2% administrative fee, if the employer chooses to charge such a fee. The initial payment for COBRA continuation coverage is due 45 days after the date on which the election of COBRA continuation coverage is made.Timely payment for subsequent periods of coverage is due 30 days after the first day of that period. A group health plan must allow payment for COBRA continuation coverage in monthly installments. A plan is permitted to also allow payment at other intervals (i.e., weekly, quarterly, or semiannually).
   

6. Duration of coverage. The maximum COBRA coverage period extends from 18-36 months, depending on the type of qualifying event.In the case of a termination in employment or reduction of hours, the maximum coverage period ends 18 months after the qualifying event. In the case of a qualifying event that is the death of the covered employee, the divorce or legal separation of the covered employee, or a dependent child exceeding the plan’s age limit for coverage, the maximum coverage period ends 36 months after the qualifying event. For a COBRA coverage timeline depicting maximum coverage periods based on each type of qualifying event, click here.
7. End of coverage. COBRA coverage ends when the qualified beneficiary exceeds the maximum coverage period or upon the occurrence of one of the following events: the qualified beneficiary becomes enrolled under another group health plan; premium payments are late; the employer no longer provides any group plan; or the qualified beneficiary, after electing COBRA coverage, becomes entitled to Medicare benefits.

New COBRA Provisions (post-ARRA enactment):

The American Recovery & Reinvestment Act (ARRA) grants individuals involuntarily terminated between September 1, 2008 and December 31, 2009 a subsidy toward their COBRA premium payments. Under the ARRA, employers are still required to follow the above guidelines, while keeping in mind the following:

1. Assistance eligible individuals (AEIs). Assistance eligible individuals are those individuals that are entitled to receive a subsidy toward their COBRA premiums. Although COBRA covers other qualifying events, subsidy eligible individuals only include those involuntarily terminated between September 1, 2008 and December 31, 2009. For purposes of the ARRA, an involuntarily terminated individual is one who is terminated for reasons other than gross misconduct, and does not include those who resign or abandon their jobs.It’s important for employers to identify assistance eligible individuals now so that they can easily prepare and send COBRA notices by the April 18^th deadline.
2. Amount of subsidy. Assistance eligible individuals who elect COBRA coverage will receive a 65% subsidy toward their applicable COBRA premium for a period of nine months. For example, if an individual’s monthly COBRA premium is $1,000, the individual would only be required to $350 for nine months (or until their COBRA coverage ends). The remaining $650 is subsidized and would be paid by the employer. Although employers must provide 65% of the COBRA premium up-front, they are reimbursed in the form of a tax credit. Assistance eligible individuals may start receiving the subsidy as early as March 1, 2009.
3. Premiums for March & April. Although subsidized premiums began March 1, 2009, the ARRA permits assistance eligible individuals to be charged for the full premiums for the months of March & April. However, if assistance eligible individuals pay the full premiums for these months, they are entitled to a credit toward future COBRA premiums. If this credit is not used within 180 days, the employer must send assistance eligible individuals a reimbursement check.

4. Compliance timeline. Immediate notification to assistance eligible individuals is not necessary. The Department of Labor (DOL) plans to release a model notice by mid-March. Employers will then have until April 18^th to send notices to assistance eligible individuals. It’s recommended that employers use the DOL approved notice, and therefore wait until it is issued, rather than attempt to draft the notice themselves. This will ensure all appropriate information is included and that assistance eligible individuals are fully aware of their rights under the ARRA.

5. Loss of the subsidy. An assistance eligible individual loses their right to subsidized premiums once they have received the subsidy for nine months, once he or she exceeds their maximum COBRA coverage period, or once he or she becomes eligible under another group health plan. Whether the individual chooses to enroll in the plan for which they became eligible doesn’t matter; they will still lose their eligibility for the premium subsidy. However, this does not mean the individual is no longer covered under COBRA.

6. AEIs that declined COBRA. Individuals involuntarily terminated since September 1, 2008 (but before ARRA enactment) that failed to elect COBRA coverage during their initial election period are entitled to an additional opportunity to elect COBRA. These individuals have 60 days from the date notices are sent in which to do so. If the individual choose to elect coverage, their length of total COBRA coverage starts from the date in which they were terminated, not the date from which they elected coverage.

7. AEIs already on COBRA. Assistance eligible individuals that elected COBRA coverage prior to ARRA enactment must receive notice of the premium subsidy by April 18, 2009 and their premium payments must be reduced by 65%. As mentioned above, the Act does permit assistance eligible individuals to be charged for the full premiums for the months of March & April; however, they must be reimbursed.

8. Employer reimbursement. Employers are responsible for paying 65% of applicable premium payments; however, they will receive reimbursement for their share of the payments in the form of a tax credit. Employers may request reimbursement by filing IRS Form 941, which is filed quarterly by all employers in order to report their payroll taxes.

Understanding your requirements as they pertain to COBRA as well as your state-specific health insurance continuation laws is essential for ensuring legal compliance. With the ARRA already in effect, employers need to take action now in order to prepare for administering the COBRA subsidy and ensuring COBRA notice deadlines are met.

Chances are you have questions about how COBRA affects you and how to implement the proper changes and administrative steps in your company. Not to worry–HR411 is here to help!We’ve developed an all-in-one solution to help you easily meet your requirements: The Complete COBRA Compliance Kit.This comprehensive kit provides all the guidance, tools and resources you need to get and stay in compliance, PLUS unlimited emailsupport for all your COBRA questions from a team of HR Experts!

Introducing The Complete COBRA Compliance Kit

If you’re like most small businesses, you’re not sure exactly how the new COBRA requirements under the American Recovery and Reinvestment Act affect your business, but you know you want to make sure your business is in compliance. We understand this and have created a complete compliance solution: The HR411 Complete COBRA Compliance Kit. You get everything you need to understand and comply with the new COBRA regulations, PLUS unlimited email support for all of your COBRA questions through April 18, 2009.

Even better, we’re offering 2 free Webinars this month to walk you through the new regulations step-by-step. Seats fill up fast, so be sure to reserve yours today!

March 11th 2009 11:00AM-12:00PM | REGISTER NOW

March 25th 2009 2:00PM-3:00PM | REGISTER NOW