My 7 to 7 Rule

Posted on June 1, 2018 in Consulting

 

I adopted a new “7 to 7 Rule” some time ago after realizing that I let work spill over into the personal time of my family and colleagues. Simply, I choose to engage my associates between 7 a.m. and 7 p.m. during workdays. Any time outside that window, including weekends, are off limits.

That my family is the biggest fan of the Rule is no surprise. If I am thinking about work, I am not engaging with my family. Everyone needs a break and an opportunity to relax so that they are better prepared to fully engage the next day. If you want to read more on this concept, then check out The Power of Full Engagement by Jim Loehr and Tony Schwartz. I generally hate anything on the self-help aisle, but I love this book. Its message is straight-forward: we should first manage our energy rather than our time. In all aspects of life, therefore, we should focus, dedicate, and then take breaks so that we can begin each day stronger and more engaged. In other words, we should think of life as a series of sprints as opposed to a marathon.

There is another great rationale for this rule and the teachings in The Power of Full Engagement: namely, to be our best is physically and mentally impossible when we are tired and unfocused. My late-night texts and emails often turn into digressions and diversions. Bosses usually offer nothing genius in late-night communications. And sadly, late-night supervisor communications are more often associated with inappropriate intentions and very bad messages. See the demise of Roseanne. Only TV stars can blame Ambien; the rest of us live with significant personal impact for insipid comments. If a light-bulb really turns on, supervisors should take note and address the issue during normal business hours. The habit I have been developing is to send myself an email whenever a work thought surfaces; then, I can have a personal reminder during the next business day to address my thought with colleagues.

Most obviously, inconvenient urgencies arise affecting our teams. But the term “urgent” should be used literally and sparingly. If everything is urgent, then nothing is urgent and priorities get confusing. And when true urgencies arise, supervisors must contribute at the same level as their teams.

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DOL Game Changer

Posted on May 4, 2018 in Uncategorized

The stability and predictability of 78 years of wage and hour law has been in flux over the past year, and things got really interesting just last week. On Wednesday, July 26, 2017, the Department of Labor issued a Request for Information (“RFI”) that suggests the government might – I stress might – rework the fundamentals of wage and hour law. The RFI seeks comments on the regulations related to exemptions for executive, administrative, professional, outside sales, and computer employees and can be found at:

https://www.federalregister.gov/documents/2017/07/26/2017-15666/request-for-information-defining-and-delimiting-the-exemptions-for-executive-administrative

One question in the RFI struck me as particularly interesting and potentially game changing:

Question 7: Would a test for exemption that relies solely on the duties performed by the employee without regard to the amount of salary paid by the employer be preferable to the current standard test? If so, what elements would be necessary in a duties-only test and would examination of the amount of non-exempt work performed be required?

This question suggests that the DOL is seriously considering the abolishment of the salary-basis test in favor of classifying employees as exempt from overtime based solely on the type of work they perform. The history-geek in me finds this fascinating because a minimum “salary” for white-collar professionals has been required since 1938 without substantial challenge.

In fact, only recently did the DOL create an uproar when it sought to increase the salary threshold from $455/week to $913/week effective December 1, 2016. On the eve of that effective date, however, a federal judge enjoined the enforcement of the increased salary threshold. The DOL quickly appealed. Interestingly, the DOL acknowledged in its brief that it no longer seeks to enforce the salary threshold increase and insisted that the salary-basis test is valid. If you are unfamiliar with this litigation, please check out:

https://www.nytimes.com/2016/11/22/business/obama-rule-to-expand-overtime-eligibility-is-suspended-by-judge.html.

Yet now – because the story needs another twist – the DOL has issued an RFI that questions whether a salary-basis test even makes sense. What does this all mean? In short, the DOL is reconsidering fundamentals of overtime exemption regulations.

And the DOL is correct to rethink this issue. Whether someone earns money on an hourly, daily, or weekly basis has no economic significance. Instead, an exemption from overtime should be based on a minimum annual income test adjusted periodically based on a formula driven by published data from the Congressional Budget Office. Thus, the DOL should abolish the salary-basis test in favor of something more akin to a requirement that the FLSA exemption be governed by a minimum guaranteed annual compensation. I leave it to economists to set that figure, but I am pleased to see the government rethink the issue.

 

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LESSONS FROM LITTLE LEAGUE

Posted on February 27, 2018 in Consulting

I confess.  Spring is my favorite time of year because I am obsessed with little league baseball. My son surpassed my athletic talents when he turned five, and I live vicariously through him. From our years together on the field, I have learned three wise lessons that translate to the workplace: (1) think team; (2) play your position; and (3) no crying in baseball.

Think Team

Success on the baseball field is a team effort, which requires individual sacrifices for the team’s success.  Consider an analogy that every parent-coach can appreciate: we would like our kid to be the superstar, but every kid likes to win.  I love – and that is the correct descriptive verb – helping my son’s teammates improve their batting.  Sure, my ego may take a hit when I successfully help another kid perform better at the plate and move ahead of my son in the batting order. But there are no Ws for individuals in baseball; only a team wins.

The same is true in the workplace.  An intelligent boss should mentor employees by teaching them everything he or she knows. Such mentorship will ensure that the company’s customers and clients are provided the highest degree of service, which helps the business succeed in the long run. Yet such mentorship is often a frightening thought for a lot of managers who worry that employees might outperform them. As a result, too often bosses restrict their employees’ access to information and clients in order to stay at the top. The consequence of selfish behavior, however, is that the business and its customers both suffer.

I challenge everyone to pursue the power of the team rather than personal gain.

Play your Position

Everyone on a baseball team has a roll to play.  When the kids are little, they think being sent to the outfield is punishment.  But as they get older, they grasp that the ball can go anywhere at any time and that everyone has a job to perform.   Individual skill sets and inherent talents matter too.  It took me some time to understand why left handers (who cannot pitch) need to play first base or the outfield.  My son is a scrappy (read short) second baseman who should not be expected to play first base where height is a benefit.

The translation to the workplace is obvious.  Let individuals play their best position based on their inherent talents.  Challenging workers to perform tasks not best suited for their skill set makes little sense.  It can only result in frustration, resentment, and eventual departure.   The same goes for employee evaluations.  Why evaluate employees on broad criteria that picks at a person’s known weaknesses?   Give employees the opportunity to experience wins by playing their best position.

No Crying

There is, of course, a fair bit of crying in little league baseball.  It fades over time, but emotions can run rampant.  I have found that the most emotional players are often the most talented athletes.  With zero psychiatric training, my rationale is simplistic but accurate: they expect to always perform great and are frustrated by any lack of perfection.  When the higher performers lose control, they drag down the team.

We see this so often at work.  The type “A” boss can frustrate quickly with adversity.  Personally, I try very hard to emulate the traits of my calm and confident law partners who seem unfazed with adversity.  The best bosses control their emotions and are slow to react so as to ensure that their response is collected and respectful.

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Planning for 2018: What to Continue Doing, Start Doing, and Stop Doing

Posted on January 4, 2018 in Consulting

As we enter the new year, I expect many of you  plan to set new goals and resolutions. I know that I do. In fact, with the help of an executive coach that I have worked with for several years, I typically spend the holidays reflecting on the past and planning my future in what I like to call my Continue, Start, and Stop exercise. With this exercise in mind, here are my recommendations for what employers should continue, start, and stop  doing in 2018.

Sexual Harassment Training

2017 was the year of scandalous, high-profile incidents of sexual harassment. Example after example unfolded where women accused politicians as well as  Hollywood executives and actors of harass and abuse. With so much attention on gender discrimination, it would be unwise for employers not to make 2018 the year of education and prevention on this widespread problem. Invest in a qualified trainer to come onsite rather than assuming that videos and computer guided programs will be sufficient educational tools. Make sure that the top brass is present and engaged throughout the training process. This will ensure that every member of the team is educated on this subject. Finally, dedicate time to allow for thoughtful discussions.

Conduct a Wage and Hour Checkup

The Fair Labor Standards Act passed in 1938. Still, nothing so simple is more often violated. I applaud the small group of employers who routinely examine their pay practices and encourage them to continue. Most of those reading this newsletter, however, most likely do not routinely examine their pay practices. I suggest joining the minority and starting a fresh habit of annually reviewing pay practices to ensure FLSA compliance. Be smart about it. Remember that making changes in timekeeping and pay practices may spur employees to question if a change means they were previously denied some right. Thus, it is very important to work with an attorney before implementing any significant modifications in payroll policies.

Develop a Bonus Strategy

At first, AT&T impressed me with its announcement of $1,000 bonuses for 200,000 workers following the new tax law. My defense-lawyer mindset kicked in later, however, and I thought: two hundred million dollars awarded without regard to merit? Does that make sense? Seems to me that it would have been more logical to combine the money into a bonus pool and reward employees under a merit-based system.

Yet AT&T’s approach is a typical model for many businesses. Employers too often award bonuses based on a pro-rata allotment that is considered “fair”. I suggest that these employers stop this practice, and instead start a better bonus system such as publishing criteria based off quantifiable metrics to reward employees and develop a more positive corporate culture.

Please let me know if we can assist you in implementing these ideas.

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Holiday Party Rules

Posted on December 15, 2017 in Consulting

This week, WKPZ held its annual firm luncheon.  Our holiday celebration is a very nice and — I must confess — extraordinarily tame event.   But others would say that tame translates to “lame” as there is one obvious thing missing at our luncheon:  booze.   I should also admit that I am a social drinker, and please, those who really know me need not comment further.  Thus, I cast no dispersions on companies who gather and have fun with alcohol included.  But let me suggest some simple holiday party rules.

Rule One: Uber

Everyone who plans to drink at their holiday event should be compelled to use Uber (or a taxi)… without exception. Companies should not pretend to know when someone is safe to drive home.   We lack the expertise.  Instead, make the rule absolute:  you drink, you Uber.  It’s simple and effective.  Doing otherwise is irresponsible and potentially dangerous.  Consider a NYT article that reported a 25-35% decline in DUI related accidents in the New York boroughs after Uber arrived. Closer to home, Austin (Texas) experienced a sizable increase in DUI arrests after its battles with ride sharing programs led Uber (and Lyft) to leave our liberal capital.

Rule Two: Eliminate the After Party

Rule One and Rule Two fail miserably if someone instigates the “after party”.  That someone should never be management.  We cannot stop co-workers from having fun by extending a party beyond the Company’s intentions.   However, no one in management should initiate (and by no means) attend the “after party”.

Rule Three: Have a Good Cop

A responsible person in authority needs to be the designated good cop.  This person walks around the party watching for any individuals who have forgotten the rules, had too much to drink, or just suddenly felt amorous about their co-worker.  Yes, it turns out alcohol sometimes leads to flirtations and uninhibited courage.  The Good Cop takes one for the team and abstains from alcohol.  And, most important, the Good Cop makes sure Rule One and Two are enforced.

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Employer Assistance for Victims of Hurricane Harvey

Posted on September 4, 2017 in Consulting

By Frank Sommerville, John Reyna, and Mark Levine

 

 

Everyone in our community is reaching out to friends, neighbors, and even strangers, to assist in the wake of Hurricane Harvey.  There is something for employers to contribute as well.  Employers should consider Internal Revenue Code Section 139 for a tax-free means of providing reimbursement of reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster.

 

The process is relatively easy.  The employer must secure an application from the employee. The only dollar limit is that the payment must be reasonable to cover the employee’s uninsured losses.  The employee does not need to account to the employer for the use of the funds. Thus, the employer has no follow-up obligations.

 

Frank Sommerville and John Reyna have drafted a sample application and published it on our firm website.   You may also email us for a copy of the application.   Frank practices before the United States Tax Court.  John recently joined the firm after completing his LLM in Tax.  (See right column.)  Frank and John work in our Arlington, Texas office.  We thank them for preparing and publishing this application.  They are happy to answer questions of employers seeking to implemented disaster relief assistance.

We at WKPZ hope for a speedy recovery for our city and state.

 

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DOL Game Changer

Posted on July 31, 2017 in Consulting

The stability and predictability of 78 years of wage and hour law has been in flux over the past year, and things got really interesting just last week. On Wednesday, July 26, 2017, the Department of Labor issued a Request for Information (“RFI”) that suggests the government might – I stress might – rework the fundamentals of wage and hour law. The RFI seeks comments on the regulations related to exemptions for executive, administrative, professional, outside sales, and computer employees and can be found at:

https://www.federalregister.gov/documents/2017/07/26/2017-15666/request-for-information-defining-and-delimiting-the-exemptions-for-executive-administrative

One question in the RFI struck me as particularly interesting and potentially game changing:

Question 7: Would a test for exemption that relies solely on the duties performed by the employee without regard to the amount of salary paid by the employer be preferable to the current standard test? If so, what elements would be necessary in a duties-only test and would examination of the amount of non-exempt work performed be required?

This question suggests that the DOL is seriously considering the abolishment of the salary-basis test in favor of classifying employees as exempt from overtime based solely on the type of work they perform. The history-geek in me finds this fascinating because a minimum “salary” for white-collar professionals has been required since 1938 without substantial challenge.

In fact, only recently did the DOL create an uproar when it sought to increase the salary threshold from $455/week to $913/week effective December 1, 2016. On the eve of that effective date, however, a federal judge enjoined the enforcement of the increased salary threshold. The DOL quickly appealed. Interestingly, the DOL acknowledged in its brief that it no longer seeks to enforce the salary threshold increase and insisted that the salary-basis test is valid. If you are unfamiliar with this litigation, please check out:

https://www.nytimes.com/2016/11/22/business/obama-rule-to-expand-overtime-eligibility-is-suspended-by-judge.html.

Yet now – because the story needs another twist – the DOL has issued an RFI that questions whether a salary-basis test even makes sense. What does this all mean? In short, the DOL is reconsidering fundamentals of overtime exemption regulations.

And the DOL is correct to rethink this issue. Whether someone earns money on an hourly, daily, or weekly basis has no economic significance. Instead, an exemption from overtime should be based on a minimum annual income test adjusted periodically based on a formula driven by published data from the Congressional Budget Office. Thus, the DOL should abolish the salary-basis test in favor of something more akin to a requirement that the FLSA exemption be governed by a minimum guaranteed annual compensation. I leave it to economists to set that figure, but I am pleased to see the government rethink the issue.

 

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Vacation Policies 101

Posted on May 31, 2017 in Consulting

 

I love my work, but vacations even more.  I soon leave for summer vacation — a trip looking at colleges and then an escape with the wife sans children.  Before I take my much needed break, I decided to offer some tips on employer vacation policies. Or, as I note first, let’s consider calling it paid time off.

Tip One: Strongly consider Paid Time Off rather than vacation or sick time

Many employers offer paid vacation and paid sick leave as distinct benefits.  In this context, employees use vacation for rest and relaxation and sick leave for medical needs.  But we all know they get jumbled.  An employee wanting an extra day off may end up ill just before a planned vacation. Employees abusing sick leave for additional time off is an irritation to management and is a complete annoyance to HR.

Paid-time off evolved as a means of stopping the policing of sick leave.  PTO bundles sick and vacation time to eliminate the need to monitor time away.  With PTO we dispense with the obligatory doctor’s note every time someone has a bad cold or a stomach bug, based on policy.  PTO policies may also eliminate fake illnesses as the reason for the time off as it requires no explanation.  Some employees judge this to be more fair since healthy workers get as much time as workers who get sick more often.

Tip Two: Never “loan” PTO or vacation time

I have never understood why an employer would grant an employee PTO in excess of what is stated in a policy.  The “loan” is a request to violate policy.  Good employees never ask employers to break the rules.   Additionally, the “loan” establishes a new standard that all employees could claim and, if not granted, might create fodder for discrimination claims.   Keep it simple: stick to the policy and never advance additional PTO (or vacation time).

Tip Three: Cap PTO Roll Over

Allowing employees to roll their unused PTO (or vacation) into the next calendar year is bad for business.   The banked time can create a sizable liability on the balance sheet.  Also, large amounts of accumulated leave may make it difficult to manage the time off when an employee wants to uses it in long increments.  Most important, good employees need to be rewarded with time off and encouraged (perhaps forced) to use their annual PTO entitlement or risk forfeiting it.

I hope you all enjoy your summer vacations and that you encourage your colleagues to do the same.

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Picking Bad Fights

Posted on April 26, 2017 in Consulting

Employers often spur challenging litigation or government investigations by picking a fight with a former employee over an unworthy issue.   The fight might involve an employee taking something that does not belong to them and typically not of any real value (e.g., a uniform or some small company tool).  Similarly, a business may feel compelled to send a cease and desist letter with no intention of filing suit to enforce the non-compete the employee signed.  Perhaps the most common dispute relates to docking an employee’s final paycheck and soon thereafter the DOL appears for a random audit or OSHA shows up for an inspection.

Today I write to discuss some tips employers should consider before they send a letter that spurs a former employee to pursue a claim in court or with a government agency.

Call the Lawyer First

If your thinking this advice results in more work for me and obvious self-promotion, not true.  In reality, I have for twenty plus years frequently persuaded clients to make choices that avoid litigation and decrease legal fees. A 30 minute conversation with your attorney can generally pinpoint the concerns that might warrant an employer backing off a petty issue to avoid a real fight.

Know Your Exposure

Nearly every DOL audit, and subsequent review of overtime obligations, comes from an anonymous phone call to the DOL from a disgruntled former employee.  The DOL never pays any attention to the integrity of the caller.  The government could not care less that the employee, by way of example, was smoking marijuana while driving or stole from the company.  (Both are true stories.)  Thus, an employer needs to think about whether it is prepared to open its time records and payroll before launching into a controversy against an angry former employee.

Likewise, many EEOC Charges of Discrimination stem from fights employers start.  One extreme example proves my point.   A client forwarded an EEOC Charge with allegations of sexual misconduct so detailed that I was embarrassed to have it lying on my desk.  The Charge was filed long after the employee quit and within 30 days of the company sending her a letter informing her that she should not be in communication with clients of her former employer.  The company was not intending to fight the non-solicitation of clients provision and only wanted to scare the woman away from competing.  It did not bode well for the employer.

Assess the Potential Gain

Employers need to know what they want to achieve and be committed to the position before they start a battle with a former employee.  Having the last word or trying to send a message is rarely a worthy purpose.   The business should assess the real cost of the fight and be willing to engage in the war, not the battle.

The Lesson:  slow down and think before you poke a former employee.

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NEW YEAR: BACK TO BASICS

Posted on January 5, 2017 in Consulting

Uncertainty surrounds the wide ranging changes President-elect Trump has promised that are certain to impact employers.   Time will tell which campaign pledges come to fruition that impact the workplace. Whatever those changes may be will not, however, have a dramatic affect on employment-related litigation. Instead, employer will avoid the courthouse when they focus on strong fundamentals no matter who sits in the Oval Office Here are some basics all employers should focus on in 2017.

 

Effective Communication

 

My first news letter in October 2010 (http://www.employment-matters.com/consulting/better-communication-in-the-workplace-2/) argued that effective communication avoids workplace issues from becoming employment claims.  That will always be true.  Effective communication is direct, honest, and conveys a clear message.  Anything short of this leaves the employee questioning the bosses intentions and motivations.

 

I was reminded of this recently at a lunch with a lawyer-litigator friend who asked whether I thought an employer should tell someone the reason for termination in an exit interview.  Many people (really smart people too) hold tight to the premise that at-will employment means an employer never owes a person a reason for losing their job.  While that is true, an employee who does not hear the rationale for termination will draw their own conclusions and might lean toward conspiracy theories or illegal ulterior motives.

 

I highly recommend employers communicate effectively and provide a clear, concise explanation for termination.  It may be harsh but there is no substitute for the truth.

 

Read your Policies

 

Hypocrisy emerges most often when HR folks fail to achieve their own understanding of the company’s policies.  Managers must also know company policies.  Unfortunately, too little attention is placed on studying policies.  We assume that people will take the time to read the handbook and other pertinent policies.

 

Take some time this month to read those policies, and while doing so, look for and propose needed changes.  Also, borrow a lesson from our colleagues who handle HS&E and learn from the example of “tail gate” meetings.  Before work begins the crew talks about the task at hand, the environment, and the safety protocol.

 

Too bad the work day does not begin with “the policy of the day.”  Perhaps it should.

 

Be Accessible

 

All good legal work starts with an attentive lawyer who listens to the facts with an open mind to help clients achieve the best possible results.  Good HR begins with the same approach.

 

The ideal HR department will be available and approachable creating an environment that welcomes a person seeking to make a good faith complaint.  Likewise, HR needs to create an environment that encourages management to seek their guidance.  A few easy rules for HR personnel:

 

  • Avoid the appearance of favoritism.  For example, eat lunch with a diversity of people;

 

  • Keep your door open;

 

  • Speak in positive terms.  Avoid such terms as: “You can’t do that.”  Think: “How can I help”.

I wish you the best in the new year and hope to see you at my upcoming Lunch & Learn.

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