Posts Tagged ‘labor issues’

Two Key Considerations When Performing Background Checks

Thursday, June 16th, 2011

When people fib about their work history, educational degree, job titles or salaries, criminal background and substance abuse habits – the top five lies told by job candidates – the results can be devastating for a company to have these individuals on staff. Performing a strong background check to weed out violent and dishonest candidates is essential if a firm is to work at top efficiency. In fact, one study estimates that the resultant annual ROI for using background screening to prevent business losses is more than 900 percent.

Potential employees can omit details that hide facts that can be difficult to uncover. To make sure your background checks are as thorough as possible, consider the following suggestions:

Hire a professional background checking company, also known as a consumer reporting agency – A CRA can help a business conduct background checks on candidates so that it does not have to devote extra time and resources for this process, plus it helps reduce liability. If you use a CRA, you must follow the federal law and tell the candidate on a document separate from the employment application that you are going to conduct a background check to independently verify the information provided, and the individual must first sign a document authorizing the background check. Turning someone down based on information drawn from a CRA requires that you give the applicant a chance to review the negative information, and possibly dispute the record before you make your final hiring decision. To know what you can and cannot do with a CRA report, review the federal Fair Credit Reporting Act requirements.

Perform searches appropriate for the position – Hiring a CRA is only part of the battle. You must make sure that you are asking for the appropriate research.  You should start with some sort of name and address history search to independently verify the applicant’s basic information.  Then you should search for criminal records based upon the address history for some given “time window” – maybe 7 years.  Other types of searches should be based upon job responsibilities. Check on licensing claims, driving records, education verification, professional  and employment references, Medicaid sanctions, and other registries where needed to ensure that the applicant meets the minimum requirements for the job. Early discoveries can prevent much bigger later headaches if the person is lying.

For additional information on what to consider for background checks, please call Kevin von der Lippe at (919) 878-9222 or (336) 668-7746.

Photo source: showbizsuperstar

Ten Things N.C. Employers Need to Know About Independent Contractors and Joint Employment

Tuesday, December 14th, 2010

Gretchen Ewalt from the Ogletree Deakins law firm shared her expertise on Employee Classification (Employee or Independent Contractor) and Joint Employment at CAI’s October members-only Ask the Expert. Participants left the sessions with a number of recommendations that, if implemented, will limit their organization’s exposure to costly litigation and potential penalties.

Below are some of the points covered in these sessions.

1. Independent Contractor Tests. There are a number of factors considered by the IRS and the USDOL in determining if a worker is an independent contractor or an employee.  A brief description of a true independent contractor is as follows:

  • The employer does not control the means and manner of how a project is performed, only specifying the expectations of the end result.
  • The “contractor” has a viable business concern, having the opportunity to make a profit or suffer a loss, and provides the same services to other employers.
  • The “contractor” absorbs expenses incurred during the project.

2. Penalties for Misclassification. Penalties for misclassifying an employee as an independent contractor include state and federal tax liabilities, as well as back pay for wage and hour overtime violations.

3. Conduct Internal Audits. It is recommended that periodic internal risk analysis audits be conducted to ensure that independent contractors are properly classified.

4. Draft Independent Contractor Agreements. Contracts for independent contractors should be drafted by legal counsel establishing expectations by both parties to clearly show that the independent contractor relationship exists.  Language also needs to be included stating that the contractor waives and relinquishes any rights to the client’s benefit plans and that the contractor agrees to comply with all business/industry standards.

5. Educate Managers and Supervisors. Managers and supervisors should know the difference between an employee and an independent contractor and understand the liabilities incurred due to misclassification.

6. Definition of Joint Employment. A condition where an individual is providing services that jointly benefits two or more employers.

7. Joint Liability. Employers that utilize employees from an outsourcing agency can be held liable along with the agency for complaints filed by those employees with state and federal regulatory bodies.

8. Time Credited for FMLA. The time spent by an outsourcing agency’s employee providing services to a client employer is credited toward FMLA eligibility if that employee is employed as a regular employee by the client employer.

9. Outsourcing Agreements. Agreements with outsourcing agencies should be carefully drafted by legal counsel to ensure that the agency is responsible for taxes, insurance, business licenses and all employment matters, including employee training, disciplinary actions, compensation/benefit programs and maintenance of personnel files.

10. Contract with Reputable Agencies. Make sure that your outsourcing agency complies with all applicable laws and specify such compliance in the outsourcing agreement.  Ensure that their personnel policies/procedures are sound and that their managers are well equipped to effectively deal with agency employee complaints.

If you have questions about employee classification or joint employment, please contact a member of CAI’s Advice and Counsel team at 919-878-9222 or 336-668-7746.

Photo Source: University of Waterlo

Transitioning Returning Military Service Members to the Civilian Workplace

Tuesday, December 7th, 2010

Men and women represent our country every day as they serve in the military on our behalf. They are praised for their courage, loyalty and leadership but often return home to face a new set of hurdles for which they may be ill-prepared. One hurdle involves jobs.

Finding stable, secure civilian employment has been a challenge encountered by returning veterans, military spouses and wounded warriors.

Why is it that serving our country can act as a risk for future employment? The training and discipline military service provides should make any veteran an asset to future organizations. Veterans exude responsibility and professionalism, knowing their role is vital and that they represent something much larger than themselves. The leadership and work ethic they develop through their service are essential skills not easily taught in the workplace.

According to the U.S. Department of Labor, numerous companies recognize the benefit of employing veterans, but though there is an expressed interest, the process has been complex. Organizations have found difficultly both internally and externally. They are unsure where to begin their search, or how to prepare their staff to better accommodate and assimilate veterans into their ranks.

The Department of Labor has taken a proactive role in responding to this growing crisis by establishing an outlet to connect veterans with potential employers. The following six-step process acts as a reference guide for companies seeking veterans to employ and absorb into the company culture.

The Veterans Hiring Toolkit

Design a Strategy for Your Veterans Hiring Initiative – Become familiar with veteran employment by identifying the benefits procedure, the tax incentives and the recruitment and retention process.

Create a Welcoming and Educated Workplace for Veterans – Current employees can better relate to their veteran coworkers if they have a grasp of military culture, experiences and trauma through the proper training and education.

Actively Recruit Veterans, Wounded Warriors and Military Spouses – As with any employee, recognize the specific target audience you are pursuing and how best to reach them.

Hire Qualified Veterans and Learn How to Accommodate Wounded Warriors – With the appropriate orientation plan in place, plan to hire not just any veteran, but the right veteran for the position and for the company.

Promote an Inclusive Workplace to Retain Your Veteran Employees – The needs for recognition and challenge, and the desire to be successful in an organization don’t change for those returning from military service.  Therefore, it’s best to apply the company’s current retention plan across the board.

Keep Helpful Tools and Resources at Your FingertipsEffective and accessible resources can act as one of the strongest assets when hiring and retaining veterans. 

Thousands of military personnel walk away from active duty each year. After all that veterans have sacrificed for us, as a society it is our duty to incorporate them into the civilian workforce and lifestyle to the best of our ability.

For more information on veterans in the workplace, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo source: U.S. Air Force

Seven Things About FMLA and Other Leave Rights that N.C. Employers Need to Know

Thursday, November 25th, 2010

One of the more challenging compliance issues for employers is managing family and medical leave and other leaves of absence, and knowing when to safely terminate employment. Kimberly Korando with Smith Anderson law firm guided CAI members who participated in the recent members-only “Ask the Experts” sessions on the interplay of company leave policies, the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act of 1990 (ADA), the ADA Amendments Act of 2008 (ADAA), and North Carolina’s Retaliatory Employment Discrimination Act (REDA).

Following are some of the practical takeaways from this session:

1. REDA and ADAA have different requirements.

North Carolina’s REDA law allows employers to have a consistent termination policy that applies across the board regarding workers’ compensation leave.  The ADAA requires a case-by-case evaluation when an employee needs extended leave to determine if a reasonable accommodation can be made (consistency is not applicable).

2. Review policy language on FMLA eligibility.

Be sure that your employee-eligibility statement for FMLA includes all of these requirements:  employed for at least 12 months; worked 1,250 hours over the previous 12 months; and works at a worksite with at least 50 employees within 75 miles.  According to Ms. Korando, if the policy leaves out any of the criteria, you may be required by the courts to grant FMLA even if the employee is not eligible.

3. Consider the different requirements of FMLA and ADA on return to work.

FMLA requires an employer to return the employee to the same or an equivalent position.  ADA requires the employee’s return to the original position.  This is extremely important to remember when the employee is covered by both the FMLA and ADA, and the employee returns before the end of the FMLA (unless he or she is unable to perform the original position with or without reasonable accommodation).

4. Document the interactive process.

Court cases provide employers with tips on the court’s expectations of how they should handle the ADA process.  One “nugget” Ms. Korando gleaned was that the courts expect employers to document the interactive process and what was considered and discussed with the employee regarding reasonable accommodation and/or undue hardship.

5.   Check third party vendor letters.

If you have agreements with vendors that stipulate automatic termination of temporary employees if they are unable to work, include the statement unless other action is required by applicable federal or state law. There are joint employment responsibilities under FMLA and ADA.

6.   Indefinite leave is not a reasonable accommodation in North Carolina.
The 4th circuit court has said that it is unreasonable to expect an employer to hold a job or consider other jobs or extended leave when the employee’s doctor states the employee will be on leave indefinitely.  The employee can be terminated if this is the case (after completion of eligible FMLA leave).

7.   End of leave communications.

Communicate with the employee by documenting in writing a summary of the leave dates, type, etc.  Include the last day worked, the dates of FMLA and the date job reinstatement responsibilities ended, extended leave or other reasonable accommodations made, and the date of termination.

If you have questions about FMLA or other leave rights, please call a member of CAI’s Advice and Counsel team at 919-878-9222 or 336-668-7746.

Photo Source: Michael

Top 5 Ways to Recognize a Disgruntled Employee

Thursday, November 18th, 2010

Everyone has seen or experienced a time of dissatisfaction at some point in their career – moments of questioning yourself, your role and your long-term position within the company. These fleeting moments are understandable, and are often expected. The problem is when the feelings linger and last longer than they should, and turn into a permanent state of mind.

Disgruntled employees can be seen as a lost opportunity for an organization. At some point, employees can become so frustrated that there seems to be no solution in sight. After taking the time to train, nurture and build employees into valued assets, the last thing any company wants is to have them walk out.

By recognizing displeased employees in advance, these problems can be avoided in the future. Consider the following signs as indicators of possible employee frustration:

Lack of motivation

For employees who once expressed a deep passion and drive for their roles, their company and their industry, a red flag should be raised when their enthusiasm and zeal have decreased. When employees stop trying and no longer give their best, it’s an obvious sign of discontent.

A breakdown of communication

If employees express their concerns but those feelings fall on deaf ears, there will always be a feeling of defeat. That lack of support can transition employees into shutting down, becoming distant and keeping their concerns to themselves, and the silence can be deadly.

A decline in employee performance

Are your employees’ results poor in comparison to the work they have produced in the past? A lack of pride and poor performance can be a sign of defeat, not just laziness. If people don’t feel their voices are being heard, or their growth is static, they may feel the extra effort is not worth it.

Responses from private employee surveys

These evaluations allow employees to speak openly and honestly about their personal and professional feelings towards management staff. By utilizing an anonymous tool like private surveys, companies can shed light on the true concerns internally because of the lack of judgment.

Communication between management and employees

Through regular employee discussions, updates and reviews, management can stay in tune with all staff members. This form of constant communication helps monitor and put a cap on in-house problems. Continuous discussion is probably one of the most effective ways to manage and prevent frustration from building up.

Communicate before it’s too late. Keep your eyes open. Don’t become complacent. Recognize that an essential role you play as part of the management team is to listen. Listen to what is being said, and what is not. You can avoid a percentage of the problems just by making yourself more aware of the day-to-day activities, emotions and actions that take place with your employees.

For information on how to prevent employees from becoming disgruntled or on how to turn around already disgruntled employees, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo source: Peter Alfred

Importance of Background Checks Continues to Rise

Tuesday, November 16th, 2010

A recent survey of more than 600 HR professionals by EmployeeScreenIQ reveals that employers are emphasizing the need for pre-hire background checks more than they ever have.

Specifically, 70 percent of those surveyed reported that background screening has become more important in recent years because of a strong desire to reduce the risk of making a costly hiring mistake, changes in government regulations and fears that the poor economy will tempt candidates to falsify their documentation in order to obtain a position. A large majority of the companies surveyed (92 percent) regularly conduct background checks.

Although there are many different types of screening services, the list below includes the checks deemed as mandatory by the survey participants. Those responding indicated these services are used on all jobs within their organization:

  • County Criminal Records Checks:     73%
  • Employment Verifications:                 68%
  • National Criminal Record Database:  60%
  • Substance Abuse Screening:               49%
  • Education Verifications:                     42%
  • E-Verify (Federal Government):        32%.

Three other trends were identified from the survey results:

  1. The percentage of employers who mandate background screening will continue to grow, as a third of those surveyed who did not currently conduct checks indicated they plan to do so within the next six months.
  2. Credit screening is on the decline, used by only 15 percent of those surveyed.  The economy has created many credit problems for candidates, and credit worthiness is often not criteria for job performance and may be alleged to be a discriminatory selection practice under EEO laws.
  3. A majority of employers felt social networking sites did not provide useful information that could be used in employee screening.

Organizations that are utilizing backgrounds checks to screen candidates need to ensure that they are conducting high quality checks or are using a high quality third party to conduct the checks on their behalf. CAI offers Background Checking services to help you uncover everything you need to know about your employment candidates.  For more information, go to or call us at 919-878-9222 or 336-668-7746.

Photo Source: Klearchos Guide to the Galaxy

Emergency Action Plans: Three Reasons Why Your Company Should Have One

Thursday, October 21st, 2010

An Emergency Action Plan, or EAP, is required by OSHA standards to facilitate and organize employer and employee actions during workplace emergencies. According to OSHA guidelines, an EAP should include at minimum the following:

  • Procedures for reporting a fire or other emergency;
  • Procedures for emergency evacuation, including type of evacuation and exit route assignments;
  • Procedures to be followed by employees who remain to operate critical plant operations before they evacuate;
  • Procedures to account for all employees after evacuation;
  • Procedures to be followed by employees performing rescue or medical duties; and
  • The name or job title of every employee who may be contacted by employees who need more information about the plan or an explanation of their duties under the plan.

Companies with 10 or fewer employees do not have to write their plan out. However, in all situations, it is recommended that drills occur so that employees know where to go and what to do during a calamity.

There are three key reasons your company needs to set up an EAP beside the OSHA requirements:

1)     It enhances your company’s ability to recover from financial losses, damages to equipment or products or business interruption. For example, if all of your employees know how to operate a fire extinguisher properly, they can stop a flame from becoming an inferno that can burn up part or all of your building.

2)     It bonds management and employees by having them share responsibilities in the plan. Assigning duties such as who will be in charge of leading the safe evacuation empowers employees, and meeting to discuss modifications in the EAP as needed makes them stakeholders in the company’s activities.

3)     It establishes favorable relationships with law enforcement leaders and firefighters who know you have an EAP and have communicated well the details of it with your employees. Think of the number of times you have seen a disaster happen at a business and news coverage has included a sound bite of an official saying it was obvious the company was not prepared for what occurred. That scenario can be prevented with you being proactive in setting up your EAP.

For additional information on emergency action plans and how they can benefit you and your company, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: Chris Violet

Five Things Employers Need to Know about Immigration Law and I-9’s

Thursday, October 14th, 2010

Bernhard Mueller, immigration attorney with the Ogletree Deakins Law Firm, presented his “Immigration Law and I-9 Update” to CAI Members at our free, August, members-only Ask the Expert programs.

Here are some of the key points Mueller made during these sessions:

1. Employers who have constructive knowledge that an employee is not authorized to work, but nonetheless continue to allow the employee to work, are subject to fines. Examples of constructive knowledge are:

a. failure to complete an I-9 form for an employee

b. failure of the employer to ensure that Section 1 is properly completed and signed

c. failure of the employer to sign the I-9

d. failure to re-verify employment authorization after it expires

e. inconsistencies, such as an employee who checked the Permanent Resident box in Section 1 but subsequently asks the employer to sponsor him/her

2. Although employers are not required to do I-9’s for contractors, they have a duty to ensure to the best of their ability that contractors are legally authorized to work. The recommended practice is to include the following in the contracting agreement:

a. a statement that your company is committed to compliance with all federal and state employment laws, including hiring only employees authorized to work in the United States, and that you expect the contractor to comply as well

b. that you reserve the right to inspect the I-9’s of contracted workers that are supplied to you at any time

c. an indemnification clause

3. Employers who hire out-of-state employees (sales employees, construction, etc.) where there is no company representative to handle the I-9 process may contract with someone to complete I-9’s on their behalf, such as a notary public. (Note: Texas does not allow notaries to perform this service.) The employer should ensure that the contractor is knowledgeable of the legal requirements and appropriate procedures for I-9 completion since the employer is ultimately responsible.

4. The I-9 form cannot be completed until a job offer is made and accepted. Because the I-9 requires date of birth and identifies whether the person is a U.S. citizen or alien, it could be a source of potential discrimination charges if an applicant were required to complete it pre-offer and then not hired.

5. It is fraud if someone other than the employee fills in Section 1 but does not provide the required information and a signature in the Preparer and/or Translator Certification box, or if HR or a company representative fills in missing information in Section 1 for the employee.

If you have questions about immigration law and I-9s, please call a member of CAI’s Advice and Counsel team at 919-878-9222 or 336-668-7746.

Photo Source: O. Cosma

How to Avoid Employee Lawsuits

Tuesday, October 5th, 2010

While the 2010 numbers will not be available until early 2011, Jury Verdict Research reported that the median award for all employment-related claims in 2009 ($326,640) was 60 percent more than it was in 2008.

In addition it’s widely expected that the number of employee lawsuits will continue to increase, in part due to the recession.  Another contributor to that increase is the growing presence of attorneys who specialize in filing lawsuits for employees with grievances against employers, and not just claims regarding hiring/firing practices, but also charges of discrimination, defamation and several other issues.

An employee lawsuit can deplete your time and money when those resources should be better spent. It also can result in substantial damages to your business should you lose the suit.

To minimize the likelihood of an employee lawsuit happening in the first place, take the following actions:

1)     Treat all employees with fairness, dignity and respect. Create an atmosphere of positive employee-employer relations.

2)     Have signed documentation from the employee that he or she has read the employee handbook and agrees to follow it. The handbook should include an antidiscrimination and harassment policy as well.

3)     Communicate company policies on a continual basis. Do not just give employees a handbook and never address the policies again.

4)     Put safety standards into place and make sure employees know they exist. The N.C. Department of Labor has a guide explaining how OSHA standards work in the state and what employers can do to comply with them.

5)     Train your managers on workplace laws. Make sure they are aware of the many laws that apply to the workplace and that they follow them stringently.

6)     Consistently enforce company policies. Do not let some employees slide while disciplining others for the same violation.

7)     Document the progressive disciplinary process. Notify the employee in each case about what they did wrong along with filing this information securely.

Even if you follow all seven steps above you may still be sued by an employee.  You may want to check with your insurance carrier to see if they offer employment practice liability insurance. More insurers are offering this benefit. Details on what a plan can cover can be found at the Insurance Information Institute website.

For additional information on how to avoid employee lawsuits, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: U.S. Department of Defense

Better Performance Management Starts with Better Hiring Decisions

Monday, July 12th, 2010

When people ask for guidance on designing their performance management programs, the main area of focus is invariably the employee evaluation process.  The question that seems to be on most people’s minds is, “What is the best way to design an effective evaluation form?”    While it is important to have an effective measurement instrument with which to evaluate your employees’ performance, it is only one part of a system for ensuring your organization hires, trains and keeps the best employees possible.  We should also spend time examining the hiring and selection process.

Hiring decisions are, in effect, problems.  By this, I mean you are making a decision with limited information involving doubt or uncertainty.  The best way to make a decision is to limit the amount of uncertainty involved in the process.  Through the use of applications, résumés, recommendations and interviews, you are hoping to decrease the uncertainty in the process and increase the probability that the choice you make will be the correct one.

However, we frequently make mistakes.  It is possible that we pass on a good applicant or hire a bad one.  These mistakes are bound to happen; we are not perfect.  A way to reduce the chance of error is to make a better system for collecting information for the hiring process—not just from the traditional means mentioned previously.

What may be the most important part of the entire performance management process is what can best be described as the control mechanism for the system.  Every organization has control systems that measure such things as defects, scarp, employee attendance, etc.   How many organizations have instituted a means to measure the effectiveness of their performance management systems?

When employees leave, some organizations do employee exit surveys.  But, how does that information serve the organization?  You know why they left, but how does that information help you improve the process?

Ideally, you would want to know information that would help you make better hiring decisions in the future.  Use turnover as a chance to collect information and diagnose where mistakes were made in the process.

When conducting the “autopsy” after an employee leaves the organization, some things to consider are:

  • Do you have a true understanding of what the job entails?
  • Are the job requirements— the knowledge, skills and abilities to do the job effectively—accurate?
  • Can you identify the mismatch between the applicant and the job?
  • Do we have the right people involved in the hiring process and making the final decisions?
  • What information may have led you to hiring that person in the first place?  Do we have any organizational biases in the hiring process?  (Educational level, for instance)

Effective managers and supervisors recognize that failure oftentimes can be useful in helping improve performance.  Use the information you collect from your “failures” to improve your hiring process.  Continuous improvement relies heavily on feedback, and this should apply to your hiring process as well.

Photo Source: J Wynia