Month: March 2015

How Soon Can I Fire Her?

Another update from the Jungle…
image013Gretchen and Sam started their business on a shoestring budget and built the company up to a point where they now have more than 50 employees. The employees work well together and cover for each other during lunches, vacations, or sickness; whatever it takes to keep their clients happy. It’s a real team effort and it’s paid off financially for everyone.

That is…until Liza was hired as the receptionist. Liza was told at her date of hire that she would be trained on other office procedures so that she could help cover for other employees when they are absent from office. But it turns out that everyone is covering for Liza.

Liza has a malady a week, mysterious illnesses that means she misses a lot of work. The other employees are beginning to openly complain about the extra work caused by Liza’s absences and inattention when she is at work.

Gretchen just completed a review of the past quarter’s attendance records and is shocked by what she sees. She wants to fire Liza immediately based on poor attendance. Then she realizes there is no record in Liza’s employee file showing that Liza has been warned of the consequences of poor attendance.

What should Gretchen do next?

  1. She could fire Liza immediately and hope that Liza won’t hire an attorney to sue alleging wrongful termination.
  2. She could offer Liza a severance package in exchange for leaving immediately. She’ll need an attorney’s help to draft the severance agreement which would include a waiver of any claims related to the termination.
  3. She could set up a meeting with Liza to review attendance policies, give a “final” warning and wait to see if Liza improves (or not).

Does this situation sound familiar? The above scenario is a composite of several actual situations faced by clients. If your company has faced this issue, you know that each option has pros and cons. Corporate Compliance Risk Advisor can help your company create HR policies and procedures to limit similar problems in the future.

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Classifying An Evolving Workforce.

Another update from the HR jungle…
image010Tom owns a construction business doing renovations and remodels. In the early days he classified all his workers as independent contractors. All the workers had years of experience, brought their own tools and Tom mostly just matched a worker with a homeowner. The worker did the job and Tom billed the homeowner.

As the years have gone by and his revenue has increased, Tom rented warehouse space with an office and storage space for equipment and supplies. The business now owns most of the tools and equipment used on the job, some of it donated by older workers who retired.

Tom also switched from experienced workers (too many retired on him) to hiring inexperienced workers. He pairs the young workers with an experienced older worker for training purposes. The younger workers generally use the tools and equipment owned by the business. All this means is that Tom is beginning to wonder if his old independent contractor classification still fits his workforce.

What are Tom’s options?

  1. He can continue classifying his workers as independent contractors and hope for the best.
  2. He can hire an HR consultant to help him do some general review of the IRS and DOL criteria for differentiating independent contractors (1099’s) from employees (W-2’s). Sometimes the facts make it obvious which classification applies.
  3. He can retain an employment law attorney to provide a legal opinion on whether his workforce consists of 1099’s or W-2’s if the facts are unclear and he wants added assurance of his legal obligations.

The above scenario is a composite of several actual situations faced by prospective and actual clients. In those situations, the prospective client chose the first option and the clients chose the second option. I recommended that one of the clients move directly to the third option and they retained an attorney. If your company is struggling with this issue, Corporate Compliance Risk Advisor may be able to help.

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Avoidance Is Not Compliance.

Another update from the HR jungle…. 
image005Bob runs a company that has 31 full-time employees, 40 part-time employees and a couple of independent contractors. He knew he didn’t have 50 full-time employees so he thought he didn’t need to worry about the Affordable Care Act (ACA).

Recently Bob attended a Chamber of Commerce meeting where he bumped into Sam, a health insurance broker. Bob pretended to listen to Sam while he watched the room for people he really wanted to talk to. Then he realized Sam was saying something about counting part-time employees as full-time equivalents to reach a final head count on the 50 employee line between small and large employers.

Bob didn’t want to admit he hadn’t been paying attention so he nodded wisely at Sam. Later that day Bob did a quick internet search on the ACA and what he learned was disconcerting. He realized that his company is mostly like a large employer subject to the employer penalty which began on January 1, 2015 and he hasn’t done anything to comply with the ACA.

What are Bob’s options?

  1. He can panic, drink some Tennessee sour mash to soothe his nerves, and then forget about the whole mess until a later date when the matter is truly urgent.
  2. He can continue researching to find answers on what he needs to do, although that cuts in to his already limited free time.
  3. He can ask a trusted friend for a referral to someone who can guide him through the ACA compliance maze, which will simultaneously remove the problem from his desk freeing up his time.

In the actual case, my client chose the third option which is how I learned of his predicament. Within three weeks of the initial consultation we had implemented an ACA compliance plan and my client could focus on other issues. If your company is struggling with this issue, Corporate Compliance Risk Advisor can help you mitigate your risks through an ACA compliance program that is appropriate for your company’s size.

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Sex & the Business Woman.

Another update from the HR jungle….

Julie is a woman of a certain age. She steadily climbed the corporate ladder until she reached the C suite. She likes her job but it’s all gone a bit flat lately since she attained the goal she set years ago. She feels entitled to reward herself for all the hard work.

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A few months ago, Julie met Javier at a business networking event. He’s a young man with gleaming teeth, a good body and he laughs at all her jokes. She tells her husband that she has to work late and then skips off to meet Javier.

Julie pays for their dates since her income is considerably higher than his. But sex on the side costs a lot of money, so Julie resorts to padding her business expense account and sometimes uses her company credit card for personal expenses.

Now Julie has been served with divorce papers by her angry and vengeful soon-to-be ex-husband. At the same time, Julie is trying to convince her employer to allow her to reimburse the company rather than face termination for cause with a possible criminal charge for theft. Worst of all: Javier won’t return her phone calls.

What could the company have done to avoid this employee theft?

  1. The company could change how it reimburses expenses of senior executives, requiring more documentation or oversight.
  2. The company could set tighter limits on the use of company credit cards, such as a maximum dollar limit per day.
  3. The company could do more random internal audits of company expenses to spot patterns of fraud earlier.

Julie resorted to employee theft to cover the cost of her love life. She engaged in the fifth motivation for employee dishonesty which is to pay for a boy toy or mistress.

All employee theft comes down to one of the following five motivations: (1) greed, (2) revenge, (3) gambling habit, (4) drug or alcohol habit and (5) having a boy toy or mistress. If your company is struggling with this issue, Corporate Compliance Risk Advisor can help you create internal controls and HR policies that mitigate your risk.

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