Low Hanging Fruit

Another update from the Jungle….

Jack owns a small business which provides him with a good living. He owns a big h2ouse with a giant mortgage and he drives an Escalade.  When he goes to the store, he parks in a handicap parking spot near the door so that everyone can see his ride.

Jack once worked for a major corporation where the HR director constantly nagged him about petty rules that he’d supposedly broken. After a few years of her nagging, Jack decided to be successful on his own.

Jack thinks his company runs smoother with fewer written rules so he doesn’t have any written HR policies. He also pays everyone a “salary” so he doesn’t have to track time and attendance.  But he docks the pay of employees who show up late or miss work. His CPA, Susie, wants him to create job descriptions to distinguish between non-exempt and exempt employees.   Jack tells her not to worry about it; he will tell her how much to pay each employee each pay period.

1

Last week, Susie attended a continuing education seminar which struck her with the force of a hurricane wind. She learned details of the new overtime rules. A presenter also said the Department of Labor (DOL) had stepped up enforcement actions against small employers. He used the phrase “low hanging fruit” so often that Susie temporarily gives up fresh fruit and vegetables.

Susie rushes home to prepare a summary of the new overtime rules and hand delivers it to Jack.  Jack thanks her and privately thinks that Susie’s becoming a nag like the old HR director and it may be time to fire her.

This morning Jack arrives at his office to find a polite young man waiting to talk to him. The stranger says he’s a DOL examiner and he wants to see time sheets, payroll records and job descriptions for Jack’s employees.

What should Jack do next?

  1. He can bluster at the DOL examiner to mind his own business.
  2. He can beg the DOL examiner to give him time to fix his many problems in hopes of lowering the penalties his company will ultimately owe.
  3. He can sneak out the back entrance, empty the corporate bank account and escape to a foreign country that has no diplomatic relations with the U.S.

In the actual situation, the employer woke up to his peril before the DOL examiner arrived on his doorstep. He had already implemented a plan to fix his HR problems which convinced the DOL examiner to show mercy when calculating the penalties.   

If your company is struggling with HR issues, Corporate Compliance Risk Advisor can help you create HR policies that are appropriate for your company’s size and then serve as a resource to your staff as the policies are implemented.

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