I’m In Over My Head.

Another update from the Jungle…
image017Cindy is the HR director for her company because she is a good listener and she can handle obnoxious people. She got the job because the owner hates conflict (and he’s one of the obnoxious people, although no one likes to mention this). Cindy listens patiently to her distressed co-workers, dispenses Kleenex and aspirin as needed, and generally puts an optimistic spin on the worst calamities.

The company is a manufacturing facility that is still fairly low tech. Most of the employees are God-fearing, gun-toting, self-described “rednecks”. They are good people but the stress of living paycheck to paycheck means there are often conflicts. As the company has grown, employee conflicts have multiplied.

Just this morning, Cindy rushed to the women’s bathroom to break up a fight between two employees. The women were fighting over the shift mechanic who has been trysting with both of them. Cindy arrived in time to see one of the women flashing a pocket knife at the other woman. The employee who pulled a knife has to go immediately. Cindy and the shift supervisor escort her off the premises. The other employee must be suspended for fighting at work.

Cindy feels overwhelmed. She has no formal training for her HR duties and she worries that she may violate employment laws due to lack of training.

What are Cindy’s options?

  1. She can continue to worry about her lack of HR training and hope for the best. After all, she’s good at putting a positive spin on dire circumstances.
  2. She can ask the owner to reimburse her costs to take HR training classes so that she has the appropriate certifications to do her job. The training will be beneficial in the long run but have no effect on her immediate concerns.
  3. She can ask the owner to hire an HR consultant to review their existing policies and practices to identify areas that need to be improved to avoid violating the law. This will fix the short term concerns she has.

The above scenario is a composite of actual situations I faced while working at several former employers. If your company is struggling with similar issues, Corporate Compliance Risk Advisor can help. Corporate Compliance Risk Advisor can 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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The ACA is DOA.

Another update from the Jungle….

April Fools!

kicking-clipart-11949865171205221945blueman_306_01.svg.medThe ACA is alive and kicking. That means employers must comply with the ACA when offering a group health plan to their employees.  Unfortunately, about 30% of employers have no idea what is required of them, according to a recent insurance industry survey. Consider Tony’s situation.

Tony runs a company with about 30 full-time employees who work in the office. His company also has 80 part-time employees who work at various jobsites as needed. Tony has never offered health coverage to the part-timers because it was not financially feasible. Besides many of his part-timers wanted cash and not health coverage while others had health coverage from another source, often a spouse’s employer’s coverage.

Tony recently woke up to the fact that he must include his part-time employees in the headcount to decide if his company is a large employer subject to the employer penalty.  A quick estimate that two part-timers equal one full-time employee means that Tony’s workforce is clearly over the 50 employee line at which the employer penalty begins to apply.

What should Tony do next?

  1. He can decide to continue his current practice of not offering coverage to the part-timers. He may calculate that any penalty he owes for not offering them coverage is less than the cost of covering them in the group health plan.
  2. He can decide to offer coverage to his part-timers. If they reject his company’s group health plan, he will not owe the employer penalty.
  3. Before he chooses either of the above options, he can talk to a consultant who can explain the steps his company needs to take to comply with the ACA. Armed with this information, he can make a business decision on what is financially best for his company.

The above scenario is a composite of actual situations faced by clients. In those situations, the clients chose to offer health coverage to their part-timers because it was financially feasible and it boosted employee morale (after employees learned there is an individual penalty for not having health insurance). If you’re confused by the ACA, Corporate Compliance Risk Advisor can help your company understand its obligations and make informed decisions on ACA compliance.

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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.

image001

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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In Lieu of a Pay Raise, I’ll Take What I Want.

Another update from the HR jungle…. 
image025Howard works for a small manufacturer that makes steel-toed work boots and fancy stitch cowboy boots. He’s been with the company about six years and worked his way up to the lowest rung of management. That’s where his career stalled.

Howard is convinced that his advancement is stalled because he’s not family. The husband and wife owners use the company to ensure that assorted children and relatives will never be a burden on the unemployment insurance fund for the state. Howard knows this because over the years he’s trained most of the family idiots only to see them get pay raises and promotions ahead of him.

Howard threatened to quit a couple of times, but the owners begged him to stay and made promises that they haven’t kept. So Howard has decided to get even. A couple of times a week he helps himself to some of the leather which he uses in his side business making customized knife and gun holsters. The supply closet has helped him set up his home office and he sometimes uses the office postage machine to cover his mailing expenses.

Lately the owners have complained about rising costs but Howard’s not really worried about being caught. He knows he’s not the only one raiding company property. Besides, the owners treat the business like their personal piggy bank.

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

  1. They could create an inventory of company property and periodically update the inventory through audits.
  2. The owners could initiate internal controls such as requiring authorizations to take leather from the store room or supplies from the supply room.
  3. They could reconsider some of their employment practices which are causing employee dissatisfaction.

These owners are learning a hard lesson about employee relations. The second most common motivation for employee theft is revenge. Employees who believe their contributions are ignored or undervalued can wreak havoc before they finally leave for the last time.

Need help 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 when the policies are implemented.

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An Inside Job.

image023Pete owns a small plumbing contractor’s business. He has a lot of equipment, such as backhoes and tools, and a truck to pull the trailer that hauls his equipment to a job site. He also has giant rolls of copper tubing which require a tow motor to move around the shop.

Years ago Pete invested in a security fence topped with razor wire which took care of casual thieves who prefer the after-hours self-service plan for furnishing their home or business. Last year he installed security cameras inside and outside his warehouse after a neighboring business was robbed. He also has a security alarm system for the building.

Today when Pete arrived, he found the front gates wide open. The warehouse door had a giant hole where the thieves used an acetylene torch to cut a hole so that they could abscond with the copper tubing.

Pete knows that one or more of his employees must be involved because the theft has all the hallmarks of an inside job. The security alarm wasn’t triggered and the cameras were turned off. The thieves took only the copper tubing which is readily convertible into cash and hard to trace.

What could Pete have done to avoid this employee theft?

  1. The sad truth is that Pete did everything he could to avoid becoming a victim of employee theft, including installing cameras and an alarm system.
  2. Pete could begin doing background checks on employees in hopes of weeding out potential future problems.
  3. Pete could protect his business from the losses caused by employee theft through insurance coverage, such as a fidelity bond or employee (dis)honesty coverage.

Pete has just discovered the most common of the five motivations for employee dishonesty, which is greed. Greedy employees are inherently dishonest and generally have no remorse for their actions, unless it’s regret at getting caught.

Need help 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 when the policies are implemented.

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I Was Going to Pay It Back….Honest!

Another update from the HR jungle….

image021Sam leads the IT department for his company and is the head of their internal security team.  As part of his duties, Sam has administrative rights to all electronic and computer-based systems at the company.  He ensures that new employees are issued security clearances to use the company computers. He sets the dollar limits on company-provided credit cards as authorized by the owners of the company.

But Sam has a problem. He likes to gamble. It started years ago quite innocently when he participated in a sports betting pool with co-workers at a former employer’s office. Then he started spending his weekends at casinos. Sam began using his company credit card to get cash advances at the ATM in the casino.

At first, he paid off the credit card balance each month and no one discovered what he was doing. When he couldn’t pay the credit card balance, he raised the credit limit on the card using his administrative rights as the head of internal security.

Sam’s basically a decent guy and the stress of his situation has finally gotten to him. This morning he walked into the owner’s office and confessed all. As he sat sobbing and promising to reimburse the company, the owner stared at him, stupefied with shock.

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

  1. The owner could have regularly reviewed all company expenses, including credit card charges, to ensure they were used only for valid company business.
  2. The owner could have required regular reports from Sam’s department showing the authorized limits on all company credit cards.
  3. The owner could have hired an outside auditor to do an annual audit of the company’s financial records in the hopes that the fraud would have been uncovered.

Employee theft arises from five basic motivations, including a gambling habit. Another closely related motivation is a drug or alcohol habit. Employees experiencing any of these addictions may decide to steal an employer’s property in order to feed their habit.

Need help 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 when the policies are implemented.

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The End is Near…for 2015 Open Enrollment.

Another update from the HR jungle….
image017Walter owns a restaurant and catering business with 25 employees, most of them part-time. The hours can be brutal and the pay is low. Walter wishes he could pay more but in the competitive market he faces that’s not an option.

He can’t afford a group health plan for even his handful of full-time employees. Instead, he has encouraged his employees to sign up for coverage through the Exchange, also called the Marketplace. He thought some of his employees would qualify for a subsidy to help pay their premiums. Last year many of the employees decided not to buy individual health policies for a variety of reasons, including needing the money to pay bills. Now these employees will be assessed the penalty because they also didn’t try to qualify for an individual exemption.

Walter knows that he has no legal obligation to help his employees with health insurance. But he wants to help his employees because it’s the right thing to do. Walter is thinking about how to make one last effort to encourage his employees to sign up for coverage before open enrollment closes on February 15th.

What options are available to Walter?

  1. Walter can remind his employees that open enrollment closes in about 2 weeks. He can encourage them to go on-line to healthcare.gov or see an insurance agent.
  2. Walter can invite a health insurance agent to his restaurant to meet with his employees before or after their work shifts to sign up for coverage.
  3. Walter can remind his employees that they may be able to qualify for an exemption from the penalty, such as a hardship exemption due to low income.

Need help 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 when the policies are implemented.

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