EEOC and Pepsi Beverages

EEOC Update:

In August of 2011 The Pepsi Bottling Group, Inc. agreed to pay $120,000 to settle a disability lawsuit filed by the EEOC. According to the lawsuit, Pepsi terminated Eldridge Davis, a driver at its Hayward, CA facility, for "job abandonment and violation of the company attendance policy." Sounded straightforward. Right? Wrong! Davis had followed proper procedure to inform his supervisor and the company that he could not finish his route due to his disability and he needed to take medical leave. Davis, who was 48 at the time, had been with Pepsi since October 1996. Well, Pepsi settled and agreed to implement preventative measures.

Fast forward to January 11, 2012.

Pepsi Beverages (formerly known as Pepsi Bottling Group) has agreed to pay $3.13 million and provide job offers and training to resolve a charge of race discrimination filed in the Minneapolis Area Office of the EEOC.

The EEOC's investigation revealed that more than 300 African Americans were adversely affected when Pepsi applied a criminal background check policy. Such policy disproportionately excluded black applicants from permanent employment. Under this new policy, job applicants who had been "arrested pending prosecution" were not hired for a permanent job even if they had never been convicted of any offense.

“When employers contemplate instituting a background check policy, the EEOC recommends that they take into consideration the nature and gravity of the offense, the time that has passed since the conviction and/or completion of the sentence, and the nature of the job sought in order to be sure that the exclusion is important for the particular position. Such exclusions can create an adverse impact based on race in violation of Title VII,” said Julie Schmid, Acting Director of the EEOC’s Minneapolis Area Office. “We hope that employers with unnecessarily broad criminal background check policies take note of this agreement and reassess their policies to ensure compliance with Title VII."

Pay Compression and Senior Employees

As a follow up to my earlier blog on pay compression, let’s talk about its impact on longer-tenured employees.

One major challenge that many organizations face is attracting new, desired talent. We all know that compensation for new hires is determined by the external job market. Pay compression occurs when new employees entering the organization are paid at similar or higher levels to existing employees. Because current employees have their wages set by an “internal” job market, typically their salaries are not keeping pace with the “external” market.

As new employees are bought in, the question arises: Why aren’t we increasing the compensation of the older employees in line with those of the new employees? The older employees are quite often tasked with providing on-the-job training/mentoring of the new employees. Is a workplace conducive to the spirit of teamwork and harmony when the new employees are taking home more than the old?

Of concern are those employees whose salaries are significantly below the external job market wages (for their skills and experience), and who may begin to seek other job alternatives outside the organization. Sometimes a market starting salary increases so much that the existing employee is punished by not moving. The question then becomes “to get a good raise, do I need to quit?” Employees will be more likely to see opportunities for increasing their salaries outside their present organization.

As an employer, a possible solution is to adjust your “internal job market” salaries based solely on job values and performance (and always ensure that you audit for non-discrimination). Change your terminology from “merit increases” to “adjustments.” If the pay compression is simply one of timing due to changes within the organization, communicate with the employee! Let the employee know that the inequity is only temporary and will disappear shortly.

While we won’t be able to win them all, we may be able to reduce the damage if we take the proper steps.

Pay Compression

Pay compression occurs when you have small differences in pay regarding experience, skills, level or seniority. Most often employers are unaware that pay compression exists until a problem arises.

Some examples of pay compression are:

- Newly hired “green employees” are paid more than existing employee in same position;
- A subordinate is paid more than or equal to his/her boss;
- The salary of an employee in a lower graded job is paid more than employee in higher.

Employees are concerned with how their compensation levels relate to that received by others in an organization. And further, that their pay is a reflection of their performance and abilities. If an employee believes this his/her contribution to an organization is undervalued, this can lead to emotional issues such as resentment, depression or disengagement. Another factor to consider is a subordinate earning more than his/her supervisor may not respect their supervisor if s/he is aware of the salary compression.

While there are other issues such as tenure-based pay, general increases, etc., that create pay compression, oftentimes pay compression is the result of a poorly maintained salary structure. Is there a solution? Yes. Establish a salary structure. Ensure it is updated regularly and use it as a guide when setting compensation levels. Take steps to benchmark your salaries regularly to keep pace with market rates. If your salary program is not in sync with your market, my bet is that your employee salary levels are as well.

In closing, a word of caution. There are potential legal issues associated with pay compression. These may arise when a protected class is at the wrong end of a pay compression issue.

Do You Bully Your HR?

In late 2011 a workplace survey was conducted by the Kentucky chapter of SHRM (Society for Human Resource Management). The results of this survey indicated that some HR professionals (31.4% of the respondents) have been "bullied" simply because they worked in HR!


Here's some results:
- 42.4% subjected to work interference or sabotage;
- 33.3% suffered verbal abuse; and,
- 24.2% experienced offensive conduct (threats, humiliation and intimidation).

The survey participants felt such conduct may be a result that HR:
- Must often tell managers "no"
- Role is misunderstood and/or not appreciated
- Is perceived as lacking business acumen
- May be perceived as a threat by insecure managers
- May sometimes lack professional credentials/education, or
- May be perceived as lacking "organizational fit."

Only one minute of self-pity is allowed.

EEOC Update: No Diploma Necessary

On December 2, 2011 the EEOC posted a letter on their website stating that under the ADA, an employer’s requirement that an applicant have a high school diploma must be job related and consistent with business necessity.

What?

The letter states: “ . . . . if an employer adopts a high school diploma requirement for a job, and that requirement “screens out” an individual who is unable to graduate because of a learning disability that meets the ADA’s definition of “disability,” the employer may not apply the standard unless it can demonstrate that the diploma requirement is job related and consistent with business necessity. The employer will not be able to make this showing, for example, if the functions in question can easily be performed by someone who does not have a diploma.

Even if the diploma requirement is job related and consistent with business necessity, the employer may still have to determine whether a particular applicant whose learning disability prevents him from meeting it can perform the essential functions of the job, with or without a reasonable accommodation. It may do so, for example, by considering relevant work history and/or by allowing the applicant to demonstrate an ability to do the job’s essential functions during the application process. If the individual can perform the job’s essential functions, with or without a reasonable accommodation, despite the inability to meet the standard, the employer may not use the high school diploma requirement to exclude the applicant. However, the employer is not required to prefer the applicant with a learning disability over other applicants who are better qualified.

We hope this information is helpful. This letter is an informal discussion of the issues you raised and should not be considered an official opinion of the EEOC.”

The concept here is that the students inability to graduate from high school may be a symptom of a learning disability. Let’s be realistic. Isn’t this an insult to individuals with true learning disabilities? Are we sending a message that you don’t have to stay in school to get a job? That a high school dropout has an entitlement to my job, or your job?

As an employer, do you feel that than increase in EEOC claims against employers will occur? Will there be unfortunate repercussions? Even though the letter does not constitute an official opinion, it raises some concerns for me. A long standard criteria for screening many employees is the high school diploma. Can I say “high school diploma preferred?” Please?

For students, where is the incentive to go to school? To get a higher education? Will this create an educational backlash by creating a diminished incentive for some high school students to finish school?

A comment I read “So if we carry this to its logical conclusion, hospitals will have no right to require doctors to be board-certified or have graduated from an accredited med school.” Hey, I didn’t have the grades to make it to medical school. I didn’t have the mental “capability.” I always wanted to play doctor!

To read the full letter, here’s the link:
http://www.eeoc.gov/eeoc/foia/letters/2011/ada_qualification_standards.html

Terminations and Employee Dignity

Terminations are a minefield, emotionally and legally. Unfortunately they are a necessary task. But whether you are downsizing or terminating an employee due to poor performance, as an employer your terminations should be conducted in a professional manner. So, I have a few pointers for you to consider that may make the process a bit easier on everyone.

Timing? At one time I worked with an organization whose policy it was to never terminate an employee from the first of November through the end of the year. This holiday avoidance "practice" was one of the most employee friendly policies I had ever seen. And, it's a practice that I encourage all employers to use. We all know that the holidays are extremely stressful for any person. Compound the stress of the holidays with the emotional impact of losing a job and it can be devastating to the employee. (The loss of a job has an equal and similar impact on an employee's emotion as a death or divorce.)

While there is no good day for a termination, I recommend that you never terminate an employee on a Friday. I always recommend a Monday or Tuesday. Terminating an employee early in the week allows the employee to be proactive in terms of filing for unemployment benefits and looking for another job. Encourage the employee to begin their search early, additionally help them by providing the instructions necessary to file for unemployment benefits (if eligible).

Why not terminate on a Friday? The former employee is just sitting there doing nothing but thinking about how you fired them! Do you want that employee building hostility towards you over the weekend?

How? Well, never by telephone, text or email. There is no law addressing exactly how an employee should be terminated and there are pros and cons to every situation. And sometimes the manager has no choice but to terminate an employee by phone (such as employees that have abandoned their job, remote employees, or those situations of gross misbehavior, etc.).

I believe that terminations should be face to face. Show the employee respect and they’ll have respect for the company in return. Remember, terminated employees talk among their family and friends. Handling the employee with respect may lead the employee to recommending your organization as a good place to work. Consider the employee a potential goodwill ambassador. Another point to consider is the attitude of your remaining employees. If you terminate an employee in a professional and respectful manner, the remaining employees will be assured that they will receive the same treatment. And, they'll respect you for it!

Be prepared for emotions, don’t try to remove them from the process. Stand in the employees' shoes for a moment and understand his/her range of emotions. Terminations are a sad chapter in anyones life. *I once observed an HR Generalist who during a termination process, broke down into tears. She was handling the termination! While I always have a box of tissues handy in HR for employees (for any reason), having to hand one to the HR Generalist and her lack of professionalism left me close to speechless. Please don't do this!* If you have an EAP (Employee Assistance Program), ensure you provide the contact information to the employee. As a manager, I doubt that you are trained in counseling. My recommendation is that you show concern, but recognize your professional and personal limitations.

Ensure the employee's privacy during a termination. I recommend holding terminations in a conference room or other area away from prying eyes. In addition to providing a level of privacy during the termination, the area may allow the employee a “decompression period" after the termination. The individual may need some time to compose him/herself prior to leaving the room.

Allow the terminated employee some control over how they leave and allow them to leave with dignity. Timing, again is everything. Consider how/if the employee is to be escorted from the building. Can the employee say goodbye to his/her co-workers? Does the employee need to pack up their desk? Did the employee car-pool? As an employer try to make the process as painless and seamless as possible.

In closing, I have to throw the following quote in: “Firing employees is the riskiest thing you can do at work with your clothes on,” says Jay Shepherd, author of Firing at Will, A Managers Guide. Read his book – there’s some good advice in there!

EEOC / DOL

In a prior post I discussed the increase in EEOC cases and recent settlements. It is quite apparent that EEOC is taking a more aggressive posture with cases. One such step is the mandatory public press release regarding settlements. We’ve recently seen that with the publicity surrounding cases such as Texas Roadhouse and Bass Pro. If you go to the EEOC website, the settlement for these two cases is prominently displayed on the EEOC home page ("Texas Roadhouse Litigation" and "Bass Pro Litigation").

During my participation in a webinar recently for an Employment Law Update, some interesting questions were put to the participants. Below are the two that I feel are most significant.

Has your organization seen an increase in employee lawsuit claims this year? The response was 42% Yes, 30% No and 28% Unknown.

Do you consider Wage & Hour to be the number one employment law risk facing your organization this year? 48% Yes, 52% No.

As employers we are going to see heightened enforcement by the DOL in FY 2012. DOL has requested a budget of $240 million for the wage and hour division in 2012. That is an increase of $13.3M and 95 investigators over 2010 and 2011 levels. Two interesting items from the DOL FY 2012 Budget in Brief:

1. To ensure equal opportunity for people who work for organizations that have federal contracts, the Office of Federal Contract Compliance Programs (OFCCP) will ensure compliance with affirmative action requirements, target systemic discrimination, and prioritize the elimination of discrimination against veterans and individuals with disabilities.

2. In FY 2012, the Department will redouble its efforts to combat worker misclassification by investing $46 million for a multi-agency initiative of OFFCP, the Wage and Hour Division, OSHA, the Office of the Solicitor, and the Employment and Training Administration, which will fund state grants that address worker misclassification within the context of the unemployment insurance program.This initiative will help level the playing field for employers who abide by the law and provide employees with their rightful pay and benefits.

Misclassification of employees continues to be a hotbed of litigation and the 2012 legal changes reflected in federal law will continue to fuel concerns with employers. Keep your eyes on legislation introduced into the U.S. Senate in November. This legislation could update FLSA treatment of computer employee exemptions (see Section 13(a)(17) of the FLSA).

Looking for more information on the Wage and Hour 2012 budget? Go here:
http://www.dol.gov/dol/budget/2012/PDF/CBJ-2012-V2-03.pdf

Telework/Remote Employees - Undressed for Success

During an interview recently I had a candidate propose working remotely from another state. As we discussed remote employment, the candidate mentioned that he had done some research on remote employment statistics. His findings? Remote employees were often more productive that in-house employees. *hum?* Before I weigh in on that statement let’s talk about telework and remote employees.

According to the 2011 SHRM employee benefits report, "63% of organizations offered some form of telecommuting: 45% of respondents reported that their organizations offered telecommuting on an ad-hoc basis, 34% on a part-time basis and 20% on a full-time basis.”

Statistics from “The State of Telework in the U.S.,” June 2011, by Kate Lister & Tom Harnish indicated that regular telecommuting grew by 61% between 2005 and 2009. While current statistics aren’t available for 2010, I’m reasonably sure that there has been continued growth. Some additional findings from this report:

• Seventy-six percent of telecommuters work for private sector companies, down from 81% in 2005 – the difference is largely attributable to increase WAH among state and federal workers.
• Over 75% of employees who work from home earn over $65,000 per year, putting them in the upper 80 percentile relative to all employees.
• Using the home as a reasonable accommodation per the Americans with Disabilities Act, 316,000 people regularly work from home.

For the organization or the manager, the key to success is being able to communicate effectively and efficiently with remote employees. Companies need to find effective ways to manage internal communications and to provide the remote employees with opportunities to become more visible. Email is going to become the primary means of communication between the employee and the manager. There must be constant and clear communication. While communication occurs via various technologies daily, I recommend that you have the employee travel to the office every couple of weeks or so. One obstacle with remote employees is their ability to build strong relationships with their team members. The employee will need to have an opportunity to reconnect with his/her team members.

An employee of the U.K.-based outfit called Pearn Kandola, Psychologist Stuart Duff and his researcher colleagues found that “it's the employees who chase socialization who thrive in the land of virtual work. The office gabbers. Those who are life of the break-room party. Left on their own, these types of workers are the ones who work closely with clients, chum around with colleagues, and talk it up with bosses. They stay connected no matter where they are. It comes naturally to them.”

So, I’m hearing that it’s the pro-active, go gettem employees that are successful in a remote status. If you have an employee that requires constant supervision, prodding, etc., their chances of success may be a bit less. Okay, I weighed in.

Yes, there are disadvantages to remote work. For the employee, it may be the ability to separate work from personal life. The two seem to co-exist at all hours. For the managers, oftentimes there are uncertainties and/or fear regarding the remote employee. As a manager, you need to focus on what the employee produces rather than on their physical presence in the office. In the paper “The State of Telework in the U.S.” June 2011, Kate Lister & Tom Harnish, “the biggest barrier to telecommuting, by a wide margin, is management fear and mistrust.”

A remote workforce can be a benefit to an organization. It allows an organization to reap the benefits of having talented workforce all over the globe, creating a larger organizational presence in your industry.

Job Descriptions and the ADA

In July of 1992, the American with Disabilities Act (ADA) was born. If you are an employer with 20 or more employees, you are subject to ADA.

When an employer documents the work environment conditions in a job description, the employer takes a step toward ADA compliance. A well-developed job description should detail the “essential functions” of the job. This can be extremely helpful when an employee requests a reasonable accommodation under ADA.

Ensure that your job description of the physical requirements of the job is accurate. How much exposure to environmental conditions does the job require? How much noise exists in the typical work environment? Does the employee face exposure to blood-borne pathogens that require use of personal protective equipment?

Under the ADA regulations employers must provide "reasonable accommodation" to those individuals who qualify under ADA. Amending an essential function of the job may not be a reasonable accommodation - unless of course it can be modified. But how will you be able to make the decision about a "reasonable accommodation" if you don't have the job description with the essential functions listed?

Job Descriptions

Whether you are a small or large employer, your people need to know where they fit in the organization and what is expected of them. If an employee doesn’t understand what your expectations are, how can the employee be successful? That is where the job description comes into play. Job descriptions are written statements that define the role of the employee. It describes the duties, responsibilities, reporting relationship and qualifications for a specific job.

If you have job descriptions, remember they are living documents. Don’t just file it away in a filing cabinet. Both the supervisor and employees should refer back to the document as necessary. When an employee is currently performing in the role it is extremely important to obtain their input on the job description. Is it accurate?

On the legal front, it’s a good practice to ensure that job descriptions are current. Any organization is vulnerable to challenge under ADA, FLSA and civil rights legislation if they don’t have a job description that is accurate and current. Update the job description as the employees’ responsibilities change. When you update the job description, look at areas such as: What function has been added/deleted from the job? Is there a new hire that possesses skills that are not tracked in the old description? When a higher level of contribution, such as skill or knowledge, from the position is required; has the educational requirement, licensing, certification needs changed? If there are any changes that are required, advise HR.

During your performance appraisals, take the time to review the job description. Use the job description to set measurable performance goals based on the duties in the job description. Performance Management is an integrated approach to ensuring an employee’s performance supports and contributes to the organization’s strategic aims. Performance cannot be managed successfully via the use of outdated job descriptions (job descriptions that do not list the real, current, functions of the job).

With a job description – employees are more productive because they understand what is expected of them. When they know what is expected of them – they are able to work more efficiently.

Conducting Phone Interviews

You finished reviewing each and every one of the countless resumes you received. Now that you have developed a short list of candidates for the position what is your next step? Well, let's talk about the phone interview.

Oftentimes employers will conduct phone interviews in advance of on-site interviews. This allows the employer to assess candidates and their skills in an effort to identify those candidates an employer wishes to pursue further. *A word of advice – don’t call everyone. Phone interview only those individuals you feel are your best prospects.* Remember, a phone interview is all about gathering information on the candidate. The phone interview should be short. No more than 20 minutes. Yup, that’s it.

As an employer, I always recommend that the phone interview be pre-scheduled. Calling a candidate at the spur of the moment may catch the candidate at a bad time. Pre-scheduling will allow the candidate to ensure that s/he is in an environment in which they can give you their full and undivided attention. Allow the candidate to be prepared and in an environment that is distraction free. No barking dogs, no crying babies, no loud television. Just you, the candidate and the telephone.

When conducting phone interviews you should always have a “script” or a set of questions to use. *Review your questions frequently and ensure that they exclude any questions that are forbidden by the EEOC and that could potentially lead to job discrimination lawsuits.* Always make sure you have the candidates resume right in front of you as well as the job description (or posting).

During your phone interview, review the candidate’s background. Look at the employment history. Are there any gaps in employment? Discuss his/her role with their current employer. Why is s/he considering leaving? What dissatisfied him/her? Does the candidate’s background and experience truly match the qualifications in your job description? What is the candidate looking for in a new position?

During the interview, always take time to discuss YOUR organization and the value the position (and the right candidate) will bring into the organization.

Always clearly explain your hiring process. Briefly explain the next steps of the application process. Communicate the time frame on when the candidate will be contacted regarding his/her application status.

Conclude the phone interview by thanking the candidate for his/her time and interest.

*Remember, always document your phone interview and provide a summary of responses from the applicant.*

In-House Training

The ASTD (American Society for Training and Development) in its 2011 State of the Industry Report findings from more than 400 responding organizations across all major industries, showed that overall, organizations continue to be committed to the delivery of knowledge and the development of employees at every level. Organizations are just as committed as ever to learning and development (L&D). ASTD estimates that U.S. organizations spent $1228 per learner on employee learning and development in 2010. Nearly two-thirds of that was spent on the internal learning function, such as staff salaries and internal development costs. The remainder was allocated to external services such as workshops, vendors and external events.

New employees expect training and development. Well, actually, so do existing employees. As an owner or manager you should invest in your employees by providing continual development. The business world continues to change. We all see that. To remain competitive employees need to keep up-to-date on industry trends and to learn new technology. For the employer, this is a benefit that allows the employer to maximize employee productivity.

To be effective, training is best designed as an on-going process. And, training should always be tailored to the level of shared knowledge and practices, and actual needs, of the individuals receiving the training.

While outside training may be cost-prohibitive for the small employer, consider in-house training. Realize you may have experts among your employees! They may not know everything, but I’m sure they know enough to be an excellent resource for your training program.

A couple of tips for the effective trainer:

Be Prepared: Have an outline of your training objectives. Know the subject matter you are teaching. Rehearse your presentation. And then again, and again, and again.

Your Delivery: Stand in a central location. Speak in a clear voice. Ensure that every individual in the room hears you clearly. Have a clear view of every individual. Allow yourself to make eye contact with each individual, frequently, during the course of the training exercise. Employee involvement is key to effective employee training. If the individual isn’t involved, how can they take ownership of their learning during the process?

Be yourself: Find your training style and stick with it. With adequate preparation you will develop an effective, natural style.

Be energetic: Set the tone and climate of the workshop. Be supportive and encouraging during the training.

Be clear: Again, know the subject matter you are teaching. If you are having to explain a concept several times, then perhaps something is unclear in your material. Ask yourself: is the content delivered in an easy to understand manner? Is the employee involved in the training or is my method just another boring lecture?

Bear in mind that any training provided to employees should be knowledge that they can use right away. It’s easy to forget something if we don’t use it. "What we have to learn, we learn by doing." Aristotle.