Wage & Hour Division: Right To Know Rule

Previously DOL's Wage and Hour Division announced plans to update recordkeeping requirements that are associated with the Fair Labor Standards Act.  The DOL stated that it “proposes to update the recordkeeping regulations under the Fair Labor Standards Act in order to enhance the transparency and disclosure to workers of their status as the employer's employee or some other status, such as an independent contractor, and if an employee, how their pay is computed.”  

Identified as the "Right to Know" rule, the DOL’s original timeline for the regulation was October 2011.   In the most recent edition of the Unified Regulatory Agenda, published on January 20, 2012, the DOL moved the “Right to Know” rules into a category labeled “Long Term Actions.” The DOL defines “Long Term Actions” as those items “under development but which the agency does not expect to have a regulatory action within the 12 months after publication of this edition of the Unified Agenda.” That initially put off any action on the Right To Know until at least January 2013.

With the re-election of Obama, the "Right to Know" rules are expected to re-emerge as a major issue to workers and we can now expect the department to move forward once again on this proposal.

Under the FLSA, employees are entitled to overtime unless they're executives who manage, hire and fire employees; administrators who make key decisions; or professionals with advanced degrees, among other criteria.  (Also exempt are IT workers and sales representatives.)  Rank and file employees are commonly and wrongly classified as exempt.   These low-level employees, with limited responsibilities, are dressed up to look like managers so that employers don't have to pay for overtime.   U.S. workers are putting in more than 40 hours per week through a variety of practices including:

• Jobs misclassified as exempt;
• Smartphones and other technology allowing business to bleed into personal time; and,
• Employees working off the clock.

Acting Wage and Hour Administrator Nancy Leppink called the Right to Know rule one of the Wage and Hour Division's priorities, stating "We're continuing to work on that regulation," and that "We're learning about what the issues are" from the Department's ongoing misclassification enforcement initiative.

A record-high 7,064 FLSA suits were filed in federal court during the year-long period ending March 31st.  The WHD reported that over $225 million in back wages for FLSA violations were collected during this period.   These numbers provide reinforcement for the belief that FLSA claims will continue to gain momentum into 2013 and beyond.  

Employers know that FLSA collective actions are more prevalent than ever and they are costly to defend or resolve.  With the majority of the lawsuits pertaining to employee misclassification, it's an incentive to the employer to carefully review how employees are classified. 

 

We'll Miss The Twinkies

Talks between Hostess management and the Bakery, Confectionery, Tobacco Workers and Grain Millers Union failed on November 20th.  If a favorable agreement had been reached, over 18,000 jobs would have been saved.  It is unfortunate, but Hostess brand began terminating most of its 18,000 employees last week.  This action came after Hostess won court approval to shut down and start selling assets.

CEO Gregory Rayburn said 15,000 workers would be fired as soon as possible so that they could begin receiving unemployment benefits.  The Court ordered the Company to implement a non-executive employee retention plan to ensure the Company has the necessary personnel to implement the wind down.  Approximately 3,200 employees will stay on temporarily to clean plants and begin to wind down operations.  Employee headcount is expected to decrease by 95% within the first 16 weeks.  The closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes, and 570 bakery outlet stores could take up to three months. 

WARN Act
In May, Hostess Brands Inc. mailed out WARN Act notices to its employees.  The WARN Act requires companies to give workers sixty (60) days notice before closing a facility or performing a mass layoff.  Spokeswoman Anita-Marie Laurie stated Hostess wanted to notify employees that a "sale or wind down of the company is possible in the future." 

On November 21st a former employee, Mark Popovich, filed for damages on behalf of himself and all employees laid off by Hostess.  "We believe Hostess violated the federal WARN Act as well as state laws.  These employees deserved better," said Charles A. Ercole, who filed the Complaint for Mr. Popovich.   Failure to give sixty (60) days advance notice violates the federal Worker Adjustment and Retraining Act. 

Hostess has a different viewpoint believing that the multiple notices issued throughout 2012 and the court declaration to layoff workers are sufficient to excuse it from WARN Act liability.

There are a lot of different versions as to who is to blame for the failure of Hostess and the loss of so many jobs.  Whether mismanagement or a union failing to make concessions, there are now 18,000 people facing unemployment.  The largest number of employees impacted are based in Irving, Texas.  I'm sad to say I haven't been able to find any information relating to job fairs for the Irving employees.    Texas, let's get moving on that shall we?  The Utah Department of Workforce Services and Ogden/Weber Technology College is hosting a job fair this Thursday for former Hostess employees. 

Hostess, previously with annual sales of about $2.5 billion, had been making 500 million Twinkies annually prior to the shutdown.  We'll miss the Twinkies. . . .

A Real Thanksgiving Turkey

A parade-goer watching the Macy's Thanksgiving Day Parade on New York's Upper West Side noticed that the confetti that fell on him and some friends contained information including names, addresses, Social Security numbers, bank routing numbers, etc.    Additionally, one confetti strip appeared to provide information from an arrest record and others identified undercover detectives by name.   Upon inspection it appeared that all documents were from the Nassau County Police Department. 

"The Nassau County Police Department is very concerned about this situation," Nassau County Police Inspector Kenneth Lack said in a statement. "We will be conducting an investigation into this matter as well as reviewing our procedures for the disposing of sensitive documents."

Obviously there is more risk than ever that sensitive employee information may become pubic information.  Companies need to take the proper steps to ensure that sensitive employee information doesn't get into the wrong hands. 

And a word of advice to the Nassau County Police Department, skip the holiday drinks and buy a better shredder!

EEOC Update

The EEOC recently released it's Performance and Accountability Report for fiscal year 2012.  The report states that the EEOC recovered more than $365.4 million in monetary benefits through private sector administrative activities including mediation, conciliations, and withdrawals of benefits.  This is the highest amount recovered in any one year by the agency, $700,000 more than recovered in 2011. 

 

During the year the EEOC had 309 cases on its active docket with a total of 254 merits lawsuits resolved resulting in recovering $44.2 million through litigation.   Included were 162 cases under Title VII with the EEOC recovering $34.3 million in Title VII resolutions.   

 

The EEOC is in the early stages of implementing its Strategic Plan for Fiscal Years 2012-2016.  This four year plan will outline the agency's goals and achievement benchmarks for enforcing various anti-discrimination laws under its jurisdiction.  

Is Workplace Stress a Modern Epidemic?

Remember when 5PM meant the end of a workday?    As a result of  factors such as the economy, job insecurity, or even employer demands, employees remain tethered to work 24/7 through their iphones or Blackberrys.   Face it, we're plugged in and the technology makes us accountable for every moment of our day (just a thought, but working 24/7 shouldn't be a badge of honor).   Let's stop pretending that employees, or you, don't have lives outside of the office and consider how these nonstandard work schedules impact the modern employee and family.
 

Stress is a built-in condition and we're hardwired for it.  In the workplace, those stressors can come from multiple areas or just one.  Workload, lack of appreciation, isolation, conflict, mistrust, lack of direction or just pervasive uncertainty.   When those stressors in your life are always present, it impacts both physical and emotional health. 

Research statistics provided by Statistic Brain in April 2012 (source: American Psychological Association, American Institute of Stress) gave employers an insight into the Top Causes of Stress in the U.S.  The #1 cause of job stress in the U.S. is Job Pressure with contributing factors such as co-worker tension, bosses, and work overload.  

• 77% of the respondents indicated that they regularly experience physical symptoms caused by stress.
• 73% regularly experience psychological symptoms caused by stress.
• 48% feel their stress level has increased over the past five years.

 Additional statistics relating to the impact of stress:

• 48% of respondents say stress has a negative impact on their personal and professional life.
• 31% have difficulty managing work and family responsibilities.
• 30% say they are "always" or "often" under stress at work.

Let's talk about stress's nasty side affects.  Physical symptoms reported by respondents as a result of stress:

• 51% experienced fatigue
• 44% headache
• 34% upset stomach
• 30% muscle tension.

with reported Psychological Symptoms:

• 50% irritability or anger,
• 45% feeling nervous
• 45% lack of energy
• 35% feeling as though they could cry.

Annual costs to employers in stress related health care and missed work?  $300 Billion.

If you want to disregard all of the statistics above, the CDC released their own set of statistics regarding Prescription Anti-Anxiety Drug Use in the U.S. for the period 1988 - 2008.  Think the workforce isn't stressed?  The results by CDC reflected a steady increase in the use of prescription anti-anxiety drugs.  Use by adult women increased from 4% to 5.70% between 2002 - 2008.   Adult population use in 1994 was 2.8%, by 2008 there was an increase to 4.50%.

Let's all take a vacation!  Who's with me?

http://www.statisticbrain.com/stress-statistics/

Management and Mr. Likert

Do you ever have to go through your old emails in search of some missing piece of information?  It's akin to a trip down memory lane.  You never know what you will stumble across or where you will end up.    During a recent journey,  I rediscovered this one small email and felt it worthy of discussion.   Yes, the email is cryptic.  But the message screamed volumes to me.

Him:  Are you familiar with Likert’s management theories? 

Me:  Are we speaking of exploitative authority?

Him:  We are.  Like verbatim.

Me.  Yes sir.  (End of conversation)

There are a lot of different definitions of the word “management,” but for the sake of this blog, I’m going with a very fundamental definition. Getting things done through and with people.  

Rensis Likert, an American educator and organizational psychologist, is best known for his research on management styles.  (And let’s not forget The Likert Scale.)   Likert identified a four-fold model of management styles,  each style revolving around decision-making and the degree to which people are involved in the decision making process:

1. Exploitative Authoritative;
2. Benevolent Authoritative;
3. Consultative; and,
4. Participative.    

With that email in mind, let's explore the Exploitative Authoritative management style.  For the EA, responsibility lies in the hands of the people at the upper echelons of the hierarchy.  The supervisor has no trust or confidence in subordinates and motivation is based on threats.  Decisions are imposed on sub-ordinates and teamwork/communication is extremely limited.  Essentially the communication style is almost entirely downwards and the psychologically distant concerns of the employees are ignored. With a style of “do what I tell you,” the overall impact to an organization is extremely negative.

In short, the leader imposes decisions on subordinates and uses fear to achieve employee motivation. 

“E-A leaders are highly production-oriented, display no confidence in their subordinates, provide them no influence in decision making, seldom seek or use subordinates’ ideas, use fear, a threat, punishment and occasional rewards to enforce compliance, and engage mainly in downward communication.”  Organization & Management by R.D. Agarwal.

Let's compare the EA management style against the characteristics of an effective work group.  In an effective work group there is a high degree of confidence and trust in each other.  The values and goals of the group all link in harmony with each other and there is strong motivation by each member to communicate fully and frankly.  An important factor is that employees feel secure in making decisions.  That is 100% at odds with the EA management style.

The “difference between a leader and a manager is that a manager pushes while a leader pulls.  By this, we mean that a manager uses its authoritative powers to push people to reach the set targets and pressurize them to achieve the firm’s goal.  He orders actually.  While a leader pulls, that is, it motivates people and develops zeal in them towards achieving a goal. . . “    The Role and Effectiveness of Leadership in Team-Working: Abstract.

In closing, I ask the following question:  If your employees had the chance, would they "vote" you out of your position?

Creating a Feedback Culture

Feedback is a communication process between two individuals. It emphasizes the flow of dialog and creates clarity and understanding. For an organization to grow and it's employees to learn, employees must have feedback. Without it, they don't know how they are performing, what's working and what's not, and where changes need to be made. 

"Creating a culture where employees share productive feedback can become an integral part of a growing organization's development strategy towards strategic goals." Creating a Feedback Culture. Research Report. February 2008)

 

To determine if you have a Feedback Culture, ask yourself the following:

1. Is your communication minimal?
2. Is it primarily top-down?
3. Or is it open, honest, two-way communication?

A feedback culture is one in which individuals continuously receive, solicit and use formal and informal feedback to improve their job performance.  Take a moment to read the bullets below and carefully consider your answers.

• If I asked you if I could criticize you, what would your response be?
• If I asked if I could provide you with constructive feedback, what would your response be?

Feedback must come from a place of support, not a place of critique.  To be effective it must provide specific context (behaviors), not generalizations.   It's constructive, usable and based on the impact of the subjects actions rather than generalized opinions about that person. 

 

Supportive Feedback will have three specific components.  The feedback components are designed for one person only and are tailored to that specific person's behavior.  Components are NOT interchangeable from Employee A to Employee B. 

Supportive Feedback:

1. When did the behavior occur?
2. What was observed?
3. Why does it matter? 

For Constructive Feedback, there is a fourth component, the Request.  The Request will identify what needs to change. 

 

In closing, a prerequisite for a feedback culture is a respectful stance towards each and every employee, manager, and executive.  "A corporate culture is incredibly strongly linked to a leader's personality," says Peter Bregman, a corporate culture consultant and author of Point B:  A Short Guide to Leading A Big Change.   To create a feedback culture, you must start at the top and walk the talk!

Sorry, I'm Not Going To Tell You What You Want To Hear

I upset an executive the other day when I advised him that a tactic he wanted to take with an employee really wasn't the best approach.  When I explained why a different approach was needed, the response from the executive was anything but supportive. 

 

To quote Dilbert, "Do you want a realistic. .. that will ruin your day, or a lie that will allow your ignorance and your happiness to lock arms and square dance to the next cubicle?"

 

It's human psychology. Most times we hear what we want to hear. We want things to align with our vision of how the world works. However, Mr. Executive, if someone is brave enough to give you honest input, take a moment to recognize it. Don't shoot (or shun) the messenger.   Don't just turn to confidants who will tell you what you want to hear. My recommendation is that you turn to several sources for information and obtain several points of data.

 

For just a moment please understand that HR isn't here to offend you.  We all know that in the business world, unintentional violations do not excuse wrongful behavior.   No, I'm not here to provide you with legal advice. But, I am here to advise you where you may face potential liability.  So,  I'll question tactics, suggestions or orders that may appear to be unlawful.   I will ask questions and seek clarification.  I will then tell you what works best based on my knowledge and experience.  I'm going to follow my instincts.

  
In May, Forbes published the "10 Commandments for Delivering Bad News."  In brief (and the link has been provided) the commandments are:

1. Thou shalt always treat people with respect and dignity.
2. Thou shalt always follow up and follow through
3. Thou shalt always remember your multiple audiences
4. Thou shalt always bring solutions
5. Thou shalt always look for the silver lining
6. Thou shalt always justify
7. Thou shalt always put in writing
8. Thou shalt never hide the facts
9. Thou shalt never delay
10. Thou shalt never surprise

Any successful employee strives to anticipate the boss's needs and then deliver them.  Telling people what they don't want to hear is risky.  I can sit here, nodding, and maintain the status quo.   But that's not what you hired me to do.   I'm not going to hide the facts and I am going to provide you with solutions.

http://www.forbes.com/sites/forbesleadershipforum/2012/05/30/10-commandments-for-delivering-bad-news/

Generation Gaps: How We (Mis)Communicate

The Baby Boomer generation is starting to exit the workforce, leaving the reins of leadership to the GenXers.  Through this transition organizations are struggling to balance the work styles and communication preferences of 3  - 4 different generations.   Baby Boomer or member of Generation X, through formal writing or an IM, we all need to communicate with each other.   This is where our real generation gap exists.

In my blog entry, Rudeness at Work, stats reflected that younger employees, by an increase of 28% over older workers, contributed to incivility in the workplace.  Question:  Does this present a framework for identifying age-related differences in work attitudes and behaviors?   Answer:  Yes.  In September of this year CareerBuilder surveyed 3,892 U.S. workers and 2,298 U.S. hiring managers ages 18 and over. The results of this survey, Generational Differences in Work Styles, Communication and Changing Jobs, highlighted the contrasts of the generational trends on how each generation approaches work.  It appears as though this isn’t intentional incivility, it's the result of the generation you grew up in and the differences in generational communication styles.   

CareerBuilder Survey Question:  How Do You Like To Communicate at Work?
 

Face to Face

• 60% (Ages 55+) 
• 55% (Ages 25 - 34)

Email/Text

• 28% (Ages 55+)
• 35% (Ages 25-34)

Phone

• 12% (Ages 55+)
• 10% (Ages 25 - 34)

Baby Boomers, born between 1946 and 1964, are the largest generation born in America to date. The offspring of the Silent Generation, the Boomers experienced* the Vietnam War, the Civil Rights Movement, and the assassinations.   The "We Generation" who were defined by the Cold War and the Space Race. The Boomers recognize the value of relationship building, preferring personal, face to face communication over communicating through technology. Technology is a means of communication, not an exclusive tool to communicate.   Here's where the generation gap comes into play.  The GenX and GenY prefer to use digital communication almost exclusively.

GenXers, born between 1965 and 1980, are defined by Watergate, an era of political corruption, economic inflation, single-parent homes, MTV, the fall of the Berlin Wall, and the Challenger tragedy.  GenXers often prefer direct and straightforward communication.  And as a result, they may appear abrupt.    While the gap between Gen X and Gen Y is much larger due to the rate of technology growth, GenXers are highly techno-literate and don't worry about being outpaced by younger colleagues.   

GenY, born between 1980 - 1999, are "The Millennials,"  the generation of Facebook and MySpace.  Labeled as digital natives, the high-tech environment has shaped their values.  They are defined by computers, TV talk shows and the Oklahoma City bombing.   (The Department of Labor statistics estimate that GenY will compromise more than 40% of the workforce by 2020. Their sheer numbers will transform every life stage entered.)  GenY is extremely comfortable in a wired world.

GenZ, born after 2000, is the Digital Generation.  They are plugged in to the Internet by handheld devices, remaining connected every moment of their lives.  With so much of the GenZ life centered around the digital domain, a significant percentage prefers socializing online than in real life.  Through IM, text or Mobile phones, their digital connection to the world is essential.  They have access to the World Wide Web 24/7 and information and knowledge at their fingertips.    With a vague memory of such a key event, they are the generation of 9/11 and homeland security.

As technology evolves, so do our communication options and preferences.  Communicating faster, each generation will have vast differences in their communication methods and preferences.  These preferences may create a dividing line between one generation to the next.  Every organization will need to have increased awareness of the potential miscommunication due to generational differences. It will be critical to know the generation and to connect with their preferred style.

*Generations . . .  are deeply influenced and bound together by events of their formative years.  . . . the events that occur at various critical points in the group's lifetime .. . define their core values."

Generation "dates" are approximate and vary by demographer. 

I'm Just Not In To You (As An Organization)

Remember when companies and employees exhibited mutual loyalty? Over the last two decades there has been a not–so-subtle shift away from loyalty as evidenced by the ever-weakening bonds between employees and employers.  An employee pointed out to me that if loyalty is not yet dead, it’s at least on life-support.

In a 2011 CareerBuilder.com report, 76% of full-time workers, while not actively looking for a new job, would leave their current workplace if the right opportunity came along.  Employees just aren’t that in to you.  No, the employees don’t say that out loud, but they sure are thinking it. 

And in 2012, they're acting on it.

Fast forward to the CareerBuilder October 2012 survey of 1,078 full-time workers (U.S. and Canada).  Sixty-nine percent of full-time workers reported that searching for new job opportunities is part of their regular routine.  Fifty-three percent of the workers said they feel like they just have a job, not a career. 

The new trend?  Employee loyalty has shifted to their careers. 

A company's ultimate responsibility and loyalty is to the bottom line.  When sales slip a company's first response can be headcount reduction, reduction in benefits, and/or pay freezes.  Managers may act in a way that communicates “we don’t care about you” or "we don’t respect you.”    The employee may now perceive that the organization has placed zero value on their talent.  But, employees have a choice and will shop around for a better deal.

 

 

Cronyism or Extreme Social Connections?

Normally the hiring process is a relatively random process based on the selection of applicants.  And in the recruiting process, referral hiring is a common practice.   But there are times when the selection process is not so random or neutral.   What happens when the hiring manager is not totally indifferent to members of the candidate pool and the referral value of a candidate increases based on their social connection with the hiring manager?   Is this where an organization, or manager, potentially crosses the line into favoritism? 

 

In my last blog (Nepotism - It's All Relative) I discussed nepotism and the challenges it may bring to an office environment.  Skipping down that little favoritism trail,  hand in hand with nepotism, is cronyism.   Cronyism is a specific form of favoritism referring to partiality towards friends and associates.   

 

Have you ever worked in an environment where there's a bunch of "good ole boys?"   A group of individuals that are given an undue advantage but who don't necessarily merit this treatment?   Individuals that may be in positions where they are not even qualified to do their job?  In an environment where it's not WHAT you know but WHO you know, you are experiencing cronyism.  That favoritism can be exhibited in compensation, discipline, or even positions.  

 

Does cronyism undermine business effectiveness?  Unfortunately cronyism can create an air of entitlement for those employees who were hired based on their social connection.  They may feel as though company rules do not apply to them.  Additional negative consequences are that sometimes these individuals are under-qualified to perform their jobs (potentially promoted to a level of incompetence) and even pay scales may become distorted.

 

Referencing my earlier question regarding the practice of nepotism and whether or not it's ethical, here's something for consideration:

• One of the most basic themes in ethics is fairness. Logically, cronyism (or nepotism) interferes with fairness through the undue advantage of one person who may not merit such treatment.

Both can greatly undermine the effectiveness of an organization.  So, draw your own conclusion.

 

Always keep an eye on your hiring practices.   We all know that businesses are often thick with social connections.  But don't allow your organization to become too relationship-driven that you unknowingly violate Title VII of the Civil Rights Act by discounting highly qualified applicants.

Nepotism - It's All Relative

"Nepotism is favoritism granted to relatives regardless of merit."   

 

You have to wonder in what world a business owner / executive would think that an organization is best-served in hiring relatives "regardless of merit."   

 

For an employer, there may be a perceived benefit to hiring family members.   You're helping the family member out, becoming a bit of a hero in the process, while potentially saving the costs of recruiting, training, background investigations, etc.  for a new employee.    However, there may be disasters looming right around the next corner.

 

While family members may create a readily available workforce oftentimes they are under qualified for the positions they fill.   And those employees who are bypassed in favor of family members may develop hostile feelings, feelings of resentment.  Nepotism in a business environment may create a perceived lack of fairness in the organization, a disastrous negative impact in which employees may see no career growth. 

 

What about employees who are responsible for supervising family members?  Disciplining or firing employees is difficult enough but will they be restricted in what corrective actions they may take?  Will there be repercussions in taking corrective actions?  Will it cost the employee their career?  How does an employee handle the situation when it's the bosses relative?  Whether or not the owner wishes to admit it, nepotism can be a disruption to the work environment. 

 

Can engaging in nepotism be illegal?  Ordinarily, no.  However,  if the employer hires family (or friends) to the point where there is no consideration for other sexes, age groups, etc, the employer may be unknowingly violating Title VII of the Civil Rights Act of 1964. 

Business owners - here are a couple of questions for you to ponder:

1. Is nepotism unethical?
2. Should nepotism be in the Code of Conduct?