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February 2010 A snapshot into the current issues affecting your people

Pay More Overtime

You must be crazy, pay more overtime? Yes! Most businesses have a position or positions that they incorrectly classify as exempt from receiving overtime. Simply put, the Fair Labor Standards Act (FLSA) defines non-exempt employees as those who are entitled to overtime and exempt employees as those who are not eligible. If you dont think this applies to you or your business, here are a few examples of employees that may change your mind. What would be the classification for:

The person you call office manager who has no direct reports and does mostly administrative work? The field supervisor who oversees a crew but also works alongside her crew? Computer techs at a company?

A business might consider these employees to be exempt, only to find that the FLSA calls them non-exempt and eligible for overtime pay. Determining who is exempt from overtime is a very complex process and has to be done on a job-by-job basis. Each job should have a job description that clearly outlines job duties, responsibilities, skills and professional requirements.
Please see Overtime, page 2

As the Economy Turns: Keeping Your Best Employees

Inside This Issue
Pay More Overtime As the Economy Turns: Keeping Your Best Employees Audit Me, Please! At the Water Cooler: Is Up In The Air Fair? Yup, They Said It Perfect People Solutions Part One While daytime soap operas are slowly dying, the economy is showing signs of recovery. This is making many employers worry that after the economy turns and companies begin hiring again, their best employees will shop their services to the highest bidders. That worry is a real one. If you take a look at the downturn following 9/11, different sources cite a 30 to 40 percent increase in turnover mostly due to employees leaving as free agents. The simple conclusion was that these employees left because of higher salaries and better benefits. Exit interviews, however, and other satisfaction surveys indicated that the reasons why employees left went back to the basics: How did my boss treat me? Was my work valued? And Is the company still a good place to work? The real tragedy occurring during the present recession is that while businesses have been busy laying-off employees, freezing salaries and cutting expenses, they have lost contact with their best and brightest.
Please see Best Employees, page 2

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The information from the job description is what is used to test against the FLSA to determine whether the job is exempt or non-exempt. Remember, it is not the person but the job that determines overtime eligibility. Incorrectly classifying a job position as exempt usually happens when a company wants to give a valuable employee a promotion: The employee is given a raise is no longer consider an hourly employee but a salaried employee. While exempt status is considered to be a badge of honor and is hard to take away once given, it can turn into an even bigger problem down the road if the employees position should have been classified as non-exempt. If a company is caught with exempt employees who should be overtime eligible, the company must pay fines and projected back pay with interest. Although it may seem unlikely that a jobs exempt or non-exempt classification would surface, it can easily become known. Say, for example, a person you fire hires an attorney who figures out that the fired employee should have been overtime eligible. Or this same fired employee files an EEO or unfair labor practices claim. The labor board then conducts an audit as a result and any improperly classified employees would receive back pay even if they didnt ask for it. The back pay can go back up to three years, resulting in a substantial amount for an employer to pay. How should you fix this right now? Conduct a proper analysis of job descriptions versus the FLSA. Some employees will be exempt because of salary. Others will be exempt because of managing at least two employees more than 80 percent of the time. Another group of employees will be classified as exempt because their roles require a specific degree. Most employees are non-exempt. If you are the least bit unsure as to a job position's classification, seek professional help. It is better to pay your employees overtime now than to pay fines and back pay in the future.

Best Employees
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If you want to make sure your best stay with you, it may not be too late. There are several steps that you can take right now to increase your chance of keeping the ones you need as business gets better. Step One: The first step is a simple one: Tell them how important they are to you and your company. Some people may guess at how valued they are at work, especially in the present culture of layoffs and downsizing. But just because you have kept an employee on doesn't mean he doesn't need to hear positive feedback on the job he is doing. Hearing this feedback will also calm any anxiety an employee has that he is only one round of layoffs away from being out of a job. A big key is to reduce an employee's stress about the job and his security. Step Two: The next step is to give your best employees a bit more information about the direction in which the company is going, rather than giving them the standard company line. This insider information makes them feel like a part of the companys in crowd. The information you give them needs to be positive and show that the company has a long-term strategy is in place. One of the first reasons interviewing candidates give to potential new employers is that they are looking for stability in the new company. People will move for the same or slightly lower salary in search of stability. Next month we will discuss steps three through five on how you can keep your best employees.

Audit Me, Please!

Last month we promised that we would take at look at conducting an annual human resources audit. This audit would focus on compliance with state and federal laws that can trip up even the most organized businesses. Where do we begin? Time Keeping: Are you keeping good records of employees work hours? Do you have them sign either weekly work sheets or their time cards? Make sure that all overtime is clearly documented and paid according to the state in which you are located. Poor records in this area can result in unpaid wages claims. Remember, no one ever works off the clock! I-9s: The I-9 is the most frequent problem for employers resulting in fines between $100 and $1,000 per occurrence. Sometimes a new hire will start working without the right documentation for completing the I-9. While you have 72 hours from the time the employee starts working to complete the document, the best policy is No docs = No work, thereby avoiding this potential problem altogether. Personnel Folders: Anything on performance you put in this file is discoverable in a court case or administrative proceeding. So if you dont want someone else to see it, dont put it in here. (By the way, disposing of the evidence after a case is filed is a bigger problem.) Employees have a right to view what is in their file usually by submitting a request in writing. All doctors notes and health related materials should be kept in a separate file. We recommend having a policy that calls for all performance and behavior materials to be cleaned out every year to prevent confusion and problems. (See Whats in Your File Cabinet? For the People, January 2010) These three areas are just the tip of the iceberg when dealing with compliance and human resources issues. Usually companies that conduct a thorough examination and bring everything up to standard can keep things compliant going forward. Businesses that conduct regular checks are much less likely to run into fines. Even if everything is not perfect, regulatory agencies are much more forgiving of organizations that are making a genuine effort to comply. With this information at hand, youll be begging for your audit, soon. OK, not really. But youll be ready.

At the Water Cooler: Is Up in the Air Fair?

George Clooneys much anticipated movie, Up in the Air debuted in December 2009 and so far has earned $73M at the box office. It is about a corporate downsizing expert who is hired by company executives to stand in for them and perform company layoffs. Some in the human resources discipline consider it to be an unfair characterization of the role an outsourced HR solution can provide. However, using the skills of someone outside your business can be both beneficial and necessary. If a company recognizes that layoffs and terminations are not something that it does well or does not have the resources on staff to do it, the company should get outside help. In these days of lawsuits on demand, terminations must be handled by the book to minimize liability. The way termination meetings were portrayed in the movie does not mirror the proper way terminations should be conducted. Terminations must be done with amazing sensitivity for the individual and not with the canned approach that Clooney's and Anna Kendrick's characters displayed. One goal when participating in this difficult situation should be to end the conversation by shaking hands. You cant do that unless you have connected with the other person on a personal level. As keeping up with all the rules and regulations becomes more difficult, the likelihood of needing and wanting outside help is growing. Make sure any outside providers you use understand your company culture and approach and can model this while working with you.

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Perfect People Solutions (PPS) is a cutting-edge consulting company that is focused on providing new and creative people solutions to all kinds of businesses. At PPS we are attentive to each individual client, their business, their culture and creating an answer that is unique to them. We have a stable of consultants with years of business and human resources experience. They cover everything from recruiting to immigration; training to terminations; coaching to counseling; government regulations to organizational design and development. We can be your HR team or we can provide support to the team you have in place. The individual services we offer are rivaled only by the many different ways we can be available to support your business: Hourly Do you have a question concerning a people issue but dont want to pay the high fees a lawyer or large consulting firm charges? We offer our expertise on an hourly basis, substantially below what an attorney or large HR firm would charge. This service is primarily used to address a small issue or to deal with questions that require a detailed answer. Projects We are engaged by a company to solve a particular problem or to deliver a finished product over a period of time or by a specific deadline. Packages PPS offers unique packages to its clients. Our Perfect People Protection Packages are broken down into three types: Primary, Preferred and Premium. These packages include a set number of monthly consulting hours and other benefits to encourage our customers to take advantage of the cost savings versus paying hourly rates. Please contact us for more details on this best-in-class solution. We hope you found this edition of For The People helpful and check out our website to see what else we can offer you and your business ( We stand ready to assist you with any of the issues addressed in this edition or on any other topic that is affecting your people.

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Yup, They Said It

During a performance appraisal meeting, a middle school principal was talking with the superintendent. The superintendent asked her if she had any problems at the school. The principal told the superintendent that a number of girls were beginning to use lipstick and would put it on while in the bathroom. That by itself was not a problem, but after putting on their lipstick, the girls would press their lips to the mirror, leaving dozens of lip prints on the glass. The principal decided that something had to be done. She called all the girls to the bathroom and met them there with the schools custodian. The principal explained to the girls that the lip prints were causing a major problem for the custodian who had to clean the mirrors every night. To demonstrate how difficult it was to clean the mirrors, she asked the custodian to clean one of the mirrors. The custodian took out a long-handled squeegee, dipped it into the toilet and proceeded to clean the mirror. Since then, there have been no more lip prints on the mirror.